10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to ______________

Commission File Number: 001-37537

Houlihan Lokey, Inc.
(Exact name of registrant as specified in its charter)
Delaware	95-2770395
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

10250 Constellation Blvd.

5^th Floor

Los Angeles, California 90067

(Address of principal executive offices) (Zip Code)

(310) 788-5200

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $0.001	HLI	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes    x  No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” "smaller reporting company" and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

As of February 3, 2020, the registrant had 43,887,709 shares of Class A common stock, $0.001 par value per share, and 21,678,098 shares of Class B common stock, $0.001 par value per share, outstanding.

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

		Page
	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Consolidated Balance Sheets	1
	Consolidated Statements of Comprehensive Income	2
	Consolidated Statements of Changes in Stockholders' Equity	3
	Consolidated Statements of Cash Flows	5
	Notes to Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	33
Item 4.	Controls and Procedures	34
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	36
Signatures		37

PART I. FINANCIAL INFORMATION

Item 1.    Financial Statements

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(In thousands, except share data and par value)	December 31, 2019			March 31, 2019
Assets
Cash and cash equivalents	$	276,735		$	285,746
Restricted cash	373			369
Investment securities	91,195			125,258
Accounts receivable, net of allowance for doubtful accounts of $4,854 and $4,255, respectively	62,412			70,830
Unbilled work in process, net of allowance for doubtful accounts of $716 and $1,341, respectively	67,957			71,891
Receivable from affiliates	—			8,631
Deferred income taxes	7,610			2,854
Property and equipment, net	41,556			31,034
Operating lease right-of-use asset	129,403			—
Goodwill and other intangibles, net	822,732			794,604
Other assets	38,657			34,695
Total assets	$	1,538,630		$	1,425,912
Liabilities and Stockholders' Equity
Liabilities:
Accrued salaries and bonuses	$	322,156		$	404,717
Accounts payable and accrued expenses	45,391			55,048
Deferred income	27,896			27,812
Income taxes payable	3,758			7,759
Deferred income taxes	1,686			8,058
Loans payable to former shareholders	1,602			2,047
Loan payable to non-affiliate	3,342			6,610
Operating lease liabilities	150,157			—
Other liabilities	35,949			22,532
Total liabilities	591,937			534,583
Commitments and contingencies (Note 17)
Stockholders' equity:
Class A common stock, $0.001 par value. Authorized 1,000,000,000 shares; issued and outstanding 43,569,993 and 38,200,802 shares, respectively	44			38
Class B common stock, $0.001 par value. Authorized 1,000,000,000 shares; issued and outstanding 21,998,937 and 27,197,734 shares, respectively	22			27
Additional paid-in capital	636,123			645,090
Retained earnings	339,821			276,468
Accumulated other comprehensive (loss)	(29,317		)	(30,294		)
Total stockholders' equity	946,693			891,329
Total liabilities and stockholders' equity	$	1,538,630		$	1,425,912

See accompanying Notes to Consolidated Financial Statements

1

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

	Three Months Ended December 31,						Nine Months Ended December 31,
(In thousands, except share and per share data)	2019			2018			2019			2018
Revenues	$	333,515		$	298,013		$	856,674		$	793,007
Operating expenses:
Employee compensation and benefits	213,107			187,180			551,056			501,682
Travel, meals, and entertainment	12,943			12,991			32,760			32,689
Rent	9,531			9,987			34,454			28,612
Depreciation and amortization	4,336			3,635			12,280			10,809
Information technology and communications	7,225			5,775			19,477			16,073
Professional fees	6,204			6,087			16,494			18,148
Other operating expenses	12,153			10,115			29,207			26,448
Total operating expenses	265,499			235,770			695,728			634,461
Operating income	68,016			62,243			160,946			158,546
Other (income)/expense, net	(1,039		)	(688		)	(3,787		)	(3,301		)
Income before provision for income taxes	69,055			62,931			164,733			161,847
Provision for income taxes	20,161			18,974			39,954			48,089
Net income	$	48,894		$	43,957		$	124,779		$	113,758
Other comprehensive income, net of tax:
Foreign currency translation adjustments	14,388			(2,760		)	977			(19,038		)
Comprehensive income	$	63,282		$	41,197		$	125,756		$	94,720
Attributable to Houlihan Lokey, Inc. common stockholders:
Weighted average shares of common stock outstanding:
Basic	62,014,564			61,972,027			62,199,716			62,399,221
Fully diluted	65,608,026			65,758,679			65,770,056			65,985,660
Earnings per share (Note 13)
Basic	$	0.79		$	0.71		$	2.01		$	1.82
Fully diluted	$	0.75		$	0.67		$	1.90		$	1.72

See accompanying Notes to Consolidated Financial Statements

2

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(UNAUDITED)

(In thousands, except share data)	Class A common stock				Class B common stock					Treasury Stock					Additional paid-in capital			Retained earnings			Accumulated other comprehensive loss			Total stockholders' equity
	Shares		$		Shares		$			Shares		$			$			$			$			$
Balances – September 30, 2019	41,817,614		$	42	24,079,076		$	24		(252,306	)	$	(11,219	)	$	635,362		$	311,360		$	(43,705	)	$	891,864
Shares issued	—		—		42,972		—			—		—			1,209			—			—			1,209
Stock compensation vesting (Note 14)	—		—		—		—			—		—			14,843			—			—			14,843
Class B shares sold	2,108,176		2		(2,108,176	)	(2		)	—		—			—			—			—			—
Dividends	—		—		—		—			—		—			—			(20,433		)	—			(20,433		)
Conversion of Class B to Class A shares	(7,653	)	—		7,653		—			—		—			—			—			—			—
Shares issued to non-employee directors (Note 14)	2,118		—		—		—			—		—			369			—			—			369
Other shares repurchased/retired/forfeited	(350,262	)	—		(22,588	)	—			252,306		11,219			(15,660		)	—			—			(4,441		)
Net income	—		—		—		—			—		—			—			48,894			—			48,894
Change in unrealized translation	—		—		—		—			—		—			—			—			14,388			14,388
Total comprehensive income	—		—		—		—			—		—			—			48,894			14,388			63,282
Balances – December 31, 2019	43,569,993		$	44	21,998,937		$	22		—		$	—		$	636,123		$	339,821		$	(29,317	)	$	946,693

(In thousands, except share data)	Class A common stock				Class B common stock				Treasury Stock			Additional paid-in capital			Retained earnings			Accumulated other comprehensive loss			Total stockholders' equity
	Shares		$		Shares		$		Shares	$		$			$			$			$
Balances – September 30, 2018	34,696,005		$	35	31,063,445		$	31	—	$	—	$	636,150		$	222,324		$	(30,234	)	$	828,306
Cumulative effect of the change in accounting principle related to revenue recognition from contracts with clients, net of tax	—		—		—		—		—	—		—			(1		)	—			(1		)
Shares issued	—		—		40,253		—		—	—		2,655			—			—			2,655
Stock compensation vesting (Note 14)	—		—		—		—		—	—		11,161			—			—			11,161
Class B shares sold	164,373		—		(164,373	)	—		—	—		—			—			—			—
Dividends	—		—		—		—		—	—		—			(17,690		)	—			(17,690		)
Conversion of Class B to Class A shares	18,785		—		(18,785	)	—		—	—		—			—			—			—
Shares issued to non-employee directors (Note 14)	2,358		—		—		—		—	—		—			—			—			—
Other shares repurchased/forfeited	(370,728	)	—		(8,732	)	—		—	—		(14,961		)	—			—			(14,961		)
Net income	—		—		—		—		—	—		—			43,957			—			43,957
Change in unrealized translation	—		—		—		—		—	—		—			—			(2,760		)	(2,760		)
Total comprehensive income															43,957			(2,760		)	41,197
Balances – December 31, 2018	34,510,793		$	35	30,911,808		$	31	—	$	—	$	635,005		$	248,590		$	(32,994	)	$	850,667

See accompanying Notes to Consolidated Financial Statements

3

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(UNAUDITED)

(In thousands, except share data)	Class A common stock				Class B common stock					Treasury Stock			Additional paid-in capital			Retained earnings			Accumulated other comprehensive loss			Total stockholders' equity
	Shares		$		Shares		$			Shares	$		$			$			$			$
Balances – April 1, 2019	38,200,802		$	38	27,197,734		$	27		—	$	—	$	645,090		$	276,468		$	(30,294	)	$	891,329
Shares issued	—		—		1,537,143		2			—	—		7,662			—			—			7,664
Stock compensation vesting (Note 14)	—		—		—		—			—	—		42,299			—			—			42,299
Class B shares sold	3,694,497		4		(3,694,497	)	(4		)	—	—		—			—			—			—
Dividends	—		—		—		—			—	—		—			(61,426		)	—			(61,426		)
Conversion of Class B to Class A shares	2,297,902		2		(2,297,902	)	(2		)	—	—		—			—			—			—
Shares issued to non-employee directors (Note 14)	9,145		—		—		—			—	—		369			—			—			369
Other shares repurchased/retired/forfeited	(632,353	)	—		(743,541	)	(1		)	—	—		(59,297		)	—			—			(59,298		)
Net income	—		—		—		—			—	—		—			124,779			—			124,779
Change in unrealized translation	—		—		—		—			—	—		—			—			977			977
Total comprehensive income	—		—		—		—			—	—		—			124,779			977			125,756
Balances – December 31, 2019	43,569,993		$	44	21,998,937		$	22		—	$	—	$	636,123		$	339,821		$	(29,317	)	$	946,693

(In thousands, except share data)	Class A common stock					Class B common stock					Treasury Stock					Additional paid-in capital			Retained earnings			Accumulated other comprehensive loss			Total stockholders' equity
	Shares		$			Shares		$			Shares		$			$			$			$			$
Balances – April 1, 2018	30,604,405		$	31		37,187,932		$	37		(2,000,000	)	$	(93,500	)	$	753,077		$	207,124		$	(13,956	)	$	852,813
Cumulative effect of the change in accounting principle related to revenue recognition from contracts with clients, net of tax	—		—			—		—			—		—			—			(19,681		)	—			(19,681		)
Shares issued	—		—			1,198,254		1			—		—			9,646			—			—			9,647
Stock compensation vesting (Note 14)	—		—			—		—			—		—			36,732			—			—			36,732
Class B shares sold	360,213		—			(360,213	)	—			—		—			—			—			—			—
Dividends	—		—			—		—			—		—			—			(52,611		)	—			(52,611		)
Secondary offering	3,000,000		3			(3,000,000	)	(3		)	—		—			—			—			—			—
Retired shares upon settlement of forward purchase agreement	—		—			(2,000,000	)	(2		)	2,000,000		93,500			(93,498		)	—			—			—
Conversion of Class B to Class A shares	2,020,474		2			(2,020,474	)	(2		)	—		—			—			—			—			—
Shares issued to non-employee directors (Note 14)	6,570		—			—		—			—		—			187			—			—			187
Other shares repurchased/forfeited	(1,480,869	)	(1		)	(93,691	)	—			—		—			(71,139		)	—			—			(71,140		)
Net income	—		—			—		—			—		—			—			113,758			—			113,758
Change in unrealized translation	—		—			—		—			—		—			—			—			(19,038		)	(19,038		)
Total comprehensive income	—		—			—		—			—		—			—			113,758			(19,038		)	94,720
Balances – December 31, 2018	34,510,793		$	35		30,911,808		$	31		—		$	—		$	635,005		$	248,590		$	(32,994	)	$	850,667

See accompanying Notes to Consolidated Financial Statements

4

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Nine Months Ended December 31,
(In thousands)	2019			2018
Cash flows from operating activities:
Net income	$	124,779		$	113,758
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income taxes	(9,283		)	(5,407		)
Provision for bad debts, net of recoveries	72			983
Unrealized gains on investment securities	(182		)	(16		)
Non-cash lease expense	11,469			—
Depreciation and amortization	12,280			10,809
Contingent consideration valuation	—			(708		)
Compensation expenses – restricted share grants (Note 14)	47,791			44,540
Changes in operating assets and liabilities:
Accounts receivable	9,815			27,824
Unbilled work in process	4,287			15,201
Other assets	(4,152		)	(11,284		)
Accrued salaries and bonuses	(85,018		)	(93,206		)
Accounts payable and accrued expenses and other	3,245			3,155
Deferred income	58			(6,910		)
Income taxes payable	(4,403		)	(6,676		)
Net cash provided by operating activities	110,758			92,063
Cash flows from investing activities:
Purchases of investment securities	(248,176		)	(48,946		)
Sales or maturities of investment securities	282,422			217,321
Acquisition of business, net of cash acquired	(2,197		)	(71,407		)
Receivables from affiliates	(170		)	1,705
Purchase of property and equipment, net	(16,971		)	(4,536		)
Net cash provided by investing activities	14,908			94,137
Cash flows from financing activities:
Dividends paid	(61,104		)	(50,284		)
Settlement of forward purchase contract	—			(93,500		)
Other share repurchases	(27,828		)	(69,196		)
Payments to settle employee tax obligations on share-based awards	(31,469		)	(1,947		)
Earnouts paid	—			(1,923		)
Loans payable to former shareholders redeemed	(446		)	(694		)
Repayments of loans to non-affiliates	(10,786		)	(1,535		)
Other financing activities	369			187
Net cash (used in) financing activities	(131,264		)	(218,892		)
Effects of exchange rate changes on cash, cash equivalents, and restricted cash	(3,409		)	(10,762		)
(Decrease) in cash, cash equivalents, and restricted cash	(9,007		)	(43,454		)
Cash, cash equivalents, and restricted cash – beginning of period	286,115			300,223
Cash, cash equivalents, and restricted cash – end of period	$	277,108		$	256,769
Supplemental disclosures of non-cash activities:
Shares issued via vesting of liability classified awards	$	6,453		$	4,955
Fully amortized intangibles written off	—			8,272
Cash acquired through acquisitions	$	15,755		$	16,141
Cash paid during the period:
Interest	$	657		$	706
Taxes	53,977			64,893

See accompanying Notes to Consolidated Financial Statements

5

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share data or as otherwise stated)

Note 1 — Background

Houlihan Lokey, Inc. ("Houlihan Lokey" or "HL, Inc.," also referred to as the "Company," "we," "our," or "us") is a Delaware corporation that controls the following primary subsidiaries:

• Houlihan Lokey Capital, Inc., a California corporation ("HL Capital, Inc."), is a wholly owned direct subsidiary of HL, Inc. HL Capital, Inc. is registered as a broker-dealer under Section 15(b) of the Securities Exchange Act of 1934 and a member of Financial Industry Regulatory Authority, Inc.

• Houlihan Lokey Financial Advisors, Inc., a California corporation ("HL FA, Inc."), is a wholly owned direct subsidiary of HL, Inc.

• HL Finance, LLC ("HL Finance"), a syndicated leveraged finance platform established to arrange senior secured leveraged loans for financial sponsor-backed, privately-held, and public corporate entities. HL Finance acts as an arranger on syndicated loan transactions and has entered into an agreement with an unaffiliated third party investor that may provide commitments with respect to certain syndicated loans arranged by HL Finance.

• Houlihan Lokey EMEA, LLP, a limited liability partnership registered in England ("HL EMEA, LLP"), is an indirect subsidiary of HL, Inc. HL EMEA, LLP is regulated by the Financial Conduct Authority in the United Kingdom ("U.K.").

On August 18, 2015, the Company successfully completed an initial public offering ("IPO") of its Class A common stock. Expenses related to the corporate reorganization and IPO recorded in the Consolidated Statements of Comprehensive Income include the following:

• $3,684 and $3,629 of compensation expenses associated with the amortization of restricted stock granted in connection with the IPO during the three months ended December 31, 2019 and 2018, respectively, and $10,735 and $10,500 during the nine months ended December 31, 2019 and 2018, respectively; amortization expense of restricted stock granted in connection with the IPO is being recognized over a four and one-half year vesting period; and

• $2,509 and $2,510 of compensation expenses associated with the accrual of certain deferred cash payments granted in connection with the IPO during the three months ended December 31, 2019 and 2018, respectively, and $7,534 and $7,916 during the nine months ended December 31, 2019 and 2018, respectively; accrual expense of deferred cash payments granted in connection with the IPO is being recognized over a four and one-half year vesting period.

Prior to a corporate reorganization that was consummated immediately prior to the closing of the IPO, the Company was incorporated in California as Houlihan Lokey, Inc., a California corporation ("HL CA"), and was a wholly owned indirect subsidiary of Fram Holdings, Inc., a Delaware corporation ("Fram"), which, in turn, was a majority owned subsidiary of ORIX Corporation USA (formerly ORIX USA Corporation), a Delaware corporation ("ORIX USA"), with the remaining minority interest being held by Company employees ("HL Holders"). ORIX USA and the HL Holders held their interests in HL CA indirectly through their ownership of Fram. On July 24, 2015, HL CA merged with and into HL, Inc., with HL, Inc. as the surviving entity. In connection with the IPO, the HL Holders deposited their shares of HL, Inc. Class B common stock into a voting trust (the "HL Voting Trust") and own such common stock through the HL Voting Trust.

In April 2018, the Company completed the acquisition of Quayle Munro Limited, an independent advisory firm that provides corporate finance advisory services to companies underpinned by data & analytics, content, software, and services. 

In May 2018, the Company completed the acquisition of BearTooth Advisors, an independent advisory business providing strategic advisory and placement agency services to alternative investment managers.

In June 2019, the Company exercised its option to acquire the remaining 51% of the shares of Lara (Italy Holdco) Limited ("Lara"). Lara's only operating subsidiary, Houlihan Lokey S.p.A., is an Italian-based company that provides corporate finance advisory services.

In November 2019, the Company completed the acquisition of Fidentiis Capital, an independent advisory business providing independent corporate finance advisory services relating to mergers and acquisitions, capital raising, and financing.

6

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share data or as otherwise stated)

In December 2019, the Company completed the acquisition of Freeman & Co., an independent advisory business providing mergers and acquisitions advisory, capital raising, and other investment banking advisory services for the financial services sector.

The Company offers financial services and financial advice to a broad clientele located throughout the United States of America ("U.S."), Europe, and the Middle East and Asia-Pacific regions. The Company has U.S. offices in Los Angeles, San Francisco, Chicago, New York City, Minneapolis, McLean (Virginia), Dallas, Houston, Miami, and Atlanta, as well as foreign offices in London, Paris, Frankfurt, Madrid, Amsterdam, Dubai, Sydney, Tokyo, Hong Kong, Beijing and Singapore. Together, the Company and its subsidiaries form an organization that provides financial services to meet a wide variety of client needs. The Company concentrates its efforts toward the earning of professional fees with focused services across the following three business segments:

• Corporate Finance ("CF") provides general financial advisory services in addition to advice on mergers and acquisitions and capital markets offerings. We advise public and private institutions on a wide variety of situations, including buy-side and sell-side transactions, as well as leveraged loans, private mezzanine debt, high-yield debt, initial public offerings, follow-ons, convertibles, equity private placements, private equity, and liability management transactions, and advise financial sponsors on all types of transactions. The majority of our CF revenues consists of fees paid upon the successful completion of the transaction or engagement ("Completion Fees"). A CF transaction can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to the fees paid at the time an engagement letter is signed ("Retainer Fees") and in some cases fees paid during the course of the engagement ("Progress Fees") that may have been received.

• Financial Restructuring ("FR") provides advice to debtors, creditors and other parties-in-interest in connection with recapitalization/deleveraging transactions implemented both through bankruptcy proceedings and through out-of-court exchanges, consent solicitations or other mechanisms, as well as in distressed mergers and acquisitions and capital markets activities. As part of these engagements, our FR business segment offers a wide range of advisory services to our clients, including: the structuring, negotiation, and confirmation of plans of reorganization; structuring and analysis of exchange offers; corporate viability assessment; dispute resolution and expert testimony; and procuring debtor-in-possession financing. Although atypical, FR transactions can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to the Retainer Fees and/or Progress Fees.

• Financial and Valuation Advisory ("FVA"), formerly known as Financial Advisory Services, primarily provides valuations of various assets, including: companies; illiquid debt and equity securities; and intellectual property (among other assets and liabilities). These valuations are used for financial reporting, tax reporting, and other purposes. In addition, our FVA business segment renders fairness opinions in connection with mergers and acquisitions and other transactions, and solvency opinions in connection with corporate spin-offs and dividend recapitalizations, and other types of financial opinions in connection with other transactions. Also, our FVA business segment provides dispute resolution services to clients where fees are usually based on the hourly rates of our financial professionals. Unlike our CF or FR segments, the fees generated in our FVA segment are generally not contingent on the successful completion of a transaction.

Note 2 — Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. ("GAAP"), pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC"), and include all information and footnotes required for consolidated financial statement presentation. The results of operations for the nine months ended December 31, 2019 are not necessarily indicative of the results of operations to be expected for the fiscal year ending March 31, 2020. The unaudited interim consolidated financial statements and notes to consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2019 (the "2019 Annual Report").

Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year. These reclassifications had no impact on net income, shareholders' equity or cash flows as previously reported.

7

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share data or as otherwise stated)

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries where it has a controlling financial interest. All intercompany balances and transactions have been eliminated in consolidation.

The Company carries its investments in unconsolidated entities over which it has significant influence but does not control using the equity method, and includes its ownership share of the income and losses in Other (income)/expense, net in the Consolidated Statements of Comprehensive Income.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements. Management estimates and assumptions also affect the reported amounts of revenues and expenses during the reporting period, and disclosure of contingent assets and liabilities at the reporting date. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Items subject to such estimates and assumptions include, but are not limited to: the allowance for doubtful accounts; the valuation of deferred tax assets, goodwill, accrued expenses, and share based compensation; the allocation of goodwill and other assets across the reporting units (segments); and reserves for income tax uncertainties and other contingencies.

Revenues

Revenues consist of fee revenues from advisory services and reimbursed costs incurred in fulfilling the contract. Revenues reflect fees generated from our CF, FR, and FVA business segments. See Note 3 for additional information.

Operating Expenses

The majority of the Company’s operating expenses are related to compensation for employees, which includes the amortization of the relevant portion of the Company’s share-based incentive plans (Note 14). Other types of operating expenses include: Travel, meals, and entertainment; Rent; Depreciation and amortization; Information technology and communications; Professional fees; and Other operating expenses.

Translation of Foreign Currency Transactions

The reporting currency for the consolidated financial statements of the Company is the U.S. dollar. The assets and liabilities of subsidiaries whose functional currency is other than the U.S. dollar are included in the consolidation by translating the assets and liabilities at the reporting period-end exchange rates; however, revenues and expenses are translated using the applicable exchange rates determined on a monthly basis throughout the fiscal year. Resulting translation adjustments are reported as a separate component of accumulated other comprehensive loss, net of applicable taxes.

From time to time, we enter into transactions to hedge our exposure to certain foreign currency fluctuations through the use of derivative instruments or other methods. As of December 31, 2019, we had two foreign currency forward contracts outstanding, one between the pound sterling and the U.S. dollar with a notional value of $5.0 million and one between the pound sterling and the euro with a notional value of €1.0 million. The fair value of these contracts represented a net gain included in Other operating expenses of $30 during the three months ended December 31, 2019. We had no foreign currency forward contracts outstanding as of December 31, 2018.

Cash and Cash Equivalents, and Restricted Cash

Cash and cash equivalents include cash held at banks and highly liquid investments with original maturities of three months or less. As of December 31, 2019 and March 31, 2019, the Company had cash balances with banks in excess of insured limits. The Company believes it is not exposed to any significant credit risk with respect to Cash and cash equivalents.

8

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share data or as otherwise stated)

The following table provides a reconciliation of Cash and cash equivalents, and Restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows.     

	December 31, 2019		March 31, 2019
Cash and cash equivalents	$	276,735	$	285,746
Restricted cash (1)	373		369
Total cash, cash equivalents, and restricted cash	$	277,108	$	286,115

(1) Restricted cash as of December 31, 2019 and March 31, 2019 consisted of a cash secured letter of credit issued for our Frankfurt office.

Recent Accounting Pronouncements

The Financial Accounting Standards Board (the “FASB”) issued the following authoritative guidance amending the FASB Accounting Standards Codification (“ASC”).

On April 1, 2019, we adopted Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), and all related amendments. See Note 16 for additional information.

In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting, which clarifies when changes to the terms or conditions of share-based payment awards require an entity to apply modification accounting. The amended guidance states an entity should account for the effects of a modification unless certain criteria are met, which include that the modified award has the same fair value, vesting conditions and classification as the original award. The Company adopted guidance effective April 1, 2019 and its application did not have a material impact on the consolidated financial statements and related disclosures.

In June 2016, the FASB issued ASU 2016-13 Financial Instruments-Credit Losses - Measurement of Credit Losses on Financial Instruments. The amended guidance involves several aspects of the accounting for credit losses related to certain financial assets that are not accounted for at fair value through net income and includes trade receivables and net investments in leases. The new guidance and subsequent updates, broadens the information that an entity must consider in developing its estimated credit losses expected to occur over the remaining life of assets measured either collectively or individually to include historical experience, current conditions and reasonable and supportable forecasts, replacing the existing incurred credit loss model and other models with the Current Expected Credit Losses (“CECL”) model.  The new guidance expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating credit losses and requires new disclosures of the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination. This new guidance is first effective for our fiscal year beginning on April 1, 2020 and will be adopted under a modified retrospective approach. We are evaluating the impact the adoption of this new guidance will have on our financial position and results of operations, which will depend on, among other things, the current and expected macroeconomic conditions and the nature and characteristics of financial assets held by us on the date of adoption.

In 2019, ASU 2019-01, Leases - Topic 842: Codification Improvements became effective, but there was no quantitative or qualitative effect on our financial statements.

Note 3 — Revenue Recognition

The Company generates revenues from contractual advisory services and reimbursed costs incurred in fulfilling those contracts. Revenues for all three business segments (CF, FR, and FVA) are recognized upon satisfaction of the performance obligation, which may be satisfied over time or at a point in time. The amount and timing of the fees paid vary by the type of engagement.

The amount of revenue recognized reflects the consideration we expect to be entitled to in exchange for those promised services (i.e., the “transaction price”). In determining the transaction price, we consider multiple factors, including the effects of variable consideration. Variable consideration is included in the transaction price only to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainties with respect to the amount are resolved. In determining when to include variable consideration in the transaction price, we consider the range of possible outcomes, the predictive value of our past experiences, the time period of when uncertainties expect to be resolved and the amount of consideration that is susceptible to factors outside of our influence, such as market volatility or the judgment and actions of third parties. The substantial majority of the Company’s advisory fees (i.e., Completion Fees) are considered variable and constrained as they are contingent upon future events, which include factors outside of our control (e.g., completion of a transaction or third party emergence from bankruptcy or approval by the court).

9

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share data or as otherwise stated)

Revenues from CF engagements primarily consist of fees generated in connection with advisory services related to corporate finance, mergers and acquisitions, and capital markets offerings. Completion Fees from these engagements are recognized at a point in time when the related transaction has been effectively closed. At that time, the Company has transferred control of the promised service and the customer obtains control. CF contracts generally contain a variety of promised services that may be capable of being distinct, but they are not distinct within the context of the contract as the various services are inputs to the combined output of successfully brokering a specific transaction.

Revenues from FR engagements primarily consist of fees generated in connection with advisory services to debtors, creditors and other parties-in-interest involving recapitalization or deleveraging transactions implemented both through bankruptcy proceedings and through out-of-court exchanges, consent solicitations or other mechanisms, as well as in distressed mergers and acquisitions and capital markets activities. Retainer Fees and Progress Fees from restructuring engagements are recognized over time using a time elapsed measure of progress as our clients simultaneously receive and consume the benefits of those services as they are provided. Completion Fees from these engagements are recognized at a point in time when the related transaction has been effectively closed. At that time, the Company has transferred control of the promised service and the customer obtains control.

Revenues from FVA engagements primarily consist of fees generated in connection with valuation and diligence services and rendering fairness, solvency and other financial opinions. Revenues are recognized at a point in time as these engagements include a singular objective that does not transfer any notable value to the Company’s clients until the opinions have been rendered and delivered to the client. However, certain engagements consist of advisory services where fees are usually based on the hourly rates of our financial professionals. Such revenues are recognized over time as the benefits of these advisory services are transferred to the Company’s clients throughout the course of the engagement, and, as a practical expedient, the Company has elected to use the ‘as-invoiced’ approach to recognize revenue.

Taxes, including value added taxes, collected from customers and remitted to governmental authorities are accounted for on a net basis, and therefore, are excluded from revenue in the Consolidated Statements of Comprehensive Income.

Disaggregation of Revenues

The Company has disclosed disaggregated revenues based on its business segment and geographical area, which provides a reasonable representation of how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. See Note 18 for additional information.

Contract Balances

The timing of revenue recognition may differ from the timing of payment by customers. The Company records a receivable when revenue is recognized prior to payment and there is an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred income (contract liability) until the performance obligations are satisfied.

Costs incurred in fulfilling advisory contracts with point-in-time revenue recognition are recorded as a contract asset when the costs (i) relate directly to a contract, (ii) generate or enhance resources of the Company that will be used in satisfying performance obligations, and (iii) are expected to be recovered. The Company amortizes the contract asset costs related to fulfilling a contract based on recognition of fee revenues for the corresponding contract. As the Company changed the presentation of costs incurred in fulfilling advisory contracts from a net presentation within non-compensation expenses to a gross basis in revenues, the Company records a contract liability for the reimbursable costs incurred until the fee revenue is recognized.

Costs incurred in fulfilling an advisory contract with over-time revenue recognition are expensed as incurred.

10

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share data or as otherwise stated)

The change in the Company’s contract assets and liabilities during the period primarily reflects the timing difference between the Company’s performance and the customer’s payment. The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers:

	April 1, 2019		Increase/(Decrease)			December 31, 2019
Receivables (1)	$	64,797	$	(9,327	)	$	55,470
Unbilled work in process, net of allowance for doubtful accounts	71,891		(3,934		)	67,957
Contract Assets (1)	6,033		909			6,942
Contract Liabilities (2)	27,812		84			27,896

(1) Included within Accounts receivable, net of allowance for doubtful accounts in the December 31, 2019 Consolidated Balance Sheet.

(2) Included within Deferred income in the December 31, 2019 Consolidated Balance Sheet.

During the three and nine months ended December 31, 2019, $3.4 million and $17.8 million of revenues, respectively, were recognized that were included in the Deferred income balance at the beginning of the period.

As a practical expedient, the Company does not disclose information about remaining performance obligations pertaining to (i) contracts that have an original expected duration of one year or less, and/or (ii) contracts where the variable consideration is allocated entirely to a wholly unsatisfied promise to transfer a distinct service that is or forms part of a single performance obligation. The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with an original expected duration exceeding one year was not material at December 31, 2019.

Note 4 — Related Party Transactions

The Company provides financial advisory services to ORIX USA and its affiliates and certain other related parties, and received fees for these services totaling approximately $0 and $197 during the three months ended December 31, 2019 and 2018, respectively, and $698 and $8,692 for the nine months ended December 31, 2019 and 2018, respectively.

The Company provided certain management and administrative services for the Company's unconsolidated entities and received fees for these services. As a result, the Company received net fees of $0 and $51 during the three months ended December 31, 2019 and 2018, respectively, and $126 and $275 during the nine months ended December 31, 2019 and 2018, respectively.

On March 12, 2018, pursuant to a registered underwritten public offering, we issued and sold 2,000,000 shares of our Class A common stock and certain of our former and current employees and members of our management sold 2,000,000 shares of our Class A common stock, in each case, at a price to the public of $0.04725 per share (the “March 2018 Follow-on Offering”). In connection with, and prior to, the March 2018 Follow-on Offering, on January 26, 2018, we entered into a Forward Share Purchase Agreement (the "January 2018 Forward Share Purchase Agreement"), with an indirect wholly owned subsidiary of ORIX USA pursuant to which we agreed to purchase from ORIX USA on April 5, 2018 the number of shares of our Class B common stock equal to the number of shares of our Class A common stock sold by us in the March 2018 Follow-on Offering for a purchase price per share equal to the public offering price in the March 2018 Follow-on Offering less underwriting discounts and commissions. On April 5, 2018, the Company settled the transaction provided for in the January 2018 Forward Share Purchase Agreement and acquired 2,000,000 shares of Class B common stock from ORIX USA using the net proceeds we received from the March 2018 Follow-on Offering and the shares were retired.  In accordance with the terms of the January 2018 Forward Share Purchase Agreement, the purchase price per share under the January 2018 Forward Share Purchase Agreement was reduced by the per share amount of the dividend paid to ORIX USA on the shares of our Class B common stock subject to the January 2018 Forward Share Purchase Agreement prior to the settlement of the transaction.

On June 4, 2018, pursuant to a registered underwritten public offering, ORIX USA sold 1,985,983 shares of our Class A common stock and certain of our former and current employees and members of our management sold 1,014,017 shares, in each case, at a price to the public of $49.15 per share (the "June 2018 Follow-on Offering"). Concurrently with the closing of the offering, the Company repurchased from ORIX USA 697,000 shares of Class A common stock at a price per share of $49.11.

On May 30, 2019, pursuant to a registered underwritten public offering, ORIX USA sold 3,000,000 shares of our Class A common stock to the public at a price of $45.80.

11

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share data or as otherwise stated)

On August 1, 2019, pursuant to a registered underwritten public offering, ORIX USA sold its remaining ownership of 3,377,935 shares of our Class A common stock to the public for net proceeds of approximately $154.1 million before expenses.

In the accompanying Consolidated Balance Sheets, the Company carried accounts receivable and unbilled work in progress from related parties totaling approximately $0 and $3 as of December 31, 2019 and March 31, 2019, respectively. The Company also deferred income from related parties for service fees totaling $0 and $34 as of December 31, 2019 and March 31, 2019, respectively.

Other assets in the accompanying Consolidated Balance Sheets includes loans receivable from certain employees of $15,693 and $15,228 as of December 31, 2019, and March 31, 2019, respectively.

Note 5 — Fair Value Measurements

The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels in accordance with ASC Topic 820, Fair Value Measurement:

• Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

• Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

• Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

For Level 3 investments in which pricing inputs are unobservable and limited market activity exists, management's determination of fair value is based upon the best information available and may incorporate management's own assumptions or involve a significant degree of judgment.

The following methods and assumptions were used by the Company in estimating fair value disclosures:

• Corporate debt securities: All fair value measurements are obtained from a third-party pricing service and are not adjusted by management.

• U.S. treasury securities: Fair values for U.S. treasury securities are based on quoted prices from recent trading activity of identical or similar securities. All fair value measurements are obtained from a third-party pricing service and are not adjusted by management.

The following table presents information about the Company's financial assets, and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair values:

	December 31, 2019
	Level 1		Level 2		Level 3		Total
Corporate debt securities	$	—	$	36,973	$	—	$	36,973
U.S. treasury securities	—		54,222		—		54,222
Total asset measured at fair value	$	—	$	91,195	$	—	$	91,195

	March 31, 2019
	Level 1		Level 2		Level 3		Total
Corporate debt securities	$	—	$	116,577	$	—	$	116,577
U.S. treasury securities	—		8,681		—		8,681
Total asset measured at fair value	$	—	$	125,258	$	—	$	125,258

12

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share data or as otherwise stated)

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given investment is based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors specific to the instrument.

The Company had no transfers between fair value levels during the nine months ended December 31, 2019.

The fair values of the financial instruments represent the amounts that would be received to sell assets or that would be paid to transfer liabilities in an orderly transaction between market participants as of a specified date. Fair value measurements maximize the use of observable inputs; however, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects the Company’s own judgments about the assumptions that market participants would use in pricing the asset or liability. Those judgments are developed by the Company based on the best information available in the circumstances, including expected cash flows and appropriately risk-adjusted discount rates, as well as available observable and unobservable inputs.

The carrying value of Cash and cash equivalents, Restricted cash, Accounts receivable, Unbilled work in process, Receivables from affiliates, Accounts payable and accrued expenses, and Deferred income approximates fair value due to the short maturity of these instruments.

The carrying value of the loans to employees included in Other assets, Loans payable to former shareholders and an unsecured loan which is included in Loan payable to non-affiliate, approximates fair value due to the variable interest rate borne by those instruments.

Note 6 — Investment Securities

Investment securities consist of corporate debt and U.S. Treasury securities with original maturities over 90 days. The Company classifies its investment securities as trading and measures them at fair value in the Consolidated Balance Sheets. Unrealized holding gains and losses for trading securities are included in Other operating expenses in the accompanying Consolidated Statements of Comprehensive Income.     

The amortized cost, gross unrealized gains (losses), and fair value of investment securities were as follows:

	December 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
Corporate debt securities	$	36,624	$	352	$	(3	)	$	36,973
U.S. treasury securities	53,959		264		(1		)	54,222
Total securities with unrealized gains	$	90,583	$	616	$	(4	)	$	91,195

	March 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
Corporate debt securities	$	116,220	$	372	$	(15	)	$	116,577
U.S. treasury securities	8,608		73		—			8,681
Total securities with unrealized gains	$	124,828	$	445	$	(15	)	$	125,258

13

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share data or as otherwise stated)

Scheduled maturities of the debt securities held by the Company within the investment securities portfolio were as follows:

	December 31, 2019				March 31, 2019
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due within one year	$	63,760	$	63,840	$	96,109	$	96,175
Due within years two through five	26,823		27,355		28,719		29,083
Total debt within the investment securities portfolio	$	90,583	$	91,195	$	124,828	$	125,258

Note 7 — Allowance for Doubtful Accounts

The allowance for doubtful accounts on receivables reflects management’s best estimate of probable inherent losses determined principally on the basis of historical experience and review of uncollected revenues and is recorded through provision for bad debts which is included in Other operating expenses in the accompanying Consolidated Statements of Comprehensive Income. Amounts deemed to be uncollectible are written off against the allowance for doubtful accounts.

	Three Months Ended December 31,						Nine Months Ended December 31,
	2019			2018			2019			2018
Beginning balance	$	5,375		$	11,501		$	5,596		$	11,391
Provision for bad debts	2,215			370			2,087			983
Recovery or write-off of uncollectible accounts	(2,020		)	(5,232		)	(2,113		)	(5,735		)
Ending balance	$	5,570		$	6,639		$	5,570		$	6,639

Note 8 — Property and Equipment

Property and equipment are stated at cost. Repair and maintenance charges are expensed as incurred and costs of renewals or improvements are capitalized at cost. Depreciation on furniture and office equipment is recognized on a straight-line basis over the estimated useful lives of the respective assets. Leasehold improvements are recorded as prepaid assets and included within fixed lease payments. See Note 16 for additional information.

Property and equipment, net of accumulated depreciation consist of the following:

	December 31, 2019			March 31, 2019
Equipment	$	8,838		$	7,916
Furniture and fixtures	21,953			19,445
Leasehold improvements	42,577			34,370
Computers and software	17,552			11,499
Other	1,117			1,117
Total cost	92,037			74,347
Less: accumulated depreciation	(50,481		)	(43,313		)
Total net book value	$	41,556		$	31,034

Additions to property and equipment during the nine months ended December 31, 2019 were primarily related to leasehold improvement costs incurred and computer and software purchases.

Depreciation expense of approximately $2,423 and $2,084 was recognized during the three months ended December 31, 2019 and 2018, respectively, and $7,101 and $6,348 was recognized during the nine months ended December 31, 2019 and 2018, respectively.

14

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share data or as otherwise stated)

Note 9 — Goodwill and Other Intangible Assets

Goodwill represents an acquired company’s acquisition cost over the fair value of acquired net tangible and intangible assets. Goodwill is the net asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Intangible assets identified and accounted for include tradenames and marks, backlog, developed technologies, and customer relationships. Those intangible assets with finite lives, including backlog and customer relationships, are amortized over their estimated useful lives.

Goodwill is reviewed annually for impairment and more frequently if potential impairment indicators exist. Goodwill is reviewed for impairment in accordance with Accounting Standards Update ("ASU") No. 2011-08, Testing Goodwill for Impairment, which permits management to make a qualitative assessment of whether it is more likely than not that one of its reporting unit’s fair value is less than its carrying amount before applying the two-step goodwill impairment test. If management concludes that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then management would not be required to perform the two-step impairment test for that reporting unit. If the assessment indicates that it is more likely than not that the reporting unit’s fair value is less than its carrying value, management must test further for impairment utilizing a two-step process. Step 1 compares the estimated fair value of the reporting unit with its carrying value, including goodwill. If the carrying value of the reporting unit exceeds the estimated fair value, an impairment exists and is measured in Step 2 as the excess of the recorded amount of goodwill over the implied fair value of goodwill resulting from the valuation of the reporting unit. Impairment testing of goodwill requires a significant amount of judgment in assessing qualitative factors and estimating the fair value of the reporting unit, if necessary. The fair value is determined using an estimated market value approach, which considers estimates of future after tax cash flows, including a terminal value based on market earnings multiples, discounted at an appropriate market rate. As of December 31, 2019, management concluded that it was not more likely than not that the Company’s reporting units’ fair value was less than their carrying amount and no further impairment testing had been considered necessary.

Indefinite-lived intangible assets are reviewed annually for impairment in accordance with ASU 2012-02, Testing Indefinite-lived Intangible Assets for Impairment, which provides management the option to perform a qualitative assessment. If it is more likely than not that the asset is impaired, the amount that the carrying value exceeds the fair value is recorded as an impairment expense. As of December 31, 2019, management concluded that it was not more likely than not that the fair values were less than the carrying values.

Intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group (inclusive of other long-lived assets) be tested for possible impairment, management first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. As of December 31, 2019, no events or changes in circumstances were identified that indicated that the carrying amount of the finite-lived intangible assets were not recoverable.

The following table provides a reconciliation of Goodwill and other intangibles, net reported on the Consolidated Balance Sheets.

	Useful Lives	December 31, 2019			March 31, 2019
Goodwill (1)	Indefinite	$	626,519		$	594,812
Tradename-Houlihan Lokey (1)	Indefinite	192,210			192,210
Other intangible assets	Varies	18,217			18,614
Total cost		836,946			805,636
Less: accumulated amortization		(14,214		)	(11,032		)
Goodwill and other intangibles, net		$	822,732		$	794,604
Deferred tax liability (1)		(51,676		)	(51,676		)
Total net book value, after taxes		$	771,056		$	742,928

(1) When HL CA was acquired by Fram in January 2006, approximately $392,600 of goodwill and $192,210 of indefinite-lived intangible assets were generated and recognized. In accordance with ASC Topic 805, Business Combinations, since HL CA was wholly owned by Fram, this goodwill and all other purchase accounting-related adjustments were pushed down to the Company’s reporting level. Through both foreign and domestic acquisitions made directly by HL CA and the Company since 2006, additional goodwill of approximately $233,919, inclusive of foreign currency translations, has been recognized.

15

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share data or as otherwise stated)

Amortization expense of approximately $1,913 and $1,551 was recognized for the three months ended December 31, 2019 and 2018, respectively, and $5,179 and $4,461 was recognized for the nine months ended December 31, 2019 and 2018, respectively.

The estimated future amortization for amortizable intangible assets for each of the next five years are as follows:

	Year Ended March 31,
Remainder of 2020	$	2,007
2021	1,419
2022	157
2023	7
2024	7

Note 10 — Loans Payable

In August 2015, the Company entered into a revolving line of credit with Bank of America, N.A. (the "2015 Line of Credit"), which allowed for borrowings of up to $75.0 million and originally matured in August 2017. On July 28, 2017, the Company extended the maturity date of the 2015 Line of Credit to August 18, 2019, and, on August 15, 2019, the parties further extended the maturity date of the 2015 Line of Credit to September 18, 2019 (or if such date is not a business day, the immediately preceding business day). On August 23, 2019, the Company refinanced the 2015 Line of Credit by entering into a new syndicated revolving line of credit with Bank of America, N.A. and certain other financial institutions party thereto (the "2019 Line of Credit"), which allows for borrowings of up to $100.0 million (and, subject to certain conditions, provides the Company with an expansion option, which, if exercised in full, would provide for a total credit facility of $200.0 million) and matures on August 23, 2022 (or if such date is not a business day, the immediately preceding business day). The agreement governing the 2019 Line of Credit provides that borrowings bear interest at an annual rate of LIBOR plus 1.00%, commitment fees apply to unused amounts, and contains debt covenants which require that the Company maintain certain financial ratios. As of December 31, 2019, no principal was outstanding under the 2019 Line of Credit.

Prior to the IPO, Fram maintained certain loans payable to former shareholders consisting of unsecured notes payable which were transferred to the Company in conjunction with the IPO. The average interest rate on the individual notes was 3.10% and 3.69% as of December 31, 2019 and 2018, respectively, and the maturity dates range from 2020 to 2027. The Company incurred interest expense on these notes of $15 and $24 during the three months ended December 31, 2019 and 2018, respectively, and $52 and $74 during the nine months ended December 31, 2019 and 2018, respectively.

In November 2015, the Company acquired the investment banking operations of Leonardo & Co. NV ("Leonardo") in Germany, the Netherlands, and Spain, and made a 49% investment in Leonardo's operations in Italy. Total consideration included an unsecured loan of EUR 14 million payable on November 16, 2040, the remaining balance of which is included in Loan payable to non-affiliates on our Consolidated Balance Sheets. The loan bears interest at an annual rate of 1.50%. In each of January 2017, December 2017, December 2018, and December 2019, we paid a portion of this loan in the amount of EUR 2.9 million. The company incurred interest expense on this loan of $17 and $32 during the three months ended December 31, 2019 and 2018, respectively, and $64 and $106 for the nine months ended December 31, 2019 and 2018, respectively.

As described in Note 1, the Company acquired the remaining 51% of Lara, which is the holding company for Leonardo's operations in Italy, in June 2019. During the quarter ended September 30, 2019, the Company completed the redemption of the loans that were assumed upon the acquisition of the remaining 51% of Lara and that had been included in the Loan payable to non-affiliates on our Consolidated Balance Sheets.

An acquisition made in January 2017 included non-contingent consideration with a carrying value of $1,983 and $1,983 as of December 31, 2019 and March 31, 2019, respectively, which is included in Other liabilities in the accompanying Consolidated Balance Sheets.

16

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share data or as otherwise stated)

In April 2018, the Company acquired Quayle Munro Limited. Total consideration included non-interest bearing unsecured convertible loans totaling GBP 10.5 million payable on May 31, 2022, which is included in Other liabilities in the accompanying Consolidated Balance Sheets. Under certain circumstances, the notes may be exchanged for Company stock over a three year period in equal annual installments starting on May 31, 2020. The Company incurred imputed interest expense on these notes of $99 and $98 for the three months ended December 31, 2019 and 2018, respectively, and $228 and $299 for the nine months ended December 31, 2019 and 2018, respectively.

In May 2018, the Company acquired BearTooth Advisors. Total consideration included an unsecured note of $2.8 million bearing interest at an annual rate of 2.88% and payable on May 21, 2048. The Company incurred interest expense on this note of $26 for the three months ended December 31, 2019 and 2018, and $79 and $61 during the nine months ended December 31, 2019 and 2018, respectively.

In December 2019, the Company acquired Freeman & Co. Total consideration included an unsecured note of $4.0 million bearing interest at an annual rate of 2.75% and payable on December 16, 2049. The Company incurred interest expense on this notes of $5 for the three months ended December 31, 2019.

The scheduled aggregate repayments of our Loans payable to former shareholders, Other liabilities, and the Loan payable to non-affiliates in the accompanying Consolidated Balance Sheets on a fiscal year-end basis as of December 31, 2019 are as follows:

Remaining 2020	$	1,123
2021	6,219
2022	1,760
2023	17,816
2024	338
2025 and thereafter	13,639
Total	$	40,895

Note 11 — Accumulated Other Comprehensive (Loss)

Accumulated other comprehensive (loss) is comprised of Foreign currency translation adjustments of $14,388 and $(2,760) for the three months ended December 31, 2019 and 2018, respectively, and $977 and $(19,038) for the nine months ended December 31, 2019 and 2018, respectively. The change in foreign currency translation was impacted by the vote in the U.K. to withdraw from the European Union. We are currently in a period in which the terms of withdrawal are being negotiated and there may be impacts on our European business that are unknown at this time. We believe the change in foreign currency translation will become more volatile, but we do not expect this to have a material impact on our operating results and financial position.

Accumulated other comprehensive (loss) at December 31, 2019 was comprised of the following:

Balance, April 1, 2019	$	(30,294	)
Foreign currency translation adjustment	977
Balance, December 31, 2019	$	(29,317	)

Note 12 — Income Taxes

Prior to the IPO, ORIX USA and its subsidiaries, including the Company, filed consolidated federal income tax returns and separate returns in state and local jurisdictions and did so for fiscal year 2016 through the date of the IPO. The Company reported income tax expense as if it filed separate returns in all jurisdictions. Following the IPO, the Company files a consolidated federal income tax return separate from ORIX USA, as well as consolidated and separate returns in state and local jurisdictions, and the Company reports income tax expense on this basis.

We account for income taxes in accordance with ASC Topic 740, Income Taxes, which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax basis of our assets and liabilities. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. The measurement of the deferred items is based on enacted tax laws and applicable tax rates. A valuation allowance related to a deferred tax asset is recorded if it is more likely than not that some portion or all of the deferred tax asset will not be realized.

17

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share data or as otherwise stated)

The Company utilized a comprehensive model to recognize, measure, present, and disclose in its financial statements any uncertain tax positions that have been taken or are expected to be taken on a tax return. The impact of an uncertain tax position that is more likely than not of being sustained upon audit by the relevant taxing authority must be recognized at the largest amount that is more likely than not to be sustained. No portion of an uncertain tax position will be recognized if the position has less than a 50% likelihood of being sustained. Interest expense and penalties related to income taxes are included in the provision for income taxes in the accompanying Consolidated Statements of Comprehensive Income.

The Global Intangible Low-Taxed Income tax (“GILTI inclusion”) can be recognized in the financial statements through an accounting policy election by either recording a period cost (permanent item) or providing deferred income taxes stemming from certain basis differences that are expected to result in GILTI inclusion. The Company has elected to account for the tax impacts of the GILTI inclusion as a period cost.

The Company’s provision for income taxes was $20,161 and $18,974 for the three months ended December 31, 2019 and 2018, respectively, and $39,954 and $48,089 for the nine months ended December 31, 2019 and 2018, respectively. This represents effective tax rates of 29.2% and 30.2% for the three months ended December 31, 2019 and 2018, respectively, and 24.3% and 29.7% and for the nine months ended December 31, 2019 and 2018, respectively.

The decrease in the Company's tax rate during the nine months ended December 31, 2019 relative to the same period in 2018 was primarily a result of the vesting of stock that occurred in April and May 2019. The primary drivers of the Company’s effective tax rate being higher than the statutory rate of 21% for the three months ended December 31, 2019 were the provision for state taxes, the GILTI inclusion, limits on the deductibility of executive compensation under IRC Section 162(m) and limits on the deductibility of certain meal and entertainment expense items.

Note 13 — Earnings Per Share

The calculations of basic and diluted earnings per share attributable to holders of shares of common stock are presented below.

	Three Months Ended December 31,				Nine Months Ended December 31,
	2019		2018		2019		2018
Numerator:
Net income attributable to holders of shares of common stock—basic	$	48,894	$	43,957	$	124,779	$	113,758
Net income attributable to holders of shares of common stock—diluted	$	48,894	$	43,957	$	124,779	$	113,758
Denominator:
Weighted average shares of common stock outstanding—basic	62,014,564		61,972,027		62,199,716		62,399,221
Weighted average number of incremental shares issuable from unvested restricted stock and restricted stock units, as calculated using the treasury stock method	3,593,462		3,786,652		3,570,340		3,586,439
Weighted average shares of common stock outstanding—diluted	65,608,026		65,758,679		65,770,056		65,985,660
Basic earnings per share	$	0.79	$	0.71	$	2.01	$	1.82
Diluted earnings per share	$	0.75	$	0.67	$	1.90	$	1.72

18

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share data or as otherwise stated)

Note 14 — Employee Benefit Plans

Defined Contribution Plans

The Company sponsors a 401(k) defined contribution savings plan for its domestic employees and defined contribution retirement plans for its international employees. The Company contributed approximately $1,815 and $1,528 during the three months ended December 31, 2019 and 2018, respectively, and $3,524 and $2,837 during the nine months ended December 31, 2019 and 2018, respectively, to these defined contribution plans.

Share-Based Incentive Plans

Following the IPO, additional awards of restricted shares have been and will be made under the Amended and Restated Houlihan Lokey, Inc. 2016 Incentive Award Plan (the "2016 Incentive Plan"), which became effective in August 2015 and was amended in October 2017. Under the 2016 Incentive Plan, it is anticipated that the Company will continue to grant cash and equity-based incentive awards to eligible service providers in order to attract, motivate and retain the talent necessary to operate the Company's business. Equity-based incentive awards issued under the 2016 Incentive Plan generally vest over a four-year period. An aggregate of 37,847 restricted shares of Class A common stock were granted under the 2016 Incentive Plan to (i) two independent directors in August 2015 at $21 per share, (ii) two independent directors in the first quarter of fiscal 2017 at $25.21 per share, (iii) one independent director in the first quarter of fiscal 2017 at $23.93 per share, (iv) three independent directors in the first quarters of fiscal 2018 and 2019 at $33.54 and $44.50 per share, respectively, (v) one independent director in the third quarter of fiscal 2019 at $42.41 per share, (vi) four independent directors in the first quarter of fiscal 2020 at $47.22 per share, and (vii) one independent director in the third quarter of fiscal 2020 at $47.21 per share.

No excess tax benefit was recognized during the three months ended December 31, 2019 or 2018 and an excess tax benefit of $7,605 was recognized during the nine months ended December 31, 2019 as a component of the provision for income taxes and an operating activity on the Consolidated Statements of Cash Flows, with no such benefit for the nine months ended December 31, 2018. The excess tax benefit recognized in the first quarter of fiscal 2020 was related to shares vested in April and May 2019. For the comparable fiscal 2019 period, vesting of shares scheduled to vest in April and May 2018 was accelerated on October 21, 2017 and the corresponding excess tax benefit was recognized in the fiscal year ended March 31, 2018. The Company recorded cash outflows of $(31,469) and $(1,947) related to the settlement of share-based awards in satisfaction of withholding tax requirements in financing activities on the Consolidated Statements of Cash Flows for the nine months ended December 31, 2019 and 2018, respectively.

The share awards are classified as equity awards at the time of grant unless the number of shares granted is unknown. Awards that are settleable in shares based upon a future determinable stock price are classified as liabilities until the price is established and the resulting number of shares is known, at which time they are re-classified from liabilities to equity awards. Activity in equity classified share awards which relate to the Company's 2006 Incentive Award Plan (the "2006 Incentive Plan") and the 2016 Incentive Plan during the nine months ended December 31, 2019 and 2018 is as follows:

Unvested Share Awards	Shares		Weighted Average Grant Date Fair Value
Balance, April 1, 2019	3,763,984		$	32.29
Granted	1,368,079		47.02
Vested	(1,496,315	)	29.30
Forfeited/Repurchased	(81,008	)	38.56
Balance, December 31, 2019	3,554,740		$	39.13
Balance, April 1, 2018	2,854,893		$	26.39
Granted	1,059,616		49.35
Vested	(76,702	)	48.78
Forfeited/Repurchased	(57,797	)	33.16
Balance, December 31, 2018	3,780,010		$	32.28

19

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share data or as otherwise stated)

Activity in liability classified share awards during the nine months ended December 31, 2019 and 2018 is as follows:

Awards Settleable in Shares	Fair Value
Balance, April 1, 2019	$	21,676
Offer to grant	6,410
Share price determined-converted to cash payments	(52		)
Share price determined-transferred to equity grants	(6,457		)
Forfeited	(274		)
Balance, December 31, 2019	$	21,303
Balance at April 1, 2018	$	15,493
Offer to grant	11,407
Share price determined-converted to cash payments	(300		)
Share price determined-transferred to equity grants	(4,655		)
Forfeited	(476		)
Balance, December 31, 2018	$	21,469

Compensation expenses for the Company associated with both equity and liability classified awards totaled $16,682 and $13,781 for the three months ended December 31, 2019 and 2018, respectively, and $47,791 and $44,540 for the nine months ended December 31, 2019 and 2018, respectively.

As of December 31, 2019, there was $139,061 of total unrecognized compensation cost related to unvested share awards granted under both the 2006 Incentive Plan and 2016 Incentive Plan. That cost is expected to be recognized over a weighted average period of 1.19 years.

On October 19, 2017, our board of directors approved an amendment (the “Amendment”) to the 2016 Incentive Plan reducing the number of shares of common stock available for issuance under the 2016 Incentive Plan by approximately 12.2 million shares. Under the Amendment, the aggregate number of shares of common stock that are available for issuance under awards granted pursuant to the 2016 Incentive Plan is equal to the sum of (i) 8.0 million and (ii) any shares of our Class B common stock that are subject to awards under our 2006 Incentive Plan that terminate, expire or lapse for any reason after October 19, 2017.

The number of shares available for issuance will be increased annually beginning on April 1, 2018 and ending on April 1, 2025, by an amount equal to the lowest of:

• 6,540,659 shares of our Class A common stock and Class B common stock;

• Six percent of the shares of Class A common stock and Class B common stock outstanding on the final day of the immediately preceding fiscal year; and

• such smaller number of shares as determined by our board of directors.

Note 15 — Stockholders' Equity

There are two classes of authorized HL, Inc. common stock: Class A common stock and Class B common stock. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion rights. Each share of Class A common stock is entitled to one vote per share, and each share of Class B common stock is entitled to ten votes per share. Each share of Class B common stock may be converted into one share of Class A common stock at the option of its holder and will be automatically converted into one share of Class A common stock upon transfer thereof, subject to certain exceptions.

As described in Note 4 above, in the March 2018 Follow-on Offering we issued and sold 2,000,000 shares of our Class A common stock and certain of our former and current employees and members of our management sold 2,000,000 shares of our Class A common stock, in each case, at a price to the public of $47.25 per share.

20

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share data or as otherwise stated)

In connection with, and prior to, the March 2018 Follow-on Offering, on January 26, 2018, we entered into the January 2018 Forward Share Purchase Agreement, pursuant to which we agreed to purchase from ORIX USA on April 5, 2018 the number of shares of our Class B common stock equal to the number of shares of our Class A common stock sold by us in the March 2018 Follow-on Offering for a purchase price per share equal to the public offering price in the March 2018 Follow-on Offering less underwriting discounts and commissions. The cash proceeds from the March 2018 Follow-on Offering that were used to consummate the purchase pursuant to the January 2018 Forward Share Purchase Agreement were held in an escrow account as of March 31, 2018 and presented as restricted cash as discussed in Note 2. On April 5, 2018, we settled the transaction provided for in the January 2018 Forward Share Purchase Agreement and acquired 2,000,000 shares of Class B common stock from ORIX USA using the net proceeds we received from the March 2018 Follow-on Offering. As the January 2018 Forward Share Purchase Agreement required physical settlement by purchase of a fixed number of shares in exchange for cash, the 2,000,000 shares that were purchased were excluded from the Company's calculation of basic and diluted earnings per share in the Company's financial statements for the year ended March 31, 2018. In addition, as the agreement provided for the refund of any dividends paid during the term on the underlying Class A common stock, such shares were not classified as participating securities and the Company did not apply the two-class method for calculating its earnings per share.

As described in Note 4 above, in the June 2018 Follow-on Offering, ORIX USA sold 1,985,983 shares of our Class A common stock and certain of our former and current employees and members of our management sold 1,014,017 shares, in each case, at a price to the public of $49.15 per share. Concurrently with the closing of the offering, the Company repurchased from ORIX USA 697,000 shares of Class A common stock at a price per share of $49.11.

On May 30, 2019, pursuant to a registered underwritten public offering, ORIX USA sold 3,000,000 shares of our Class A common stock to the public at a price of $45.80.

On August 1, 2019, pursuant to a registered underwritten public offering, ORIX USA sold its remaining ownership of 3,377,935 shares of our Class A common stock to the public at a price of $45.62.

Class A common stock

During the nine months ended December 31, 2019, 9,145 shares were issued to non-employee directors, and 5,992,399 shares were converted from Class B to Class A. During the nine months ended December 31, 2018, 6,570 shares were issued to non-employee directors, and 2,020,474 shares were converted from Class B to Class A. As of December 31, 2019, there were 43,533,269 Class A shares held by the public and 36,724 Class A shares held by non-employee directors.

Class B common stock

Each share of Class B common stock may be converted into one share of Class A common stock at the option of its holder and will be automatically converted into one share of Class A common stock upon transfer thereof, subject to certain exceptions. As of December 31, 2019, there were 21,998,937 Class B shares held by the HL Voting Trust.

Dividends

Previously declared dividends related to unvested shares of $7,719 and $7,034 were unpaid as of December 31, 2019 and 2018, respectively.

Stock subscriptions receivable

Employees of the Company periodically issued notes receivable to the Company documenting loans made by the Company to such employees for the purchase of restricted shares of the Company.

Share repurchases

In February 2017, the board of directors authorized the repurchase of up to $50.0 million of the Company's Class A common stock. In May 2017, the Company entered into a stock buyback program with a third-party financial institution to purchase shares of common stock. In July 2018, the board of directors authorized the repurchase of up to an additional $100 million of the Company's common stock.

21

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share data or as otherwise stated)

During the three months ended December 31, 2019 and 2018, the Company repurchased 1,350 and 53 shares, respectively, of Class B common stock, to satisfy $65 and $2 of required withholding taxes in connection with the vesting of restricted awards, respectively. During the three months ended December 31, 2019 and 2018, the Company repurchased an additional 97,956 and 370,728 shares of its outstanding common stock, respectively, at a weighted average price of $44.12 and $40.33 per share, excluding commissions, for an aggregate purchase price of $4,322 and $14,952, respectively.

During the nine months ended December 31, 2019 and 2018, the Company repurchased 610,943 and 133 shares, respectively, of Class B common stock, to satisfy $29,349 and $6 of required withholding taxes in connection with the vesting of restricted awards, respectively. During the nine months ended December 31, 2019 and 2018, the Company repurchased an additional 632,353 and 1,480,869 shares of its outstanding common stock, respectively, at a weighted average price of $43.98 and $46.71 per share, excluding commissions, for an aggregate purchase price of $27,809 and $69,169, respectively.

Note 16 — Leases

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). We adopted the standard effective April 1, 2019, using the modified retrospective approach applied as of the beginning of the period of adoption. The Company elected to utilize transition guidance within the new standard that permits us to (i) continue to report under ASC 840 guidance for comparative periods consistent with previously issued financial statements; and (ii) carryforward our prior conclusions about lease identification, classification, and initial direct costs. The most significant impact of this adoption relates to the recognition of right-of-use ("ROU") assets and liabilities for all leases classified operating leases when the Company is the lessee in the arrangement. Currently, the Company does not have any lessor arrangements; therefore, adoption of the standard did not impact our accounting.

We assess whether an arrangement is or contains a lease at the inception of the agreement. ROU assets represent our right to use underlying assets for the lease term and lease liabilities represent our obligation to make lease payments arising from leases. ROU assets and lease liabilities are recognized at the commencement date based on the present value of future lease payments over the lease terms utilizing the discount rate implicit in the leases. If the discount rate implicit in the leases is not readily determinable, the present value of future lease payments is calculated utilizing the Company’s incremental borrowing rate, which approximates the interest that the Company would have to pay on a secured loan. The Company elected to utilize a portfolio approach and applies the rates to a portfolio of leases with similar terms and economic environments. The terms of our leases used to determine the ROU asset and lease liability account for options to extend when it is reasonably certain that we will exercise those options, if applicable. ROU assets and lease liabilities are subject to adjustment in the event of modification to lease terms, changes in probability that an option to extend or terminate a lease would be exercised and other factors. In addition, ROU assets are periodically reviewed for impairment.

Lease expense is recognized on a straight-line basis over the lease terms. Lease expense includes amortization of the ROU assets and accretion of the lease liabilities. Amortization of ROU assets is calculated as the periodic lease cost less accretion of the lease liability. The amortized period for ROU assets is limited to the expected lease term.

The Company has elected a practical expedient to combine the lease and non-lease components into a single lease component. The Company also elected the short-term lease measurement and recognition exemption and does not establish ROU assets or lease liabilities for operating leases with terms of 12 months or less.

On adoption, the Company recognized the present value of its existing minimum lease payments as a $136.9 million ROU asset and a $152.3 million lease liability. The difference between the ROU asset and the lease liability on adoption primarily arises from previously recorded deferred rent, which was effectively reclassified to the ROU asset on adoption. As a result, there was no impact to retained earnings in the Consolidated Balance Sheets.

Lessee Arrangements

Operating Leases

We lease real estate and equipment used in operations from third parties. As of December 31, 2019, the remaining term of our operating leases ranged from 1 to 17 years with various automatic extensions.

22

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share data or as otherwise stated)

The following table outlines the maturity of our existing operating lease liabilities on a fiscal year-end basis as of December 31, 2019.

	Operating Leases
Remaining 2020	$	7,928
2021	27,990
2022	23,595
2023	19,587
2024	14,787
Thereafter	87,024
Total	180,911
Less: present value discount	(30,754		)
Operating lease liabilities	$	150,157

As of December 31, 2019, the Company entered into three additional office space operating leases that have not yet commenced, for approximately $32.0 million. These operating leases will commence before fiscal year 2021 with lease terms of 6 to 16 years.

Lease costs

	Three Months Ended December 31, 2019			Nine Months Ended December 31, 2019
Operating lease expense	$	6,466		$	21,729
Variable lease expense (1)	2,999			12,675
Short-term lease expense	114			195
Less: Sublease income	(48		)	(145		)
Total lease costs	$	9,531		$	34,454

^{(1)  Primarily consists of payments for property taxes, common area maintenance and usage based operating costs.}  

Weighted-average details

	December 31, 2019
Weighted-average remaining lease term (years)	9
Weighted-average discount rate	4.1	%

Supplemental cash flow information related to leases:

	Nine Months Ended December 31, 2019
Operating cash flows:
Cash paid for amounts included in the measurement of Operating lease liabilities	$	17,970
Non-cash activity:
Change in operating right-of-use assets due to remeasurement	$	5,883

23

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share data or as otherwise stated)

Note 17 — Commitments and Contingencies

The Company has been named in various legal actions arising in the normal course of business. In the opinion of the Company, in consultation with legal counsel, the final resolutions of these matters are not expected to have a material adverse effect on the Company’s financial condition, operations and cash flows.

The Company also provides routine indemnifications relating to certain real estate (office) lease agreements under which it may be required to indemnify property owners for claims and other liabilities arising from the Company’s use of the applicable premises. In addition, the Company guarantees the performance of its subsidiaries under certain office lease agreements. The terms of these obligations vary, and because a maximum obligation is not explicitly stated, the Company has determined that it is not possible to make an estimate of the maximum amount that it could be obligated to pay under such contracts. Based on historical experience and evaluation of specific indemnities, management believes that judgments, if any, against the Company related to such matters are not likely to have a material effect on the consolidated financial statements. Accordingly, the Company has not recorded any liability for these obligations as of December 31, 2019 or March 31, 2019.

There have been no material changes outside of the ordinary course of business to our known contractual obligations, which are set forth in the table included in Item 7 in our 2019 Annual Report.

Note 18 — Segment and Geographical Information

The Company’s reportable segments are described in Note 1 and each are individually managed and provide separate services which require specialized expertise for the provision of those services. Revenues by segment represent fees earned on the various services offered within each segment. Segment profit consists of segment revenues, less (1) direct expenses including compensation, travel, meals and entertainment, professional fees, and bad debt and (2) expenses allocated by headcount such as communications, rent, depreciation and amortization, and office expense. The corporate expense category includes costs not allocated to individual segments, including charges related to incentive compensation and share-based payments to corporate employees, as well as expenses of senior management and corporate departmental functions managed on a worldwide basis, including office of the executives, accounting, human capital, marketing, information technology, and compliance and legal. The following tables present information about revenues, profit and assets by segment and geography.    

24

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share data or as otherwise stated)

	Three Months Ended December 31,						Nine Months Ended December 31,
	2019			2018			2019			2018
Revenues by segment
Corporate Finance	$	201,137		$	183,965		$	490,707		$	462,893
Financial Restructuring	92,808			75,013			249,438			218,173
Financial and Valuation Advisory	39,570			39,035			116,529			111,941
Revenues	$	333,515		$	298,013		$	856,674		$	793,007
Segment profit (1)
Corporate Finance	$	58,495		$	62,388		$	138,611		$	146,287
Financial Restructuring	28,391			11,129			75,956			52,932
Financial and Valuation Advisory	7,163			6,302			24,384			20,386
Total segment profit	94,049			79,819			238,951			219,605
Corporate expenses (2)	26,033			17,576			78,005			61,059
Other (income)/expense, net	(1,039		)	(688		)	(3,787		)	(3,301		)
Income before provision for income taxes	$	69,055		$	62,931		$	164,733		$	161,847

(1) We adjust the compensation expense for a business segment in situations where an employee residing in one business segment is performing work in another business segment where the revenues are accrued. Segment profit may vary significantly between periods depending on the levels of collaboration among the different segments.

(2) Corporate expenses represent expenses that are not allocated to individual business segments such as office of the executives, accounting, information technology, compliance, legal, marketing, and human capital.

	December 31, 2019		March 31, 2019
Assets by segment
Corporate Finance	$	433,663	$	403,928
Financial Restructuring	167,357		184,364
Financial and Valuation Advisory	127,246		127,744
Total segment assets	728,266		716,036
Corporate assets	810,364		709,876
Total assets	$	1,538,630	$	1,425,912

	Three Months Ended December 31,				Nine Months Ended December 31,
	2019		2018		2019		2018
Revenues by geography
United States	$	294,083	$	228,825	$	740,520	$	643,111
International	39,432		69,188		116,154		149,896
Total revenues	$	333,515	$	298,013	$	856,674	$	793,007

	December 31, 2019		March 31, 2019
Assets by geography
United States	$	1,052,168	$	1,021,975
International	486,462		403,937
Total assets	$	1,538,630	$	1,425,912

Note 19 — Subsequent Events

On January 23, 2020, the Company's board of directors declared a quarterly cash dividend of $0.31 per share of Class A and Class B common stock, payable on March 16, 2020, to shareholders of record on March 5, 2020.

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Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

The following discussion should be read together with our consolidated financial statements and the related notes that appear elsewhere in this Quarterly Report on Form 10-Q. We make statements in this discussion that are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “intends,” “predicts,” “potential” or “continue,” the negative of these terms or other similar expressions. These forward-looking statements, which are subject to risks, uncertainties, and assumptions about us, may include projections of our future financial performance, based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including but not limited to, the factors listed under the heading “Cautionary Note Regarding Forward-Looking Statements” in our Annual Report on Form 10-K for the year ended March 31, 2019 (the "2019 Annual Report"). Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements speak only as of the date of this filing. You should not rely upon forward-looking statements as a prediction of future events. We are under no duty to and we do not undertake any obligation to update or review any of these forward-looking statements after the date of this filing to conform our prior statements to actual results or revised expectations whether as a result of new information, future developments or otherwise.

Key Financial Measures

Revenues

Revenues include fee revenues and reimbursements of expenses (see Note 2 and Note 3 for additional information). Revenues reflect revenues from our Corporate Finance (“CF”), Financial Restructuring (“FR”), and Financial and Valuation Advisory (“FVA”), business segments that substantially consist of fees for advisory services.

Revenues for all three business segments are recognized upon satisfaction of the performance obligation and may be satisfied over time or at a point in time. The amount and timing of the fees paid vary by the type of engagement. In general, advisory fees are paid at the time an engagement letter is signed (“Retainer Fees”), during the course of the engagement (“Progress Fees”), or upon the successful completion of a transaction or engagement (“Completion Fees”).

CF provides general financial advisory services in addition to advice on mergers and acquisitions and capital markets offerings. We advise public and private institutions on a wide variety of situations, including buy-side and sell-side transactions, as well as leveraged loans, private mezzanine debt, high-yield debt, initial public offerings, follow-ons, convertibles, equity private placements, private equity, and liability management transactions, and advise financial sponsors on all types of transactions. The majority of our CF revenues consists of Completion Fees. CF transactions can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to Retainer Fees and in some cases Progress Fees that may have been earned.

FR provides advice to debtors, creditors and other parties-in-interest in connection with recapitalization/deleveraging transactions implemented both through bankruptcy proceedings and though out-of-court exchanges, consent solicitations or other mechanisms, as well as in distressed mergers and acquisitions and capital markets activities. As part of these engagements, our FR business segment offers a wide range of advisory services to our clients, including: the structuring, negotiation, and confirmation of plans of reorganization; structuring and analysis of exchange offers; corporate viability assessment; dispute resolution and expert testimony; and procuring debtor-in-possession financing. Although atypical, a FR transaction can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to the Retainer Fees and/or Progress Fees.

FVA, formerly known as Financial Advisory Services, primarily provides valuations of various assets, including: companies; illiquid debt and equity securities; and intellectual property (among other assets and liabilities). These valuations are used for financial reporting, tax reporting, and other purposes. In addition, our FVA business segment renders fairness opinions in connection with mergers and acquisitions and other transactions, and solvency opinions in connection with corporate spin-offs and dividend recapitalizations, and other types of financial opinions in connection with other transactions. Also, our FVA business segment provides dispute resolution services to clients where fees are usually based on the hourly rates of our financial professionals. Unlike our CF or FR segments, the fees generated in our FVA segment are generally not contingent on the successful completion of a transaction.

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Operating Expenses

Our operating expenses are classified as employee compensation and benefits expense and non-compensation expense; revenue and headcount are the primary drivers of our operating expenses. Reimbursements of certain out-of-pocket deal expenses are recorded on a gross basis and are therefore included in both Revenues and Operating expenses on the Consolidated Statements of Comprehensive Income.

Employee Compensation and Benefits Expense. Our employee compensation and benefits expense, which accounts for the majority of our operating expenses, is determined by management based on fee revenues earned, headcount, the competitiveness of the prevailing labor market, and anticipated compensation expectations of our employees. These factors may fluctuate, and as a result, our employee compensation and benefits expense may fluctuate materially in any particular period. Accordingly, the amount of employee compensation and benefits expense recognized in any particular period may not be consistent with prior periods or indicative of future periods.

Our employee compensation and benefits expense consists of base salary, payroll taxes, benefits, annual incentive compensation payable as cash bonus awards, deferred cash bonus awards, and the amortization of equity-based bonus awards. Base salary and benefits are paid ratably throughout the year. Our annual equity-based bonus awards include fixed share compensation awards and fixed dollar awards as a component of the annual bonus awards for certain employees. These equity awards are generally subject to annual vesting requirements over a four-year period beginning at the date of grant, which occurs in the first quarter of each fiscal year; accordingly, expenses are amortized over the stated vesting period. In most circumstances, the unvested portion of these awards is subject to forfeiture should the employee depart from the Company. Cash bonuses, which are accrued monthly, are discretionary and dependent upon a number of factors including the Company's performance and are generally paid in the first fiscal quarter of each year with respect to prior year performance. Generally, a portion of the cash bonus is deferred and paid in the third quarter of the fiscal year in which the bonus is awarded. The ratio of employee compensation and benefits to revenues is referred to as the "Compensation Ratio."

Non-Compensation Expense. The balance of our operating expenses includes costs for travel, meals and entertainment, rent, depreciation and amortization, information technology and communications, professional fees, and other operating expenses. We refer to all of these expenses as non-compensation expenses. A portion of our non-compensation expenses fluctuates in response to changes in headcount.

Other (Income)/Expense, net

Other (income)/expense, net includes (i) interest income earned on non-marketable and investment securities, Cash and cash equivalents, loans receivable from affiliates, employee loans, and commercial paper, (ii) interest expense and fees on our 2015 Line of Credit or 2019 Line of Credit (each defined herein), (iii) interest expense on the loan payable to affiliate, Loans payable to former shareholders, and the Loan payable to non-affiliates, (iv) equity income and/or gains or losses from funds and partnership interests where we have more than a minor ownership interest or more than minor influence over operations but do not have a controlling interest and are not the primary beneficiary, and (v) gains associated with the reduction of earnout liabilities.

Results of Consolidated Operations

The following is a discussion of our results of operations for the three and nine months ended December 31, 2019 and 2018. For a more detailed discussion of the factors that affected the revenues and the operating expenses of our CF, FR, and FVA business segments in these periods, see Part I, Item 2 of this Form 10-Q under the heading “Business Segments” below.

	Three Months Ended December 31,								Nine Months Ended December 31,
($ in thousands)	2019			2018			Change		2019			2018			Change
Revenues	$	333,515		$	298,013		12	%	$	856,674		$	793,007		8	%
Operating expenses:
Employee compensation and benefits	213,107			187,180			14	%	551,056			501,682			10	%
Non-compensation	52,392			48,590			8	%	144,672			132,779			9	%
Total operating expenses	265,499			235,770			13	%	695,728			634,461			10	%
Operating income	68,016			62,243			9	%	160,946			158,546			2	%
Other (income)/expense, net	(1,039		)	(688		)	51	%	(3,787		)	(3,301		)	15	%
Income before provision for income taxes	69,055			62,931			10	%	164,733			161,847			2	%
Provision for income taxes	20,161			18,974			6	%	39,954			48,089			(17	)%
Net income attributable to Houlihan Lokey, Inc.	$	48,894		$	43,957		11	%	$	124,779		$	113,758		10	%

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Three Months Ended December 31, 2019 versus December 31, 2018

Revenues were $333.5 million for the three months ended December 31, 2019, compared with $298.0 million for the three months ended December 31, 2018, representing an increase of 12%. For the quarter, CF revenues increased 9%, FR revenues increased 24%, and FVA revenues increased 1% when compared with the three months ended December 31, 2018.

Operating expenses were $265.5 million for the three months ended December 31, 2019, compared with $235.8 million for the three months ended December 31, 2018, representing an increase of 13%. Employee compensation and benefits expense, as a component of operating expenses, was $213.1 million for the three months ended December 31, 2019, compared with $187.2 million for the three months ended December 31, 2018, an increase of 14%. The increase in employee compensation and benefits expense was primarily a result of an increase in revenues for the quarter when compared to the same quarter last year. The Compensation Ratio was 63.9% for the three months ended December 31, 2019, compared with 62.8% for the three months ended December 31, 2018. Non-compensation expense, as a component of operating expenses, was $52.4 million for the three months ended December 31, 2019, compared with $48.6 million for the three months ended December 31, 2018, an increase of 8%. The increase in non-compensation expense was primarily driven by an increase in Other operating expenses and Information technology and communication expenses.

Other (income)/expense, net increased 51% to $(1.0) million for the three months ended December 31, 2019, compared with $(0.7) million for the three months ended December 31, 2018, primarily due to higher interest (income) generated by our investment securities.

The provision for income taxes for the three months ended December 31, 2019 was $20.2 million, which reflected an effective tax rate of 29.2%. The provision for income taxes for the three months ended December 31, 2018 was $19.0 million which reflected an effective tax rate of 30.2%.

Nine Months Ended December 31, 2019 versus December 31, 2018

Revenues were $856.7 million for the nine months ended December 31, 2019, compared with $793.0 million for the nine months ended December 31, 2018, representing an increase of 8%. For the nine months ended December 31, 2019, CF revenues increased 6%, FR revenues increased 14%, and FVA revenues increased 4% when compared with the nine months ended December 31, 2018.

Operating expenses were $695.7 million for the nine months ended December 31, 2019, compared with $634.5 million for the nine months ended December 31, 2018, an increase of 10%. Employee compensation and benefits expense, as a component of operating expenses, was $551.1 million for the nine months ended December 31, 2019, compared with $501.7 million for the nine months ended December 31, 2018, an increase of 10%. The increase in employee compensation and benefits expense was primarily a result of higher revenues for the nine-month period when compared with the same period last year. The Compensation Ratio was 64.3% for the nine months ended December 31, 2019, compared with 63.3% for the nine months ended December 31, 2018. Non-compensation expense, as a component of operating expenses, was $144.7 million for the nine months ended December 31, 2019, compared with $132.8 million for the nine months ended December 31, 2018, an increase of 9%. The increase in non-compensation expense was primarily attributable to an increase in Rent expense, Other operating expenses, and Information technology and communications expense, partially offset by a reduction in Professional fees expense.

Other (income)/expense, net increased to $(3.8) million for the nine months ended December 31, 2019, compared with $(3.3) million for the nine months ended December 31, 2018, primarily due to slightly higher interest (income) generated by our investment securities, partially offset by a loss associated with Italy in the current year-to-date period compared to a gain recognized in the same period last year.

The provision for income taxes for the nine months ended December 31, 2019 was $40.0 million, which reflected an effective tax rate of 24.3%. The provision for income taxes for the nine months ended December 31, 2018 was $48.1 million, which reflected an effective tax rate of 29.7%. The decrease in the Company's tax rate during the nine months ended December 31, 2019 relative to the same period in 2018 was primarily a result of the vesting of stock that occurred in April and May 2019.

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Business Segments

The following table presents revenues, expenses and contributions from our continuing operations by business segment. The revenues by segment represent each segment’s revenues, and the profit by segment represents profit for each segment before corporate expenses, other (income)/expense, net, and income taxes.

	Three Months Ended December 31,								Nine Months Ended December 31,
($ in thousands)	2019			2018			Change		2019			2018			Change
Revenues by Segment
Corporate Finance	$	201,137		$	183,965		9	%	$	490,707		$	462,893		6	%
Financial Restructuring	92,808			75,013			24	%	249,438			218,173			14	%
Financial and Valuation Advisory	39,570			39,035			1	%	116,529			111,941			4	%
Revenues	$	333,515		$	298,013		12	%	$	856,674		$	793,007		8	%
Segment Profit (1)
Corporate Finance	$	58,495		$	62,388		(6	)%	$	138,611		$	146,287		(5	)%
Financial Restructuring	28,391			11,129			155	%	75,956			52,932			43	%
Financial and Valuation Advisory	7,163			6,302			14	%	24,384			20,386			20	%
Total Segment Profit	94,049			79,819			18	%	238,951			219,605			9	%
Corporate Expenses (2)	26,033			17,576			48	%	78,005			61,059			28	%
Other (income)/expense, net	(1,039		)	(688		)	51	%	(3,787		)	(3,301		)	15	%
Income Before Provision for Income Taxes	$	69,055		$	62,931		10	%	$	164,733		$	161,847		2	%
Segment Metrics
Number of Managing Directors
Corporate Finance	122			108			13	%	122			108			13	%
Financial Restructuring	45			44			2	%	45			44			2	%
Financial and Valuation Advisory	32			35			(9	)%	32			35			(9	)%
Number of Closed Transactions/Fee Events (3)
Corporate Finance	95			89			7	%	225			220			2	%
Financial Restructuring	28			21			33	%	70			54			30	%
Financial and Valuation Advisory	530			502			6	%	1,086			1,046			4	%

(1) We adjust the compensation expense for a business segment in situations where an employee residing in one business segment is performing work in another business segment where the revenues are accrued. Segment Profit may vary significantly between periods depending on the levels of collaboration among the different segments.

(2) Corporate expenses represent expenses that are not allocated to individual business segments such as office of the executives, accounting, information technology, compliance, legal, marketing, and human capital.

(3) Fee Events applicable to FVA only; a Fee Event includes any engagement that involves revenue activity during the measurement period with a revenue minimum of $1,000. References to closed transactions should be understood to be the same as transactions that are “effectively closed” as described in Note 3 of our Consolidated Financial Statements.

Corporate Finance

Three Months Ended December 31, 2019 versus December 31, 2018

Revenues for CF were $201.1 million for the three months ended December 31, 2019, compared with $184.0 million for the three months ended December 31, 2018, representing an increase of 9%. Revenues increased primarily due to an increase in the number of closed transactions and an increase in the average transaction fee on closed transactions when compared to the same quarter last year.

Segment profit for CF was $58.5 million for the three months ended December 31, 2019, compared with $62.4 million for the three months ended December 31, 2018. Profitability decreased primarily as a result of higher compensation expenses when compared to the same quarter last year.

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Nine Months Ended December 31, 2019 versus December 31, 2018

Revenues for CF were $490.7 million for the nine months ended December 31, 2019, compared with $462.9 million for the nine months ended December 31, 2018, representing an increase of 6%. Revenues increased primarily due to an increase in the number of closed transactions and an increase in the average transaction fee on closed transactions when compared to the same period last year.

Segment profit for CF was $138.6 million for the nine months ended December 31, 2019, compared with $146.3 million for the nine months ended December 31, 2018. Profitability decreased primarily as a result of higher compensation expenses as a percentage of Revenues when compared to the same period last year.

Financial Restructuring

Three Months Ended December 31, 2019 versus December 31, 2018

Revenues for FR were $92.8 million for the three months ended December 31, 2019, compared with $75.0 million for the three months ended December 31, 2018, representing an increase of 24%. Revenues increased primarily due to an increase in the number of closed transactions.

Segment profit for FR was $28.4 million for the three months ended December 31, 2019, compared with $11.1 million for the three months ended December 31, 2018, an increase of 155%. Profitability increased primarily as a result of lower compensation expenses as a percentage of Revenues when compared to the same quarter last year.

Nine Months Ended December 31, 2019 versus December 31, 2018

Revenues for FR were $249.4 million for the nine months ended December 31, 2019, compared with $218.2 million for the nine months ended December 31, 2018, representing an increase of 14%. The increase in Revenues was primarily a result of an increase in the number of closed transactions, partially offset by a reduction in the average transaction fee when compared to the same period last year.

Segment profit for FR was $76.0 million for the nine months ended December 31, 2019, compared with $52.9 million for the nine months ended December 31, 2018, an increase of 43%. Profitability increased primarily as a result of higher revenues and lower compensation expenses as a percentage of Revenues when compared to the same period last year.

Financial and Valuation Advisory

Three Months Ended December 31, 2019 versus December 31, 2018

Revenues for FVA were $39.6 million for the three months ended December 31, 2019, compared with $39.0 million for the three months ended December 31, 2018, representing an increase of 1%. Revenues increased primarily as a result of an increase in the number Fee Events when compared to the same quarter last year.

Segment profit for FVA was $7.2 million for the three months ended December 31, 2019, compared with $6.3 million for the three months ended December 31, 2018, an increase of 14%. Profitability increased primarily as a result of a reduction in non-compensation expenses when compared to the same quarter last year.

Nine Months Ended December 31, 2019 versus December 31, 2018

Revenues for FVA were $116.5 million for the nine months ended December 31, 2019, compared with $111.9 million for the nine months ended December 31, 2018, representing an increase of 4%. The increase in Revenues was primarily a result of a higher number of Fee Events when compared to the same period last year.

Segment profit for FVA was $24.4 million for the nine months ended December 31, 2019, compared with $20.4 million for the nine months ended December 31, 2018, an increase of 20%. Profitability increased primarily as a result of an increase in Revenues and a reduction in non-compensation expenses as a percentage of Revenues when compared to the same period last year.

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Corporate Expenses

Three Months Ended December 31, 2019 versus December 31, 2018

Corporate expenses were $26.0 million for the three months ended December 31, 2019, compared with $17.6 million for the three months ended December 31, 2018. This 48% increase was driven by increased compensation and non-compensation expenses when compared to the same quarter last year.

Nine Months Ended December 31, 2019 versus December 31, 2018

Corporate expenses were $78.0 million for the nine months ended December 31, 2019, compared with $61.1 million for the nine months ended December 31, 2018. This 28% increase was driven by increased compensation and non-compensation expenses when compared to the same period last year.

Liquidity and Capital Resources

Our current assets comprise cash and cash equivalents, investment securities, receivables from affiliates, accounts receivable, and unbilled work in process related to fees earned from providing advisory services. Our current liabilities include deferred income, accounts payable and accrued expenses, accrued salaries and bonuses, income taxes payable, and current portion of loan obligations.

Our cash and cash equivalents include cash held at banks. We maintain moderate levels of cash on hand in support of regulatory requirements for our registered broker-dealer. As of December 31, 2019, we had $135 million of cash in foreign subsidiaries. Our excess cash may be invested from time to time in short term investments, including treasury securities, commercial paper, certificates of deposit and investment grade corporate debt securities. Please refer to Note 6 for further detail.

During the quarter ended December 31, 2019, the Company repaid a portion of the principal balance of the Loan payable to non-affiliates. As of December 31, 2019, the remaining principal balance of the Loan payable to non-affiliate was $3.3 million, which included foreign currency translation adjustments and interest expense. See Note 1 and Note 10 for additional information.

As of December 31, 2019 and March 31, 2019, our Restricted cash, Cash and cash equivalents, and Investment securities were as follows:

(In thousands)	December 31, 2019		March 31, 2019
Cash and cash equivalents	$	276,735	$	285,746
Investment securities	91,195		125,258
Total unrestricted cash and cash equivalents, including investment securities	367,930		411,004
Restricted cash (1)	373		369
Total cash, cash equivalents, and restricted cash, including investment securities	$	368,303	$	411,373

(1) Represents a deposit in support of a letter of credit issued for our Frankfurt office.

Our liquidity is highly dependent upon cash receipts from clients which in turn are generally dependent upon the successful completion of transactions as well as the timing of receivables collections, which typically occur within 60 days of billing. As of December 31, 2019, Accounts receivable, net of doubtful accounts was $62.4 million. As of December 31, 2019, Unbilled work in process, net of doubtful accounts was $68.0 million.

Our previously active revolving line of credit pursuant to the loan agreement, dated as of August 18, 2015, by and among Houlihan Lokey, certain domestic subsidiaries of Houlihan Lokey party thereto and Bank of America, N.A., amended July 28, 2017 and August 15, 2019 (the "2015 Line of Credit"), which provided a revolving line of credit of $75.0 million, was refinanced and replaced with the 2019 Line of Credit (as defined below).

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On August 23, 2019, the Company entered into a new syndicated revolving line of credit with the Bank of America, N.A. and certain other financial institutions party thereto, which allows for borrowings of up to $100.0 million (and, subject to certain conditions, provides the Company with an expansion option, which, if exercised in full, would provide for a total credit facility of $200 million) and matures on August 23, 2022 (the "2019 Line of Credit"). As of December 31, 2019, no principal was outstanding under the 2019 Line of Credit. The agreement governing this facility provides that borrowings bear interest at an annual rate of LIBOR plus 1.00%, commitment fees apply to unused amounts, and contains debt covenants which require that the Company maintain certain financial ratios. Borrowings under the 2019 Line of Credit require payments of interest at the annual rate of LIBOR plus 1.00%. The loan agreement requires compliance with certain loan covenants including but not limited to the maintenance of minimum consolidated earnings before interest, taxes, depreciation and amortization of no less than $150 million as of the end of any quarterly 12-month period and certain leverage ratios including a consolidated leverage ratio of less than 2.00 to 1.00. As of December 31, 2019, we were, and expect to continue to be, in compliance with such covenants.

Cash Flows

Our operating cash flows are primarily influenced by the amount and timing of receipt of advisory fees and the payment of operating expenses, including payments of incentive compensation to our employees. We pay a significant portion of our incentive compensation during the first and third quarters of each fiscal year. A summary of our operating, investing, and financing cash flows is as follows:

	Nine Months Ended December 31,
(In thousands)	2019			2018			Change
Cash provided by (used in)
Operating activities:
Net income	$	124,779		$	113,758		10	%
Non-cash charges	62,147			50,201			24	%
Other operating activities	(76,168		)	(71,896		)	6	%
Total operating activities	110,758			92,063			20	%
Investing activities	14,908			94,137			(84	)%
Financing activities	(131,264		)	(218,892		)	(40	)%
Effects of exchange rate changes on cash, cash equivalents, and restricted cash	(3,409		)	(10,762		)	(68	)%
(Decrease) in cash, cash equivalents, and restricted cash	(9,007		)	(43,454		)	(79	)%
Cash, cash equivalents, and restricted cash—beginning of period	286,115			300,223			(5	)%
Cash, cash equivalents, and restricted cash—end of period	$	277,108		$	256,769		8	%

Nine Months Ended December 31, 2019

Operating activities resulted in a net inflow of $110.8 million primarily attributable to strong performance across the Company, offset by reduced cash from other operating activities. Investing activities resulted in a net inflow of $14.9 million primarily attributable to sales or maturities of investment securities, partially offset by purchases of investment securities. Financing activities resulted in a net outflow of $131.3 million primarily related to dividends paid and share repurchases.

Nine Months Ended December 31, 2018

Operating activities resulted in a net inflow of $92.1 million primarily attributable to strong performance across the Company, offset by reduced cash from other operating activities. Investing activities resulted in a net inflow of $94.1 million primarily attributable to the maturity of investment securities, partially offset by net cash outflows for business acquisitions. Financing activities resulted in a net outflow of $218.9 million primarily related to dividends paid, share repurchases, and the settlement of the January 2018 Forward Share Purchase Agreement.

Contractual Obligations

There have been no material changes outside of the ordinary course of business to our known contractual obligations, which are set forth in the table included in Item 7 in our 2019 Annual Report.

Off‑Balance Sheet Arrangements

We do not invest in any off-balance sheet vehicles that provide liquidity, capital resources, market or credit risk support, or engage in any activities that expose us to any liability that is not reflected in our consolidated financial statements except for certain stand-by letters of credit and bank guarantees in support of various office leases totaling approximately $0.6 million.

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Critical Accounting Policies and Estimates

The preparation of consolidated financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period for which they are determined to be necessary.

There have been no material changes to the critical accounting policies disclosed in our 2019 Annual Report. For additional information on critical accounting policies and estimates, see “Critical Accounting Policies and Estimates” in the MD&A of the 2019 Annual Report.

Recent Accounting Developments

In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update No. 2016-02, Leases (Topic 842). We adopted the standard effective April 1, 2019, using the modified retrospective approach applied as of the beginning of the period of adoption. As of December 31, 2019, the Company's Operating lease right-of-use assets and Operating lease liabilities were $129.4 million and $150.2 million, respectively. The difference between the Operating lease right-of-use assets and Operating lease liabilities primarily relates to previously recorded deferred rent within Accounts payable and accrued expenses, which was effectively reclassified to the Operating lease right-of-use assets upon adoption.

For additional discussion of recently issued accounting developments and their impact or potential impact on our consolidated financial statements, see "Note 2—Summary of Significant Accounting Policies" to our unaudited consolidated financial statements in this Form 10-Q.

Item 3.    Quantitative and Qualitative Disclosures about Market Risk

Market Risk and Credit Risk

Our business is not capital intensive and we generally do not issue debt or invest in derivative instruments. As a result, we are not subject to significant market risk (including interest rate risk) or credit risk (except in relation to receivables). We maintain our cash and cash equivalents with financial institutions with high credit ratings. Although these deposits are generally not insured, management believes we are not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held.

Our cash and cash equivalents are denominated primarily in U.S. dollars, pound sterling and euros, and we face foreign currency risk in our cash balances and other assets and liabilities held in accounts outside the U.S. due to potential currency movements and the associated foreign currency translation accounting requirements.

Risks Related to Cash and Short Term Investments

Our cash is maintained in U.S. and non-U.S. bank accounts. We have exposure to foreign exchange risks through all of our international affiliates. However, we believe our cash is not subject to any material interest rate risk, equity price risk, credit risk or other market risk. Consistent with our past practice, we expect to maintain our cash in bank accounts or highly liquid securities.

Exchange Rate Risk

The exchange rate of the U.S. dollar relative to the currencies in the non-U.S. countries in which we operate may have an effect on the reported value of our non-U.S. dollar denominated or based assets and liabilities and, therefore, be reflected as a change in other comprehensive income. Our non-U.S. assets and liabilities that are sensitive to exchange rates consist primarily of trade payables and receivables, work in progress, and cash. The net impact of the fluctuation of foreign currencies in other comprehensive income within the Consolidated Statements of Comprehensive Income was $14,388 and $(2,760) during the three months ended December 31, 2019 and 2018, respectively, and $977 and $(19,038) during the nine months ended December 31, 2019 and 2018, respectively.

In addition, the reported amounts of our revenues and expenses may be affected by movements in the rate of exchange between the currencies in the non-U.S. countries in which we operate and the U.S. dollar, affecting our operating results. We have analyzed our potential exposure to changes in the value of the U.S. dollar relative to the pound sterling and euro, the primary currencies of our European operations, by performing a sensitivity analysis on our net income, and determined that while our earnings are subject to fluctuations from changes in foreign currency rates, at this time we do not believe we face any material risk in this respect.

33

From time to time, we enter into transactions to hedge our exposure to certain foreign currency fluctuations through the use of derivative instruments or other methods. As of December 31, 2019, we had two foreign currency forward contracts outstanding, one between the pound sterling and the U.S. dollar with a notional value of $5.0 million and one between the pound sterling and the euro with a notional value of €1.0 million. The fair value of these contracts represented a net gain included in Other operating expenses of $30 during the three months ended December 31, 2019. We had no foreign currency forward contracts outstanding as of December 31, 2018.

In summary, we have been impacted by changes in exchange rates and the potential impact of future currency fluctuation will increase as our international expansion continues. The magnitude of this impact will depend on the timing and volume of revenues and expenses of, and the amounts of assets and liabilities in, our foreign subsidiaries along with the timing of changes in the relative value of the U.S. dollar to the currencies of the non-U.S. countries in which we operate.

Credit Risk

We regularly review our accounts receivable and allowance for doubtful accounts by considering factors such as historical experience, credit quality, age of the accounts receivable and recoverable expense balances, and the current economic conditions that may affect a customer’s ability to pay such amounts owed to us. We maintain an allowance for doubtful accounts that, in our opinion, provides for an adequate reserve to cover losses that may be incurred.

Item 4.    Controls and Procedures

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management, including the chief executive officer and chief financial officer, recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2019.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified in connection with the evaluation of our internal control over financial reporting performed during the fiscal quarter ended December 31, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

34

PART II. OTHER INFORMATION

Item 1.    Legal Proceedings

From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. There has been no material change in the nature of our legal proceedings from the descriptions contained in our 2019 Annual Report.

Item 1A.    Risk Factors

There have been no material changes to the risk factors disclosed in our 2019 Annual Report.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

On December 20, 2019, the Company issued 34,694 shares of Class B common stock to certain former employees of a business acquired in 2015. The Company relied upon the exemption from registration provided by Section 4(a)(2) under the Securities Act of 1933, as amended, for transactions not involving a public offering and received no proceeds in connection with this issuance.

During the quarter ended December 31, 2019, the Company issued 2,100,523 shares of Class A common stock upon the conversion of a like number of shares of Class B common stock. Each share of Class B common stock may be converted into one share of Class A common stock at the option of its holder. See Note 15 for additional information. The Company relied upon the exemption from registration provided by Section 3(a)(9) under the Securities Act of 1933, as amended.

Purchases of Equity Securities

The following table summarizes all of the repurchases of Houlihan Lokey, Inc. equity securities during the quarter ended December 31, 2019:

Period	Total Number of Shares Purchased	Average Price Paid Per  Share		Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1)
October 1, 2019 - October 31, 2019	82,956	$	43.48	82,956
November 1, 2019 - November 30, 2019 (2)	5,302	47.09		5,302
December 1, 2019 - December 31, 2019 (3)	11,048	48.01		11,048
Total	99,306	$	44.18	99,306	$	37,240,777

(1) In July 2018, the board of directors authorized the repurchase of up to an additional $100 million of the Company's common stock (incremental to the $50 million repurchase program that was approved by our board in February 2017). The shares of Class A common stock repurchased through this program have been retired.

(2) Includes 302 unvested shares of Class B common stock at an average price per share of $48.57, which were withheld from employees to satisfy tax withholding obligations resulting from the vesting of certain restricted stock awards.

(3) Includes 1,048 unvested shares of Class B common stock at an average price per share of $48.20, which were withheld from employees to satisfy tax withholding obligations resulting from the vesting of certain restricted stock awards.

Item 3.    Defaults upon Senior Securities

None.

Item 4.    Mine Safety Disclosures

Not applicable.

Item 5.    Other Information

None.

35

Item 6.    Exhibits

		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed / Furnished Herewith
3.1	Amended and Restated Certificate of Incorporation of Houlihan Lokey, Inc., dated August 18, 2015.	8-K	333-205610	3.1	8/21/15
3.2	Amended and Restated Bylaws of the Company, dated August 18, 2015.	8-K	333-205610	3.2	8/21/15
31.1	Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer.					*
31.2	Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer.					*
32.1	Section 1350 Certification of Chief Executive Officer.					**
32.2	Section 1350 Certification of Chief Financial Officer.					**
101.INS	Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.					*
101.SCH	Inline XBRL Taxonomy Extension Schema Document.					*
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.					*
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.					*
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.					*
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.					*
104.1	Cover Page Interactive Data File - The cover page interactive data file does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.					*

*	Filed herewith.
**	Furnished herewith.

36

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		HOULIHAN LOKEY, INC.
Date:	February 6, 2020	/s/ SCOTT L. BEISER
		Scott L. Beiser
		Chief Executive Officer
		(Principal Executive Officer)
Date:	February 6, 2020	/s/ J. LINDSEY ALLEY
		J. Lindsey Alley
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Scott L. Beiser, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ending December 31, 2019 of Houlihan Lokey, Inc. as filed with the Securities and Exchange Commission on the date hereof;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 6, 2020	/s/ SCOTT L. BEISER
		Scott L. Beiser
		Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, J. Lindsey Alley, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ending December 31, 2019 of Houlihan Lokey, Inc. as filed with the Securities and Exchange Commission on the date hereof;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 6, 2020	/s/ J. LINDSEY ALLEY
		J. Lindsey Alley
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Scott L. Beiser, Chief Executive Officer and Director of Houlihan Lokey, Inc. (the “Company”), hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Quarterly Report on Form 10-Q of the Company for the period ended December 31, 2019 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	February 6, 2020	/s/ SCOTT L. BEISER
		Scott L. Beiser
		Chief Executive Officer
		(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, J. Lindsey Alley, Chief Financial Officer of Houlihan Lokey, Inc. (the “Company”), hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Quarterly Report on Form 10-Q of the Company for the period ended December 31, 2019 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	February 6, 2020	/s/ J. LINDSEY ALLEY
		J. Lindsey Alley
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

XML

INVESTMENT SECURITIES - Schedule of Maturities of Debt Securities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Mar. 31, 2019
Debt Securities, Held-to-maturity, Maturity [Abstract]
Amortized Cost , due within one year	$ 63,760	$ 96,109
Estimated Fair Value, due within one year	63,840	96,175
Amortized Cost, Due within one year through five years	26,823	28,719
Estimated Fair Value, Due within one year through five years	27,355	29,083
Amortized Cost	90,583	124,828
Estimated Fair Value	$ 91,195	$ 125,258

XML

BACKGROUND (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2019 USD ($) segment	Dec. 31, 2018 USD ($)	Nov. 30, 2015
Class of Stock [Line Items]
Number of business segments | segment			3
IPO | Accrual of deferred cash payments
Class of Stock [Line Items]
Compensation expense, period for recognition			4 years 6 months
Compensation expense associated with the accrual of certain deferred cash payments granted in connection with the IPO	$ 2,509	$ 2,510	$ 7,534	$ 7,916
IPO | Restricted Stock
Class of Stock [Line Items]
Compensation expense associated with the amortization of restricted stock granted in connection with the IPO	$ 3,684	$ 3,629	$ 10,735	$ 10,500
Compensation expense, period for recognition			4 years 6 months
Italy | Leonardo & CO. NV
Class of Stock [Line Items]
Investment interest in Italy (as a percent)	51.00%		51.00%		49.00%

XML

REVENUE RECOGNITION - Summary of Receivables, Contract Assets, and Contract Liabilities (Details) - USD ($) $ in Thousands	9 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Receivables
Beginning balance	$ 64,797
Increase/(Decrease)	(9,327)
Ending balance	55,470
Unbilled work in process, net of allowance for doubtful accounts
Beginning balance	71,891
Increase/(Decrease)	(3,934)	$ 15,201
Ending balance	67,957
Contract Assets
Beginning balance	6,033
Increase/(Decrease)	909
Ending balance	6,942
Contract Liabilities
Beginning balance	27,812
Increase/(Decrease)	84
Ending balance	$ 27,896

XML

LEASES - Weighted Average Details (Details)	Dec. 31, 2019
Leases [Abstract]
Weighted-average remaining lease term (years)	9 years
Weighted-average discount rate	4.10%

XML

STOCKHOLDERS' EQUITY (Details)							3 Months Ended		9 Months Ended
	Aug. 01, 2019 USD ($) $ / shares shares	May 30, 2019 $ / shares shares	Jun. 04, 2018 $ / shares shares	Apr. 05, 2018 shares	Mar. 12, 2018 $ / shares shares	Aug. 19, 2015 class_of_stock	Dec. 31, 2019 USD ($) $ / shares shares	Dec. 31, 2018 USD ($) $ / shares shares	Dec. 31, 2019 USD ($) $ / shares shares	Dec. 31, 2018 USD ($) $ / shares shares	Sep. 30, 2019 shares	Mar. 31, 2019 shares	Sep. 30, 2018 shares	Jul. 31, 2018 USD ($)	Mar. 31, 2018 shares	Feb. 28, 2017 USD ($)	Aug. 18, 2015 vote
Class of Stock [Line Items]
Number of classes of common stock | class_of_stock						2
Conversion ratio of common stock							1		1								1
Weighted average price per share (in dollars per share) | $ / shares							$ 44,120	$ 40,330	$ 43.98	$ 46.71
Dividends outstanding | $							$ 7,719,000	$ 7,034,000	$ 7,719,000	$ 7,034,000
Authorized amount to be repurchased | $														$ 100,000,000		$ 50,000,000.0
Class A
Class of Stock [Line Items]
Common stock voting rights, number of votes per share | vote																	1
Shares issued of common stock (in shares)							41,817,614		41,817,614			38,200,802
Outstanding common stock repurchased and retired (in shares)							97,956,000	370,728,000	632,353,000	1,480,869,000
Shares issued to non-employee directors (in shares)					2,000,000
Weighted average price per share (in dollars per share) | $ / shares			$ 49.11
Conversion of Class B to Class A shares (in shares)										2,020,474,000
Number of common shares outstanding (in shares)							41,817,614		41,817,614			38,200,802
Shares repurchased and retired, value | $							$ 4,322,000	$ 14,952,000	$ 27,809,000	$ 69,169,000
Class A | Common stock
Class of Stock [Line Items]
Shares issued to non-employee directors (in shares)							2,118	2,358	9,145,000	6,570,000
Conversion of Class B to Class A shares (in shares)									5,992,399,000
Number of common shares outstanding (in shares)							43,569,993	34,510,793	43,569,993	34,510,793	41,817,614	38,200,802,000	34,696,005		30,604,405,000
Class B
Class of Stock [Line Items]
Common stock voting rights, number of votes per share | vote																	10
Shares issued of common stock (in shares)							24,079,076		24,079,076			27,197,734
Outstanding common stock repurchased and retired (in shares)							1,350,000	53,000	610,943,000	133,000
Number of common shares outstanding (in shares)							24,079,076		24,079,076			27,197,734
Shares repurchased and retired, value | $							$ 65,000	$ 2,000	$ 29,349,000	$ 6,000
Class B | Common stock
Class of Stock [Line Items]
Outstanding common stock repurchased and retired (in shares)										2,000,000,000
Number of common shares outstanding (in shares)								30,911,808		30,911,808	24,079,076	27,197,734,000	31,063,445		37,187,932,000
Shares repurchased and retired, value | $										$ 2,000
ORIX USA Corporation | Class A
Class of Stock [Line Items]
Shares issued to non-employee directors (in shares)	3,377,935,000	3,000,000
Price to the public (in dollars per share) | $ / shares	$ 45.62	$ 45.80
Shares repurchased from single employee (in shares)			697,000
Proceeds from sale of stock | $	$ 154,100,000
ORIX USA Corporation | Class B
Class of Stock [Line Items]
Outstanding common stock repurchased and retired (in shares)				2,000,000,000
Investor | Class A
Class of Stock [Line Items]
Shares issued of common stock (in shares)							43,533,269,000		43,533,269,000
Director | Class A
Class of Stock [Line Items]
Shares issued to non-employee directors (in shares)									9,145,000	6,570,000
HL Holders | Class B
Class of Stock [Line Items]
Number of common shares outstanding (in shares)							21,998,937		21,998,937
Follow-on Offering | Class A
Class of Stock [Line Items]
Shares issued of common stock (in shares)					2,000,000,000
Sale of stock, price per share (in dollars per share) | $ / shares					$ 47.25
Price to the public (in dollars per share) | $ / shares			$ 49.15
Follow-on Offering | ORIX USA Corporation | Class A
Class of Stock [Line Items]
Shares issued to non-employee directors (in shares)			1,985,983
Affiliated Entity | Follow-on Offering | Class A
Class of Stock [Line Items]
Shares issued of common stock (in shares)					2,000,000,000
Shares issued to non-employee directors (in shares)			1,014,017
Forward Contracts | Forward Purchase Agreement
Class of Stock [Line Items]
Shares excluded from computation of earnings per share										2,000,000,000
Director
Class of Stock [Line Items]
Shares issued of common stock (in shares)							36,724,000		36,724,000

XML

SUBSEQUENT EVENTS

9 Months Ended

Dec. 31, 2019

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

— Subsequent Events

On January 23, 2020, the Company's board of directors declared a quarterly cash dividend of $0.31 per share of Class A and Class B common stock, payable on March 16, 2020, to shareholders of record on March 5, 2020.

XML

STOCKHOLDERS' EQUITY

9 Months Ended

Dec. 31, 2019

Equity [Abstract]

STOCKHOLDERS' EQUITY

Stockholders' Equity

There are two classes of authorized HL, Inc. common stock: Class A common stock and Class B common stock. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion rights. Each share of Class A common stock is entitled to one vote per share, and each share of Class B common stock is entitled to ten votes per share. Each share of Class B common stock may be converted into one share of Class A common stock at the option of its holder and will be automatically converted into one share of Class A common stock upon transfer thereof, subject to certain exceptions.

As described in Note 4 above, in the March 2018 Follow-on Offering we issued and sold 2,000,000 shares of our Class A common stock and certain of our former and current employees and members of our management sold 2,000,000 shares of our Class A common stock, in each case, at a price to the public of $47.25 per share.

In connection with, and prior to, the March 2018 Follow-on Offering, on January 26, 2018, we entered into the January 2018 Forward Share Purchase Agreement, pursuant to which we agreed to purchase from ORIX USA on April 5, 2018 the number of shares of our Class B common stock equal to the number of shares of our Class A common stock sold by us in the March 2018 Follow-on Offering for a purchase price per share equal to the public offering price in the March 2018 Follow-on Offering less underwriting discounts and commissions. The cash proceeds from the March 2018 Follow-on Offering that were used to consummate the purchase pursuant to the January 2018 Forward Share Purchase Agreement were held in an escrow account as of March 31, 2018 and presented as restricted cash as discussed in Note 2. On April 5, 2018, we settled the transaction provided for in the January 2018 Forward Share Purchase Agreement and acquired 2,000,000 shares of Class B common stock from ORIX USA using the net proceeds we received from the March 2018 Follow-on Offering. As the January 2018 Forward Share Purchase Agreement required physical settlement by purchase of a fixed number of shares in exchange for cash, the 2,000,000 shares that were purchased were excluded from the Company's calculation of basic and diluted earnings per share in the Company's financial statements for the year ended March 31, 2018. In addition, as the agreement provided for the refund of any dividends paid during the term on the underlying Class A common stock, such shares were not classified as participating securities and the Company did not apply the two-class method for calculating its earnings per share.

As described in Note 4 above, in the June 2018 Follow-on Offering, ORIX USA sold 1,985,983 shares of our Class A common stock and certain of our former and current employees and members of our management sold 1,014,017 shares, in each case, at a price to the public of $49.15 per share. Concurrently with the closing of the offering, the Company repurchased from ORIX USA 697,000 shares of Class A common stock at a price per share of $49.11.

On May 30, 2019, pursuant to a registered underwritten public offering, ORIX USA sold 3,000,000 shares of our Class A common stock to the public at a price of $45.80.

On August 1, 2019, pursuant to a registered underwritten public offering, ORIX USA sold its remaining ownership of 3,377,935 shares of our Class A common stock to the public at a price of $45.62.

Class A common stock

During the nine months ended December 31, 2019, 9,145 shares were issued to non-employee directors, and 5,992,399 shares were converted from Class B to Class A. During the nine months ended December 31, 2018, 6,570 shares were issued to non-employee directors, and 2,020,474 shares were converted from Class B to Class A. As of December 31, 2019, there were 43,533,269 Class A shares held by the public and 36,724 Class A shares held by non-employee directors.

Class B common stock

Each share of Class B common stock may be converted into one share of Class A common stock at the option of its holder and will be automatically converted into one share of Class A common stock upon transfer thereof, subject to certain exceptions. As of December 31, 2019, there were 21,998,937 Class B shares held by the HL Voting Trust.

Dividends

Previously declared dividends related to unvested shares of $7,719 and $7,034 were unpaid as of December 31, 2019 and 2018, respectively.

Stock subscriptions receivable

Employees of the Company periodically issued notes receivable to the Company documenting loans made by the Company to such employees for the purchase of restricted shares of the Company.

Share repurchases

In February 2017, the board of directors authorized the repurchase of up to $50.0 million of the Company's Class A common stock. In May 2017, the Company entered into a stock buyback program with a third-party financial institution to purchase shares of common stock. In July 2018, the board of directors authorized the repurchase of up to an additional $100 million of the Company's common stock.

During the three months ended December 31, 2019 and 2018, the Company repurchased 1,350 and 53 shares, respectively, of Class B common stock, to satisfy $65 and $2 of required withholding taxes in connection with the vesting of restricted awards, respectively. During the three months ended December 31, 2019 and 2018, the Company repurchased an additional 97,956 and 370,728 shares of its outstanding common stock, respectively, at a weighted average price of $44.12 and $40.33 per share, excluding commissions, for an aggregate purchase price of $4,322 and $14,952, respectively.

During the nine months ended December 31, 2019 and 2018, the Company repurchased 610,943 and 133 shares, respectively, of Class B common stock, to satisfy $29,349 and $6 of required withholding taxes in connection with the vesting of restricted awards, respectively. During the nine months ended December 31, 2019 and 2018, the Company repurchased an additional 632,353 and 1,480,869 shares of its outstanding common stock, respectively, at a weighted average price of $43.98 and $46.71 per share, excluding commissions, for an aggregate purchase price of $27,809 and $69,169, respectively.

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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Schedule of Information About Other Financial Assets

The following table presents information about the Company's financial assets, and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair values:

	December 31, 2019
	Level 1		Level 2		Level 3		Total
Corporate debt securities	$	—	$	36,973	$	—	$	36,973
U.S. treasury securities	—		54,222		—		54,222
Total asset measured at fair value	$	—	$	91,195	$	—	$	91,195

	March 31, 2019
	Level 1		Level 2		Level 3		Total
Corporate debt securities	$	—	$	116,577	$	—	$	116,577
U.S. treasury securities	—		8,681		—		8,681
Total asset measured at fair value	$	—	$	125,258	$	—	$	125,258

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ACCUMULATED OTHER COMPREHENSIVE (LOSS)

9 Months Ended

Dec. 31, 2019

Equity [Abstract]

ACCUMULATED OTHER COMPREHENSIVE (LOSS)

Accumulated Other Comprehensive (Loss)

Accumulated other comprehensive (loss) is comprised of Foreign currency translation adjustments of $14,388 and $(2,760) for the three months ended December 31, 2019 and 2018, respectively, and $977 and $(19,038) for the nine months ended December 31, 2019 and 2018, respectively. The change in foreign currency translation was impacted by the vote in the U.K. to withdraw from the European Union. We are currently in a period in which the terms of withdrawal are being negotiated and there may be impacts on our European business that are unknown at this time. We believe the change in foreign currency translation will become more volatile, but we do not expect this to have a material impact on our operating results and financial position.

Accumulated other comprehensive (loss) at December 31, 2019 was comprised of the following:

Balance, April 1, 2019	$	(30,294	)
Foreign currency translation adjustment	977
Balance, December 31, 2019	$	(29,317	)

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ALLOWANCE FOR DOUBTFUL ACCOUNTS

9 Months Ended

Dec. 31, 2019

Receivables [Abstract]

ALLOWANCE FOR DOUBTFUL ACCOUNTS

Allowance for Doubtful Accounts

The allowance for doubtful accounts on receivables reflects management’s best estimate of probable inherent losses determined principally on the basis of historical experience and review of uncollected revenues and is recorded through provision for bad debts which is included in Other operating expenses in the accompanying Consolidated Statements of Comprehensive Income. Amounts deemed to be uncollectible are written off against the allowance for doubtful accounts.

	Three Months Ended December 31,						Nine Months Ended December 31,
	2019			2018			2019			2018
Beginning balance	$	5,375		$	11,501		$	5,596		$	11,391
Provision for bad debts	2,215			370			2,087			983
Recovery or write-off of uncollectible accounts	(2,020		)	(5,232		)	(2,113		)	(5,735		)
Ending balance	$	5,570		$	6,639		$	5,570		$	6,639

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LEASES (Tables)

9 Months Ended

Dec. 31, 2019

Leases [Abstract]

Lessee, Operating Lease, Liability, Maturity

The following table outlines the maturity of our existing operating lease liabilities on a fiscal year-end basis as of December 31, 2019.

	Operating Leases
Remaining 2020	$	7,928
2021	27,990
2022	23,595
2023	19,587
2024	14,787
Thereafter	87,024
Total	180,911
Less: present value discount	(30,754		)
Operating lease liabilities	$	150,157

Lease, Cost

Lease costs

	Three Months Ended December 31, 2019			Nine Months Ended December 31, 2019
Operating lease expense	$	6,466		$	21,729
Variable lease expense (1)	2,999			12,675
Short-term lease expense	114			195
Less: Sublease income	(48		)	(145		)
Total lease costs	$	9,531		$	34,454

^{(1)  Primarily consists of payments for property taxes, common area maintenance and usage based operating costs.}  

Weighted-average details

	December 31, 2019
Weighted-average remaining lease term (years)	9
Weighted-average discount rate	4.1	%

Supplemental cash flow information related to leases:

	Nine Months Ended December 31, 2019
Operating cash flows:
Cash paid for amounts included in the measurement of Operating lease liabilities	$	17,970
Non-cash activity:
Change in operating right-of-use assets due to remeasurement	$	5,883

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Label	Element	Value
Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ (1,000)
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	(19,681,000)
Parent [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	(19,681,000)
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ (1,000)

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INVESTMENT SECURITIES (Tables)

9 Months Ended

Dec. 31, 2019

Investments, Debt and Equity Securities [Abstract]

Schedule of Amortized Cost, Gross Unrealized Gains and Losses, and Fair Value of Securities

The amortized cost, gross unrealized gains (losses), and fair value of investment securities were as follows:

	December 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
Corporate debt securities	$	36,624	$	352	$	(3	)	$	36,973
U.S. treasury securities	53,959		264		(1		)	54,222
Total securities with unrealized gains	$	90,583	$	616	$	(4	)	$	91,195

	March 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
Corporate debt securities	$	116,220	$	372	$	(15	)	$	116,577
U.S. treasury securities	8,608		73		—			8,681
Total securities with unrealized gains	$	124,828	$	445	$	(15	)	$	125,258

Schedule of Maturities of Debt Securities

Scheduled maturities of the debt securities held by the Company within the investment securities portfolio were as follows:

	December 31, 2019				March 31, 2019
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due within one year	$	63,760	$	63,840	$	96,109	$	96,175
Due within years two through five	26,823		27,355		28,719		29,083
Total debt within the investment securities portfolio	$	90,583	$	91,195	$	124,828	$	125,258

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LOANS PAYABLE LOANS PAYABLE (Tables)

9 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Scheduled Aggregate Repayments of Loan Payable to Affiliate

The scheduled aggregate repayments of our Loans payable to former shareholders, Other liabilities, and the Loan payable to non-affiliates in the accompanying Consolidated Balance Sheets on a fiscal year-end basis as of December 31, 2019 are as follows:

Remaining 2020	$	1,123
2021	6,219
2022	1,760
2023	17,816
2024	338
2025 and thereafter	13,639
Total	$	40,895

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Cash flows from operating activities:
Net income	$ 124,779	$ 113,758
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income taxes	(9,283)	(5,407)
Provision for bad debts	72	983
Unrealized gains on investment securities	(182)	(16)
Non-cash lease expense	11,469	0
Depreciation and amortization	12,280	10,809
Contingent consideration valuation	0	(708)
Compensation expenses – restricted share grants (Note 14)	47,791	44,540
Changes in operating assets and liabilities:
Accounts receivable	9,815	27,824
Unbilled work in process	4,287
Unbilled work in process	(3,934)	15,201
Other assets	(4,152)	(11,284)
Accrued salaries and bonuses	(85,018)	(93,206)
Accounts payable and accrued expenses and other	3,245	3,155
Deferred income	58	(6,910)
Income taxes payable	(4,403)	(6,676)
Net cash provided by operating activities	110,758	92,063
Cash flows from investing activities:
Purchases of investment securities	(248,176)	(48,946)
Sales or maturities of investment securities	282,422	217,321
Acquisition of business, net of cash acquired	(2,197)	(71,407)
Receivables from affiliates	(170)	1,705
Purchase of property and equipment, net	(16,971)	(4,536)
Net cash provided by investing activities	14,908	94,137
Cash flows from financing activities:
Dividends paid	(61,104)	(50,284)
Settlement of forward purchase contract	0	(93,500)
Other share repurchases	(27,828)	(69,196)
Payments to settle employee tax obligations on share-based awards	(31,469)	(1,947)
Earnouts paid	0	(1,923)
Loans payable to former shareholders redeemed	(446)	(694)
Repayments of loans to non-affiliates	(10,786)	(1,535)
Other financing activities	369	187
Net cash (used in) financing activities	(131,264)	(218,892)
Effects of exchange rate changes on cash, cash equivalents, and restricted cash	(3,409)	(10,762)
(Decrease) in cash, cash equivalents, and restricted cash	(9,007)	(43,454)
Cash, cash equivalents, and restricted cash – beginning of period	286,115	300,223
Cash, cash equivalents, and restricted cash – end of period	277,108	256,769
Supplemental disclosures of non-cash activities:
Shares issued via vesting of liability classified awards	6,453	4,955
Fully amortized intangibles written off	0	8,272
Cash acquired through acquisitions	15,755	16,141
Cash paid during the period:
Interest	657	706
Taxes	$ 53,977	$ 64,893

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LOANS PAYABLE - Schedule of Loan Repayments (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Debt Disclosure [Abstract]
Remaining 2020	$ 1,123
2021	6,219
2022	1,760
2023	17,816
2024	338
2025 and thereafter	13,639
Total	$ 40,895

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GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands	167 Months Ended
	Dec. 31, 2019	Mar. 31, 2019	Jan. 31, 2006
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 626,519	$ 594,812	$ 392,600
Tradename-Houlihan Lokey	192,210	192,210
Other intangible assets	18,217	18,614
Total cost	836,946	805,636
Less: accumulated amortization	(14,214)	(11,032)
Goodwill and other intangibles, net	822,732	794,604	$ 192,210
Deferred tax liability	(51,676)	(51,676)
Total net book value, after taxes	771,056	$ 742,928
Goodwill acquired during period	$ 233,919

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2019	Mar. 31, 2019
Assets
Cash and cash equivalents	$ 276,735	$ 285,746
Restricted cash	373	369
Investment securities	91,195	125,258
Accounts receivable, net of allowance for doubtful accounts of $4,854 and $4,255, respectively	62,412	70,830
Unbilled work in process, net of allowance for doubtful accounts of $716 and $1,341, respectively	67,957	71,891
Receivable from affiliates	0	8,631
Deferred income taxes	7,610	2,854
Property and equipment, net	41,556	31,034
Operating lease right-of-use asset	129,403	0
Goodwill and other intangibles, net	822,732	794,604
Other assets	38,657	34,695
Total assets	1,538,630	1,425,912
Liabilities:
Accrued salaries and bonuses	322,156	404,717
Accounts payable and accrued expenses	45,391	55,048
Deferred income	27,896	27,812
Income taxes payable	3,758	7,759
Deferred income taxes	1,686	8,058
Loans payable to former shareholders	1,602	2,047
Loan payable to non-affiliate	3,342	6,610
Operating lease liabilities	150,157	0
Other liabilities	35,949	22,532
Total liabilities	591,937	534,583
Additional paid-in capital	636,123	645,090
Retained earnings	339,821	276,468
Accumulated other comprehensive (loss)	(29,317)	(30,294)
Total stockholders' equity	946,693	891,329
Total liabilities and stockholders' equity	1,538,630	1,425,912
Class A common stock, $0.001 par value. Authorized 1,000,000,000 shares; issued and outstanding 43,569,993 and 38,200,802 shares, respectively
Common stock	44	38
Class B common stock, $0.001 par value. Authorized 1,000,000,000 shares; issued and outstanding 21,998,937 and 27,197,734 shares, respectively
Common stock	$ 22	$ 27

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EMPLOYEE BENEFIT PLANS - Defined Contribution Plans (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Share-based Payment Arrangement [Abstract]
Defined contribution plan, amount of contributions	$ 1,815	$ 1,528	$ 3,524	$ 2,837

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LOANS PAYABLE

9 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

LOANS PAYABLE

Loans Payable

In August 2015, the Company entered into a revolving line of credit with Bank of America, N.A. (the "2015 Line of Credit"), which allowed for borrowings of up to $75.0 million and originally matured in August 2017. On July 28, 2017, the Company extended the maturity date of the 2015 Line of Credit to August 18, 2019, and, on August 15, 2019, the parties further extended the maturity date of the 2015 Line of Credit to September 18, 2019 (or if such date is not a business day, the immediately preceding business day). On August 23, 2019, the Company refinanced the 2015 Line of Credit by entering into a new syndicated revolving line of credit with Bank of America, N.A. and certain other financial institutions party thereto (the "2019 Line of Credit"), which allows for borrowings of up to $100.0 million (and, subject to certain conditions, provides the Company with an expansion option, which, if exercised in full, would provide for a total credit facility of $200.0 million) and matures on August 23, 2022 (or if such date is not a business day, the immediately preceding business day). The agreement governing the 2019 Line of Credit provides that borrowings bear interest at an annual rate of LIBOR plus 1.00%, commitment fees apply to unused amounts, and contains debt covenants which require that the Company maintain certain financial ratios. As of December 31, 2019, no principal was outstanding under the 2019 Line of Credit.

Prior to the IPO, Fram maintained certain loans payable to former shareholders consisting of unsecured notes payable which were transferred to the Company in conjunction with the IPO. The average interest rate on the individual notes was 3.10% and 3.69% as of December 31, 2019 and 2018, respectively, and the maturity dates range from 2020 to 2027. The Company incurred interest expense on these notes of $15 and $24 during the three months ended December 31, 2019 and 2018, respectively, and $52 and $74 during the nine months ended December 31, 2019 and 2018, respectively.

In November 2015, the Company acquired the investment banking operations of Leonardo & Co. NV ("Leonardo") in Germany, the Netherlands, and Spain, and made a 49% investment in Leonardo's operations in Italy. Total consideration included an unsecured loan of EUR 14 million payable on November 16, 2040, the remaining balance of which is included in Loan payable to non-affiliates on our Consolidated Balance Sheets. The loan bears interest at an annual rate of 1.50%. In each of January 2017, December 2017, December 2018, and December 2019, we paid a portion of this loan in the amount of EUR 2.9 million. The company incurred interest expense on this loan of $17 and $32 during the three months ended December 31, 2019 and 2018, respectively, and $64 and $106 for the nine months ended December 31, 2019 and 2018, respectively.

As described in Note 1, the Company acquired the remaining 51% of Lara, which is the holding company for Leonardo's operations in Italy, in June 2019. During the quarter ended September 30, 2019, the Company completed the redemption of the loans that were assumed upon the acquisition of the remaining 51% of Lara and that had been included in the Loan payable to non-affiliates on our Consolidated Balance Sheets.

An acquisition made in January 2017 included non-contingent consideration with a carrying value of $1,983 and $1,983 as of December 31, 2019 and March 31, 2019, respectively, which is included in Other liabilities in the accompanying Consolidated Balance Sheets.

In April 2018, the Company acquired Quayle Munro Limited. Total consideration included non-interest bearing unsecured convertible loans totaling GBP 10.5 million payable on May 31, 2022, which is included in Other liabilities in the accompanying Consolidated Balance Sheets. Under certain circumstances, the notes may be exchanged for Company stock over a three year period in equal annual installments starting on May 31, 2020. The Company incurred imputed interest expense on these notes of $99 and $98 for the three months ended December 31, 2019 and 2018, respectively, and $228 and $299 for the nine months ended December 31, 2019 and 2018, respectively.

In May 2018, the Company acquired BearTooth Advisors. Total consideration included an unsecured note of $2.8 million bearing interest at an annual rate of 2.88% and payable on May 21, 2048. The Company incurred interest expense on this note of $26 for the three months ended December 31, 2019 and 2018, and $79 and $61 during the nine months ended December 31, 2019 and 2018, respectively.

In December 2019, the Company acquired Freeman & Co. Total consideration included an unsecured note of $4.0 million bearing interest at an annual rate of 2.75% and payable on December 16, 2049. The Company incurred interest expense on this notes of $5 for the three months ended December 31, 2019.

The scheduled aggregate repayments of our Loans payable to former shareholders, Other liabilities, and the Loan payable to non-affiliates in the accompanying Consolidated Balance Sheets on a fiscal year-end basis as of December 31, 2019 are as follows:

Remaining 2020	$	1,123
2021	6,219
2022	1,760
2023	17,816
2024	338
2025 and thereafter	13,639
Total	$	40,895

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INVESTMENT SECURITIES

9 Months Ended

Dec. 31, 2019

Investments, Debt and Equity Securities [Abstract]

INVESTMENT SECURITIES

Investment Securities

Investment securities consist of corporate debt and U.S. Treasury securities with original maturities over 90 days. The Company classifies its investment securities as trading and measures them at fair value in the Consolidated Balance Sheets. Unrealized holding gains and losses for trading securities are included in Other operating expenses in the accompanying Consolidated Statements of Comprehensive Income.     

The amortized cost, gross unrealized gains (losses), and fair value of investment securities were as follows:

	December 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
Corporate debt securities	$	36,624	$	352	$	(3	)	$	36,973
U.S. treasury securities	53,959		264		(1		)	54,222
Total securities with unrealized gains	$	90,583	$	616	$	(4	)	$	91,195

	March 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
Corporate debt securities	$	116,220	$	372	$	(15	)	$	116,577
U.S. treasury securities	8,608		73		—			8,681
Total securities with unrealized gains	$	124,828	$	445	$	(15	)	$	125,258

Scheduled maturities of the debt securities held by the Company within the investment securities portfolio were as follows:

	December 31, 2019				March 31, 2019
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due within one year	$	63,760	$	63,840	$	96,109	$	96,175
Due within years two through five	26,823		27,355		28,719		29,083
Total debt within the investment securities portfolio	$	90,583	$	91,195	$	124,828	$	125,258

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ALLOWANCE FOR DOUBTFUL ACCOUNTS (Tables)

9 Months Ended

Dec. 31, 2019

Receivables [Abstract]

Allowance for Uncollectible Accounts Receivable

	Three Months Ended December 31,						Nine Months Ended December 31,
	2019			2018			2019			2018
Beginning balance	$	5,375		$	11,501		$	5,596		$	11,391
Provision for bad debts	2,215			370			2,087			983
Recovery or write-off of uncollectible accounts	(2,020		)	(5,232		)	(2,113		)	(5,735		)
Ending balance	$	5,570		$	6,639		$	5,570		$	6,639

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ACCUMULATED OTHER COMPREHENSIVE (LOSS) (Tables)

9 Months Ended

Dec. 31, 2019

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Loss

Accumulated other comprehensive (loss) at December 31, 2019 was comprised of the following:

Balance, April 1, 2019	$	(30,294	)
Foreign currency translation adjustment	977
Balance, December 31, 2019	$	(29,317	)

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SEGMENT AND GEOGRAPHICAL INFORMATION (Tables)

9 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Schedule of Revenue, Profit and Assets by Segment

The following tables present information about revenues, profit and assets by segment and geography.    

	Three Months Ended December 31,						Nine Months Ended December 31,
	2019			2018			2019			2018
Revenues by segment
Corporate Finance	$	201,137		$	183,965		$	490,707		$	462,893
Financial Restructuring	92,808			75,013			249,438			218,173
Financial and Valuation Advisory	39,570			39,035			116,529			111,941
Revenues	$	333,515		$	298,013		$	856,674		$	793,007
Segment profit (1)
Corporate Finance	$	58,495		$	62,388		$	138,611		$	146,287
Financial Restructuring	28,391			11,129			75,956			52,932
Financial and Valuation Advisory	7,163			6,302			24,384			20,386
Total segment profit	94,049			79,819			238,951			219,605
Corporate expenses (2)	26,033			17,576			78,005			61,059
Other (income)/expense, net	(1,039		)	(688		)	(3,787		)	(3,301		)
Income before provision for income taxes	$	69,055		$	62,931		$	164,733		$	161,847

(1) We adjust the compensation expense for a business segment in situations where an employee residing in one business segment is performing work in another business segment where the revenues are accrued. Segment profit may vary significantly between periods depending on the levels of collaboration among the different segments.

(2) Corporate expenses represent expenses that are not allocated to individual business segments such as office of the executives, accounting, information technology, compliance, legal, marketing, and human capital.

	December 31, 2019		March 31, 2019
Assets by segment
Corporate Finance	$	433,663	$	403,928
Financial Restructuring	167,357		184,364
Financial and Valuation Advisory	127,246		127,744
Total segment assets	728,266		716,036
Corporate assets	810,364		709,876
Total assets	$	1,538,630	$	1,425,912

Revenue by Geographic Areas

	Three Months Ended December 31,				Nine Months Ended December 31,
	2019		2018		2019		2018
Revenues by geography
United States	$	294,083	$	228,825	$	740,520	$	643,111
International	39,432		69,188		116,154		149,896
Total revenues	$	333,515	$	298,013	$	856,674	$	793,007

Assets by Geographical Areas

	December 31, 2019		March 31, 2019
Assets by geography
United States	$	1,052,168	$	1,021,975
International	486,462		403,937
Total assets	$	1,538,630	$	1,425,912

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EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Numerator:
Net income attributable to holders of shares of common stock—basic	$ 48,894	$ 43,957	$ 124,779	$ 113,758
Net income attributable to holders of shares of common stock—diluted	$ 48,894	$ 43,957	$ 124,779	$ 113,758
Denominator:
Weighted average shares of common stock outstanding—basic (in shares)	62,014,564	61,972,027	62,199,716	62,399,221
Weighted average number of incremental shares issuable from unvested restricted stock and restricted stock units, as calculated using the treasury stock method (in shares)	3,593,462	3,786,652	3,570,340	3,586,439
Weighted average shares of common stock outstanding—diluted (in shares)	65,608,026	65,758,679	65,770,056	65,985,660
Net income per share attributable to holders of shares of common stock
Basic (in dollars per share)	$ 0.79	$ 0.71	$ 2.01	$ 1.82
Diluted (in dollars per share)	$ 0.75	$ 0.67	$ 1.90	$ 1.72

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BACKGROUND

9 Months Ended

Dec. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BACKGROUND

Background

Houlihan Lokey, Inc. ("Houlihan Lokey" or "HL, Inc.," also referred to as the "Company," "we," "our," or "us") is a Delaware corporation that controls the following primary subsidiaries:

• Houlihan Lokey Capital, Inc., a California corporation ("HL Capital, Inc."), is a wholly owned direct subsidiary of HL, Inc. HL Capital, Inc. is registered as a broker-dealer under Section 15(b) of the Securities Exchange Act of 1934 and a member of Financial Industry Regulatory Authority, Inc.

• Houlihan Lokey Financial Advisors, Inc., a California corporation ("HL FA, Inc."), is a wholly owned direct subsidiary of HL, Inc.

• HL Finance, LLC ("HL Finance"), a syndicated leveraged finance platform established to arrange senior secured leveraged loans for financial sponsor-backed, privately-held, and public corporate entities. HL Finance acts as an arranger on syndicated loan transactions and has entered into an agreement with an unaffiliated third party investor that may provide commitments with respect to certain syndicated loans arranged by HL Finance.

• Houlihan Lokey EMEA, LLP, a limited liability partnership registered in England ("HL EMEA, LLP"), is an indirect subsidiary of HL, Inc. HL EMEA, LLP is regulated by the Financial Conduct Authority in the United Kingdom ("U.K.").

On August 18, 2015, the Company successfully completed an initial public offering ("IPO") of its Class A common stock. Expenses related to the corporate reorganization and IPO recorded in the Consolidated Statements of Comprehensive Income include the following:

• $3,684 and $3,629 of compensation expenses associated with the amortization of restricted stock granted in connection with the IPO during the three months ended December 31, 2019 and 2018, respectively, and $10,735 and $10,500 during the nine months ended December 31, 2019 and 2018, respectively; amortization expense of restricted stock granted in connection with the IPO is being recognized over a four and one-half year vesting period; and

• $2,509 and $2,510 of compensation expenses associated with the accrual of certain deferred cash payments granted in connection with the IPO during the three months ended December 31, 2019 and 2018, respectively, and $7,534 and $7,916 during the nine months ended December 31, 2019 and 2018, respectively; accrual expense of deferred cash payments granted in connection with the IPO is being recognized over a four and one-half year vesting period.

Prior to a corporate reorganization that was consummated immediately prior to the closing of the IPO, the Company was incorporated in California as Houlihan Lokey, Inc., a California corporation ("HL CA"), and was a wholly owned indirect subsidiary of Fram Holdings, Inc., a Delaware corporation ("Fram"), which, in turn, was a majority owned subsidiary of ORIX Corporation USA (formerly ORIX USA Corporation), a Delaware corporation ("ORIX USA"), with the remaining minority interest being held by Company employees ("HL Holders"). ORIX USA and the HL Holders held their interests in HL CA indirectly through their ownership of Fram. On July 24, 2015, HL CA merged with and into HL, Inc., with HL, Inc. as the surviving entity. In connection with the IPO, the HL Holders deposited their shares of HL, Inc. Class B common stock into a voting trust (the "HL Voting Trust") and own such common stock through the HL Voting Trust.

In April 2018, the Company completed the acquisition of Quayle Munro Limited, an independent advisory firm that provides corporate finance advisory services to companies underpinned by data & analytics, content, software, and services. 

In May 2018, the Company completed the acquisition of BearTooth Advisors, an independent advisory business providing strategic advisory and placement agency services to alternative investment managers.

In June 2019, the Company exercised its option to acquire the remaining 51% of the shares of Lara (Italy Holdco) Limited ("Lara"). Lara's only operating subsidiary, Houlihan Lokey S.p.A., is an Italian-based company that provides corporate finance advisory services.

In November 2019, the Company completed the acquisition of Fidentiis Capital, an independent advisory business providing independent corporate finance advisory services relating to mergers and acquisitions, capital raising, and financing.

In December 2019, the Company completed the acquisition of Freeman & Co., an independent advisory business providing mergers and acquisitions advisory, capital raising, and other investment banking advisory services for the financial services sector.

The Company offers financial services and financial advice to a broad clientele located throughout the United States of America ("U.S."), Europe, and the Middle East and Asia-Pacific regions. The Company has U.S. offices in Los Angeles, San Francisco, Chicago, New York City, Minneapolis, McLean (Virginia), Dallas, Houston, Miami, and Atlanta, as well as foreign offices in London, Paris, Frankfurt, Madrid, Amsterdam, Dubai, Sydney, Tokyo, Hong Kong, Beijing and Singapore. Together, the Company and its subsidiaries form an organization that provides financial services to meet a wide variety of client needs. The Company concentrates its efforts toward the earning of professional fees with focused services across the following three business segments:

• Corporate Finance ("CF") provides general financial advisory services in addition to advice on mergers and acquisitions and capital markets offerings. We advise public and private institutions on a wide variety of situations, including buy-side and sell-side transactions, as well as leveraged loans, private mezzanine debt, high-yield debt, initial public offerings, follow-ons, convertibles, equity private placements, private equity, and liability management transactions, and advise financial sponsors on all types of transactions. The majority of our CF revenues consists of fees paid upon the successful completion of the transaction or engagement ("Completion Fees"). A CF transaction can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to the fees paid at the time an engagement letter is signed ("Retainer Fees") and in some cases fees paid during the course of the engagement ("Progress Fees") that may have been received.

• Financial Restructuring ("FR") provides advice to debtors, creditors and other parties-in-interest in connection with recapitalization/deleveraging transactions implemented both through bankruptcy proceedings and through out-of-court exchanges, consent solicitations or other mechanisms, as well as in distressed mergers and acquisitions and capital markets activities. As part of these engagements, our FR business segment offers a wide range of advisory services to our clients, including: the structuring, negotiation, and confirmation of plans of reorganization; structuring and analysis of exchange offers; corporate viability assessment; dispute resolution and expert testimony; and procuring debtor-in-possession financing. Although atypical, FR transactions can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to the Retainer Fees and/or Progress Fees.

•

Financial and Valuation Advisory ("FVA"), formerly known as Financial Advisory Services, primarily provides valuations of various assets, including: companies; illiquid debt and equity securities; and intellectual property (among other assets and liabilities). These valuations are used for financial reporting, tax reporting, and other purposes. In addition, our FVA business segment renders fairness opinions in connection with mergers and acquisitions and other transactions, and solvency opinions in connection with corporate spin-offs and dividend recapitalizations, and other types of financial opinions in connection with other transactions. Also, our FVA business segment provides dispute resolution services to clients where fees are usually based on the hourly rates of our financial professionals. Unlike our CF or FR segments, the fees generated in our FVA segment are generally not contingent on the successful completion of a transaction.

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LOANS PAYABLE - Narrative (Details) € in Millions	1 Months Ended				3 Months Ended		9 Months Ended
	Dec. 31, 2018 EUR (€)	Dec. 31, 2017 EUR (€)	Jan. 31, 2017 EUR (€)	Aug. 31, 2015 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Aug. 23, 2019 USD ($)	Mar. 31, 2019 USD ($)	May 31, 2018 USD ($)	Apr. 30, 2018 GBP (£)	Nov. 30, 2015 USD ($)
Bank of America | Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit, maximum borrowing capacity				$ 75,000,000.0					$ 100,000,000.0
Outstanding line of credit					$ 0		$ 0
LIBOR | Bank of America | Revolving Credit Facility
Debt Instrument [Line Items]
Basis spread on variable rate (as a percent)				1.00%
2019 Line of Credit, Expansion Option | Bank of America | Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit, maximum borrowing capacity									$ 200,000,000.0
Loans Payable
Debt Instrument [Line Items]
Incurred interest expense on notes					15,000	$ 24,000	52,000	$ 74,000
Loans Payable | 1.50% Loans Payable
Debt Instrument [Line Items]
Interest on debt					17,000	32,000	64,000	106,000
Stated interest rate (as a percent)													1.50%
Portion of loan paid | €	€ 2.9	€ 2.9	€ 2.9
Loans Payable | Non Interest Bearing Unsecured Convertible Loan
Debt Instrument [Line Items]
Interest on debt					99,000	98,000	228,000	299,000
Loans payable, face amount | £												£ 10,500,000
Loans Payable | 2.88% Loans Payable
Debt Instrument [Line Items]
Interest on debt					26,000	$ 26,000	$ 79,000	$ 61,000
Stated interest rate (as a percent)											2.88%
Loans payable, face amount											$ 2,800,000
Loans Payable | 2.75% Loans Payable
Debt Instrument [Line Items]
Interest on debt					$ 5,000
Stated interest rate (as a percent)					2.75%		2.75%
Loans payable, face amount					$ 4,000,000.0		$ 4,000,000.0
Loans Payable | Former Shareholders
Debt Instrument [Line Items]
Stated interest rate (as a percent)					3.10%		3.10%			3.69%
Italy | Leonardo & CO. NV
Debt Instrument [Line Items]
Investment interest in Italy (as a percent)					51.00%		51.00%						49.00%
Loans payable, face amount													$ 14,000,000
Other Liabilities | January 2017 Acquisition
Debt Instrument [Line Items]
Non-contingent consideration					$ 1,983,000		$ 1,983,000			$ 1,983,000

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PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Mar. 31, 2019
Property, Plant and Equipment [Line Items]
Total cost	$ 92,037		$ 92,037		$ 74,347
Less: accumulated depreciation	(50,481)		(50,481)		(43,313)
Total net book value	41,556		41,556		31,034
Depreciation expense	2,423	$ 2,084	7,101	$ 6,348
Equipment
Property, Plant and Equipment [Line Items]
Total cost	8,838		8,838		7,916
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total cost	21,953		21,953		19,445
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total cost	42,577		42,577		34,370
Computers and software
Property, Plant and Equipment [Line Items]
Total cost	17,552		17,552		11,499
Other
Property, Plant and Equipment [Line Items]
Total cost	$ 1,117		$ 1,117		$ 1,117

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CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Thousands	Dec. 31, 2019	Mar. 31, 2019
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 4,854	$ 4,255
Allowance for doubtful accounts, unbilled work in process	$ 716	$ 1,341
Class A common stock, $0.001 par value. Authorized 1,000,000,000 shares; issued and outstanding 43,569,993 and 38,200,802 shares, respectively
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	1,000,000,000	1,000,000,000
Common stock, shares issued (in shares)	41,817,614	38,200,802
Common stock, shares outstanding (in shares)	41,817,614	38,200,802
Class B common stock, $0.001 par value. Authorized 1,000,000,000 shares; issued and outstanding 21,998,937 and 27,197,734 shares, respectively
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	1,000,000,000	1,000,000,000
Common stock, shares issued (in shares)	24,079,076	27,197,734
Common stock, shares outstanding (in shares)	24,079,076	27,197,734

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - 3 months ended Dec. 31, 2019 - Foreign Currency Forward Contract $ in Thousands, € in Millions	USD ($)	EUR (€)	USD ($)
Related Party Transaction [Line Items]
Aggregate notional value of foreign currency forward contract		€ 1.0	$ 5,000
Other operating expenses
Related Party Transaction [Line Items]
Fair value gains (losses) included in other operating expenses	$ 30

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RELATED PARTY TRANSACTIONS (Details) - USD ($) $ / shares in Units, $ in Thousands						3 Months Ended		9 Months Ended
	Aug. 01, 2019	May 30, 2019	Jun. 04, 2018	Apr. 05, 2018	Mar. 12, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Mar. 31, 2019
Related Party Transaction [Line Items]
Weighted average price per share (in dollars per share)						$ 44,120	$ 40,330	$ 43.98	$ 46.71
Deferred revenue, related parties						$ 0		$ 0		$ 34
Financial advisory services | ORIX USA and its Affiliates
Related Party Transaction [Line Items]
Related party revenue and income						0	$ 197	698	$ 8,692
Management And Other Administrative Services
Related Party Transaction [Line Items]
Related party revenue and income						0	$ 51	126	$ 275
Accounts Receivable and Unbilled Work in Progress
Related Party Transaction [Line Items]
Due from related parties						$ 0		$ 0		3
Class B
Related Party Transaction [Line Items]
Outstanding common stock repurchased and retired (in shares)						1,350,000	53,000	610,943,000	133,000
Class B | ORIX USA Corporation
Related Party Transaction [Line Items]
Outstanding common stock repurchased and retired (in shares)				2,000,000,000
Class A
Related Party Transaction [Line Items]
Shares issued during period (in shares)					2,000,000
Outstanding common stock repurchased and retired (in shares)						97,956,000	370,728,000	632,353,000	1,480,869,000
Weighted average price per share (in dollars per share)			$ 49.11
Class A | ORIX USA Corporation
Related Party Transaction [Line Items]
Shares issued during period (in shares)	3,377,935,000	3,000,000
Price to the public (in dollars per share)	$ 45.62	$ 45.80
Shares repurchased from single employee (in shares)			697,000
Proceeds from sale of stock	$ 154,100
Other Assets | Loans Receivable | Certain employees
Related Party Transaction [Line Items]
Due from related parties						$ 15,693		$ 15,693		$ 15,228
Follow-on Offering | Class A
Related Party Transaction [Line Items]
Sale of stock, price per share (in dollars per share)					$ 47.25
Price to the public (in dollars per share)			$ 49.15
Follow-on Offering | Class A | ORIX USA Corporation
Related Party Transaction [Line Items]
Shares issued during period (in shares)			1,985,983
Affiliated Entity | Follow-on Offering | Class A
Related Party Transaction [Line Items]
Shares issued during period (in shares)			1,014,017

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ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Allowance for Uncollectible Accounts Receivable
Beginning balance	$ 5,375	$ 11,501	$ 5,596	$ 11,391
Provision for bad debt	2,215	370	2,087	983
Recovery or write-off of uncollectible accounts	(2,020)		(2,113)	(5,735)
Recovery or write-off of uncollectible accounts		(5,232)
Ending balance	$ 5,570	$ 6,639	$ 5,570	$ 6,639

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LEASES - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Dec. 31, 2019	Dec. 31, 2019
Leases [Abstract]
Operating lease expense	$ 6,466	$ 21,729
Variable lease expense	2,999	12,675
Short-term lease expense	114	195
Less: Sublease income	(48)	(145)
Total lease costs	$ 9,531	$ 34,454

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EMPLOYEE BENEFIT PLANS - Activity in Liability Classified Shares (Details) - USD ($) $ in Thousands	9 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Awards Settleable in Shares
Beginning balance	$ 21,676	$ 15,493
Offer to grant	6,410	11,407
Share price determined-converted to cash payments	(52)	(300)
Share price determined-transferred to equity grants	(6,457)	4,655
Forfeited	(274)	(476)
Ending balance	$ 21,303	$ 21,469

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REVENUE RECOGNITION (Tables)

9 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

Contract with Customer, Asset and Liability

The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers:

	April 1, 2019		Increase/(Decrease)			December 31, 2019
Receivables (1)	$	64,797	$	(9,327	)	$	55,470
Unbilled work in process, net of allowance for doubtful accounts	71,891		(3,934		)	67,957
Contract Assets (1)	6,033		909			6,942
Contract Liabilities (2)	27,812		84			27,896

(1) Included within Accounts receivable, net of allowance for doubtful accounts in the December 31, 2019 Consolidated Balance Sheet.

(2)

Included within Deferred income in the December 31, 2019 Consolidated Balance Sheet.

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SEGMENT AND GEOGRAPHICAL INFORMATION

9 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

SEGMENT AND GEOGRAPHICAL INFORMATION

Segment and Geographical Information

The Company’s reportable segments are described in Note 1 and each are individually managed and provide separate services which require specialized expertise for the provision of those services. Revenues by segment represent fees earned on the various services offered within each segment. Segment profit consists of segment revenues, less (1) direct expenses including compensation, travel, meals and entertainment, professional fees, and bad debt and (2) expenses allocated by headcount such as communications, rent, depreciation and amortization, and office expense. The corporate expense category includes costs not allocated to individual segments, including charges related to incentive compensation and share-based payments to corporate employees, as well as expenses of senior management and corporate departmental functions managed on a worldwide basis, including office of the executives, accounting, human capital, marketing, information technology, and compliance and legal. The following tables present information about revenues, profit and assets by segment and geography.    

	Three Months Ended December 31,						Nine Months Ended December 31,
	2019			2018			2019			2018
Revenues by segment
Corporate Finance	$	201,137		$	183,965		$	490,707		$	462,893
Financial Restructuring	92,808			75,013			249,438			218,173
Financial and Valuation Advisory	39,570			39,035			116,529			111,941
Revenues	$	333,515		$	298,013		$	856,674		$	793,007
Segment profit (1)
Corporate Finance	$	58,495		$	62,388		$	138,611		$	146,287
Financial Restructuring	28,391			11,129			75,956			52,932
Financial and Valuation Advisory	7,163			6,302			24,384			20,386
Total segment profit	94,049			79,819			238,951			219,605
Corporate expenses (2)	26,033			17,576			78,005			61,059
Other (income)/expense, net	(1,039		)	(688		)	(3,787		)	(3,301		)
Income before provision for income taxes	$	69,055		$	62,931		$	164,733		$	161,847

(1) We adjust the compensation expense for a business segment in situations where an employee residing in one business segment is performing work in another business segment where the revenues are accrued. Segment profit may vary significantly between periods depending on the levels of collaboration among the different segments.

(2) Corporate expenses represent expenses that are not allocated to individual business segments such as office of the executives, accounting, information technology, compliance, legal, marketing, and human capital.

	December 31, 2019		March 31, 2019
Assets by segment
Corporate Finance	$	433,663	$	403,928
Financial Restructuring	167,357		184,364
Financial and Valuation Advisory	127,246		127,744
Total segment assets	728,266		716,036
Corporate assets	810,364		709,876
Total assets	$	1,538,630	$	1,425,912

	Three Months Ended December 31,				Nine Months Ended December 31,
	2019		2018		2019		2018
Revenues by geography
United States	$	294,083	$	228,825	$	740,520	$	643,111
International	39,432		69,188		116,154		149,896
Total revenues	$	333,515	$	298,013	$	856,674	$	793,007

	December 31, 2019		March 31, 2019
Assets by geography
United States	$	1,052,168	$	1,021,975
International	486,462		403,937
Total assets	$	1,538,630	$	1,425,912

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EMPLOYEE BENEFIT PLANS

9 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

EMPLOYEE BENEFIT PLANS

Employee Benefit Plans

Defined Contribution Plans

The Company sponsors a 401(k) defined contribution savings plan for its domestic employees and defined contribution retirement plans for its international employees. The Company contributed approximately $1,815 and $1,528 during the three months ended December 31, 2019 and 2018, respectively, and $3,524 and $2,837 during the nine months ended December 31, 2019 and 2018, respectively, to these defined contribution plans.

Share-Based Incentive Plans

Following the IPO, additional awards of restricted shares have been and will be made under the Amended and Restated Houlihan Lokey, Inc. 2016 Incentive Award Plan (the "2016 Incentive Plan"), which became effective in August 2015 and was amended in October 2017. Under the 2016 Incentive Plan, it is anticipated that the Company will continue to grant cash and equity-based incentive awards to eligible service providers in order to attract, motivate and retain the talent necessary to operate the Company's business. Equity-based incentive awards issued under the 2016 Incentive Plan generally vest over a four-year period. An aggregate of 37,847 restricted shares of Class A common stock were granted under the 2016 Incentive Plan to (i) two independent directors in August 2015 at $21 per share, (ii) two independent directors in the first quarter of fiscal 2017 at $25.21 per share, (iii) one independent director in the first quarter of fiscal 2017 at $23.93 per share, (iv) three independent directors in the first quarters of fiscal 2018 and 2019 at $33.54 and $44.50 per share, respectively, (v) one independent director in the third quarter of fiscal 2019 at $42.41 per share, (vi) four independent directors in the first quarter of fiscal 2020 at $47.22 per share, and (vii) one independent director in the third quarter of fiscal 2020 at $47.21 per share.

No excess tax benefit was recognized during the three months ended December 31, 2019 or 2018 and an excess tax benefit of $7,605 was recognized during the nine months ended December 31, 2019 as a component of the provision for income taxes and an operating activity on the Consolidated Statements of Cash Flows, with no such benefit for the nine months ended December 31, 2018. The excess tax benefit recognized in the first quarter of fiscal 2020 was related to shares vested in April and May 2019. For the comparable fiscal 2019 period, vesting of shares scheduled to vest in April and May 2018 was accelerated on October 21, 2017 and the corresponding excess tax benefit was recognized in the fiscal year ended March 31, 2018. The Company recorded cash outflows of $(31,469) and $(1,947) related to the settlement of share-based awards in satisfaction of withholding tax requirements in financing activities on the Consolidated Statements of Cash Flows for the nine months ended December 31, 2019 and 2018, respectively.

The share awards are classified as equity awards at the time of grant unless the number of shares granted is unknown. Awards that are settleable in shares based upon a future determinable stock price are classified as liabilities until the price is established and the resulting number of shares is known, at which time they are re-classified from liabilities to equity awards. Activity in equity classified share awards which relate to the Company's 2006 Incentive Award Plan (the "2006 Incentive Plan") and the 2016 Incentive Plan during the nine months ended December 31, 2019 and 2018 is as follows:

Unvested Share Awards	Shares		Weighted Average Grant Date Fair Value
Balance, April 1, 2019	3,763,984		$	32.29
Granted	1,368,079		47.02
Vested	(1,496,315	)	29.30
Forfeited/Repurchased	(81,008	)	38.56
Balance, December 31, 2019	3,554,740		$	39.13
Balance, April 1, 2018	2,854,893		$	26.39
Granted	1,059,616		49.35
Vested	(76,702	)	48.78
Forfeited/Repurchased	(57,797	)	33.16
Balance, December 31, 2018	3,780,010		$	32.28

Activity in liability classified share awards during the nine months ended December 31, 2019 and 2018 is as follows:

Awards Settleable in Shares	Fair Value
Balance, April 1, 2019	$	21,676
Offer to grant	6,410
Share price determined-converted to cash payments	(52		)
Share price determined-transferred to equity grants	(6,457		)
Forfeited	(274		)
Balance, December 31, 2019	$	21,303
Balance at April 1, 2018	$	15,493
Offer to grant	11,407
Share price determined-converted to cash payments	(300		)
Share price determined-transferred to equity grants	(4,655		)
Forfeited	(476		)
Balance, December 31, 2018	$	21,469

Compensation expenses for the Company associated with both equity and liability classified awards totaled $16,682 and $13,781 for the three months ended December 31, 2019 and 2018, respectively, and $47,791 and $44,540 for the nine months ended December 31, 2019 and 2018, respectively.

As of December 31, 2019, there was $139,061 of total unrecognized compensation cost related to unvested share awards granted under both the 2006 Incentive Plan and 2016 Incentive Plan. That cost is expected to be recognized over a weighted average period of 1.19 years.

On October 19, 2017, our board of directors approved an amendment (the “Amendment”) to the 2016 Incentive Plan reducing the number of shares of common stock available for issuance under the 2016 Incentive Plan by approximately 12.2 million shares. Under the Amendment, the aggregate number of shares of common stock that are available for issuance under awards granted pursuant to the 2016 Incentive Plan is equal to the sum of (i) 8.0 million and (ii) any shares of our Class B common stock that are subject to awards under our 2006 Incentive Plan that terminate, expire or lapse for any reason after October 19, 2017.

The number of shares available for issuance will be increased annually beginning on April 1, 2018 and ending on April 1, 2025, by an amount equal to the lowest of:

• 6,540,659 shares of our Class A common stock and Class B common stock;

• Six percent of the shares of Class A common stock and Class B common stock outstanding on the final day of the immediately preceding fiscal year; and

•

such smaller number of shares as determined by our board of directors.

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

9 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill and Other Intangibles

The following table provides a reconciliation of Goodwill and other intangibles, net reported on the Consolidated Balance Sheets.

	Useful Lives	December 31, 2019			March 31, 2019
Goodwill (1)	Indefinite	$	626,519		$	594,812
Tradename-Houlihan Lokey (1)	Indefinite	192,210			192,210
Other intangible assets	Varies	18,217			18,614
Total cost		836,946			805,636
Less: accumulated amortization		(14,214		)	(11,032		)
Goodwill and other intangibles, net		$	822,732		$	794,604
Deferred tax liability (1)		(51,676		)	(51,676		)
Total net book value, after taxes		$	771,056		$	742,928

(1)

When HL CA was acquired by Fram in January 2006, approximately $392,600 of goodwill and $192,210 of indefinite-lived intangible assets were generated and recognized. In accordance with ASC Topic 805, Business Combinations, since HL CA was wholly owned by Fram, this goodwill and all other purchase accounting-related adjustments were pushed down to the Company’s reporting level. Through both foreign and domestic acquisitions made directly by HL CA and the Company since 2006, additional goodwill of approximately $233,919, inclusive of foreign currency translations, has been recognized.

Estimated Future Amortization for Amortizable Intangible Assets

The estimated future amortization for amortizable intangible assets for each of the next five years are as follows:

	Year Ended March 31,
Remainder of 2020	$	2,007
2021	1,419
2022	157
2023	7
2024	7

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EMPLOYEE BENEFIT PLANS (Tables)

9 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Activity in Equity Classified Share Awards

Activity in equity classified share awards which relate to the Company's 2006 Incentive Award Plan (the "2006 Incentive Plan") and the 2016 Incentive Plan during the nine months ended December 31, 2019 and 2018 is as follows:

Unvested Share Awards	Shares		Weighted Average Grant Date Fair Value
Balance, April 1, 2019	3,763,984		$	32.29
Granted	1,368,079		47.02
Vested	(1,496,315	)	29.30
Forfeited/Repurchased	(81,008	)	38.56
Balance, December 31, 2019	3,554,740		$	39.13
Balance, April 1, 2018	2,854,893		$	26.39
Granted	1,059,616		49.35
Vested	(76,702	)	48.78
Forfeited/Repurchased	(57,797	)	33.16
Balance, December 31, 2018	3,780,010		$	32.28

Activity in Liability Classified Share Awards

Activity in liability classified share awards during the nine months ended December 31, 2019 and 2018 is as follows:

Awards Settleable in Shares	Fair Value
Balance, April 1, 2019	$	21,676
Offer to grant	6,410
Share price determined-converted to cash payments	(52		)
Share price determined-transferred to equity grants	(6,457		)
Forfeited	(274		)
Balance, December 31, 2019	$	21,303
Balance at April 1, 2018	$	15,493
Offer to grant	11,407
Share price determined-converted to cash payments	(300		)
Share price determined-transferred to equity grants	(4,655		)
Forfeited	(476		)
Balance, December 31, 2018	$	21,469

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PROPERTY AND EQUIPMENT

9 Months Ended

Dec. 31, 2019

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

Property and Equipment

Property and equipment are stated at cost. Repair and maintenance charges are expensed as incurred and costs of renewals or improvements are capitalized at cost. Depreciation on furniture and office equipment is recognized on a straight-line basis over the estimated useful lives of the respective assets. Leasehold improvements are recorded as prepaid assets and included within fixed lease payments. See Note 16 for additional information.

Property and equipment, net of accumulated depreciation consist of the following:

	December 31, 2019			March 31, 2019
Equipment	$	8,838		$	7,916
Furniture and fixtures	21,953			19,445
Leasehold improvements	42,577			34,370
Computers and software	17,552			11,499
Other	1,117			1,117
Total cost	92,037			74,347
Less: accumulated depreciation	(50,481		)	(43,313		)
Total net book value	$	41,556		$	31,034

Additions to property and equipment during the nine months ended December 31, 2019 were primarily related to leasehold improvement costs incurred and computer and software purchases.

Depreciation expense of approximately $2,423 and $2,084 was recognized during the three months ended December 31, 2019 and 2018, respectively, and $7,101 and $6,348 was recognized during the nine months ended December 31, 2019 and 2018, respectively.

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RELATED PARTY TRANSACTIONS

9 Months Ended

Dec. 31, 2019

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

Related Party Transactions

The Company provides financial advisory services to ORIX USA and its affiliates and certain other related parties, and received fees for these services totaling approximately $0 and $197 during the three months ended December 31, 2019 and 2018, respectively, and $698 and $8,692 for the nine months ended December 31, 2019 and 2018, respectively.

The Company provided certain management and administrative services for the Company's unconsolidated entities and received fees for these services. As a result, the Company received net fees of $0 and $51 during the three months ended December 31, 2019 and 2018, respectively, and $126 and $275 during the nine months ended December 31, 2019 and 2018, respectively.

On March 12, 2018, pursuant to a registered underwritten public offering, we issued and sold 2,000,000 shares of our Class A common stock and certain of our former and current employees and members of our management sold 2,000,000 shares of our Class A common stock, in each case, at a price to the public of $0.04725 per share (the “March 2018 Follow-on Offering”). In connection with, and prior to, the March 2018 Follow-on Offering, on January 26, 2018, we entered into a Forward Share Purchase Agreement (the "January 2018 Forward Share Purchase Agreement"), with an indirect wholly owned subsidiary of ORIX USA pursuant to which we agreed to purchase from ORIX USA on April 5, 2018 the number of shares of our Class B common stock equal to the number of shares of our Class A common stock sold by us in the March 2018 Follow-on Offering for a purchase price per share equal to the public offering price in the March 2018 Follow-on Offering less underwriting discounts and commissions. On April 5, 2018, the Company settled the transaction provided for in the January 2018 Forward Share Purchase Agreement and acquired 2,000,000 shares of Class B common stock from ORIX USA using the net proceeds we received from the March 2018 Follow-on Offering and the shares were retired.  In accordance with the terms of the January 2018 Forward Share Purchase Agreement, the purchase price per share under the January 2018 Forward Share Purchase Agreement was reduced by the per share amount of the dividend paid to ORIX USA on the shares of our Class B common stock subject to the January 2018 Forward Share Purchase Agreement prior to the settlement of the transaction.

On June 4, 2018, pursuant to a registered underwritten public offering, ORIX USA sold 1,985,983 shares of our Class A common stock and certain of our former and current employees and members of our management sold 1,014,017 shares, in each case, at a price to the public of $49.15 per share (the "June 2018 Follow-on Offering"). Concurrently with the closing of the offering, the Company repurchased from ORIX USA 697,000 shares of Class A common stock at a price per share of $49.11.

On May 30, 2019, pursuant to a registered underwritten public offering, ORIX USA sold 3,000,000 shares of our Class A common stock to the public at a price of $45.80.

On August 1, 2019, pursuant to a registered underwritten public offering, ORIX USA sold its remaining ownership of 3,377,935 shares of our Class A common stock to the public for net proceeds of approximately $154.1 million before expenses.

In the accompanying Consolidated Balance Sheets, the Company carried accounts receivable and unbilled work in progress from related parties totaling approximately $0 and $3 as of December 31, 2019 and March 31, 2019, respectively. The Company also deferred income from related parties for service fees totaling $0 and $34 as of December 31, 2019 and March 31, 2019, respectively.

Other assets in the accompanying Consolidated Balance Sheets includes loans receivable from certain employees of $15,693 and $15,228 as of December 31, 2019, and March 31, 2019, respectively.

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INCOME TAXES

9 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

INCOME TAXES

Income Taxes

Prior to the IPO, ORIX USA and its subsidiaries, including the Company, filed consolidated federal income tax returns and separate returns in state and local jurisdictions and did so for fiscal year 2016 through the date of the IPO. The Company reported income tax expense as if it filed separate returns in all jurisdictions. Following the IPO, the Company files a consolidated federal income tax return separate from ORIX USA, as well as consolidated and separate returns in state and local jurisdictions, and the Company reports income tax expense on this basis.

We account for income taxes in accordance with ASC Topic 740, Income Taxes, which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax basis of our assets and liabilities. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. The measurement of the deferred items is based on enacted tax laws and applicable tax rates. A valuation allowance related to a deferred tax asset is recorded if it is more likely than not that some portion or all of the deferred tax asset will not be realized.

The Company utilized a comprehensive model to recognize, measure, present, and disclose in its financial statements any uncertain tax positions that have been taken or are expected to be taken on a tax return. The impact of an uncertain tax position that is more likely than not of being sustained upon audit by the relevant taxing authority must be recognized at the largest amount that is more likely than not to be sustained. No portion of an uncertain tax position will be recognized if the position has less than a 50% likelihood of being sustained. Interest expense and penalties related to income taxes are included in the provision for income taxes in the accompanying Consolidated Statements of Comprehensive Income.

The Global Intangible Low-Taxed Income tax (“GILTI inclusion”) can be recognized in the financial statements through an accounting policy election by either recording a period cost (permanent item) or providing deferred income taxes stemming from certain basis differences that are expected to result in GILTI inclusion. The Company has elected to account for the tax impacts of the GILTI inclusion as a period cost.

The Company’s provision for income taxes was $20,161 and $18,974 for the three months ended December 31, 2019 and 2018, respectively, and $39,954 and $48,089 for the nine months ended December 31, 2019 and 2018, respectively. This represents effective tax rates of 29.2% and 30.2% for the three months ended December 31, 2019 and 2018, respectively, and 24.3% and 29.7% and for the nine months ended December 31, 2019 and 2018, respectively.

The decrease in the Company's tax rate during the nine months ended December 31, 2019 relative to the same period in 2018 was primarily a result of the vesting of stock that occurred in April and May 2019. The primary drivers of the Company’s effective tax rate being higher than the statutory rate of 21% for the three months ended December 31, 2019 were the provision for state taxes, the GILTI inclusion, limits on the deductibility of executive compensation under IRC Section 162(m) and limits on the deductibility of certain meal and entertainment expense items.

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SUBSEQUENT EVENTS (Details)	Jan. 23, 2020 $ / shares
Subsequent Event
Subsequent Event [Line Items]
Quarterly cash dividend declared (in dollars per share)	$ 0.31

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REVENUE RECOGNITION

9 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

Revenue Recognition

The Company generates revenues from contractual advisory services and reimbursed costs incurred in fulfilling those contracts. Revenues for all three business segments (CF, FR, and FVA) are recognized upon satisfaction of the performance obligation, which may be satisfied over time or at a point in time. The amount and timing of the fees paid vary by the type of engagement.

The amount of revenue recognized reflects the consideration we expect to be entitled to in exchange for those promised services (i.e., the “transaction price”). In determining the transaction price, we consider multiple factors, including the effects of variable consideration. Variable consideration is included in the transaction price only to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainties with respect to the amount are resolved. In determining when to include variable consideration in the transaction price, we consider the range of possible outcomes, the predictive value of our past experiences, the time period of when uncertainties expect to be resolved and the amount of consideration that is susceptible to factors outside of our influence, such as market volatility or the judgment and actions of third parties. The substantial majority of the Company’s advisory fees (i.e., Completion Fees) are considered variable and constrained as they are contingent upon future events, which include factors outside of our control (e.g., completion of a transaction or third party emergence from bankruptcy or approval by the court).

Revenues from CF engagements primarily consist of fees generated in connection with advisory services related to corporate finance, mergers and acquisitions, and capital markets offerings. Completion Fees from these engagements are recognized at a point in time when the related transaction has been effectively closed. At that time, the Company has transferred control of the promised service and the customer obtains control. CF contracts generally contain a variety of promised services that may be capable of being distinct, but they are not distinct within the context of the contract as the various services are inputs to the combined output of successfully brokering a specific transaction.

Revenues from FR engagements primarily consist of fees generated in connection with advisory services to debtors, creditors and other parties-in-interest involving recapitalization or deleveraging transactions implemented both through bankruptcy proceedings and through out-of-court exchanges, consent solicitations or other mechanisms, as well as in distressed mergers and acquisitions and capital markets activities. Retainer Fees and Progress Fees from restructuring engagements are recognized over time using a time elapsed measure of progress as our clients simultaneously receive and consume the benefits of those services as they are provided. Completion Fees from these engagements are recognized at a point in time when the related transaction has been effectively closed. At that time, the Company has transferred control of the promised service and the customer obtains control.

Revenues from FVA engagements primarily consist of fees generated in connection with valuation and diligence services and rendering fairness, solvency and other financial opinions. Revenues are recognized at a point in time as these engagements include a singular objective that does not transfer any notable value to the Company’s clients until the opinions have been rendered and delivered to the client. However, certain engagements consist of advisory services where fees are usually based on the hourly rates of our financial professionals. Such revenues are recognized over time as the benefits of these advisory services are transferred to the Company’s clients throughout the course of the engagement, and, as a practical expedient, the Company has elected to use the ‘as-invoiced’ approach to recognize revenue.

Taxes, including value added taxes, collected from customers and remitted to governmental authorities are accounted for on a net basis, and therefore, are excluded from revenue in the Consolidated Statements of Comprehensive Income.

Disaggregation of Revenues

The Company has disclosed disaggregated revenues based on its business segment and geographical area, which provides a reasonable representation of how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. See Note 18 for additional information.

Contract Balances

The timing of revenue recognition may differ from the timing of payment by customers. The Company records a receivable when revenue is recognized prior to payment and there is an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred income (contract liability) until the performance obligations are satisfied.

Costs incurred in fulfilling advisory contracts with point-in-time revenue recognition are recorded as a contract asset when the costs (i) relate directly to a contract, (ii) generate or enhance resources of the Company that will be used in satisfying performance obligations, and (iii) are expected to be recovered. The Company amortizes the contract asset costs related to fulfilling a contract based on recognition of fee revenues for the corresponding contract. As the Company changed the presentation of costs incurred in fulfilling advisory contracts from a net presentation within non-compensation expenses to a gross basis in revenues, the Company records a contract liability for the reimbursable costs incurred until the fee revenue is recognized.

Costs incurred in fulfilling an advisory contract with over-time revenue recognition are expensed as incurred.

The change in the Company’s contract assets and liabilities during the period primarily reflects the timing difference between the Company’s performance and the customer’s payment. The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers:

	April 1, 2019		Increase/(Decrease)			December 31, 2019
Receivables (1)	$	64,797	$	(9,327	)	$	55,470
Unbilled work in process, net of allowance for doubtful accounts	71,891		(3,934		)	67,957
Contract Assets (1)	6,033		909			6,942
Contract Liabilities (2)	27,812		84			27,896

(1) Included within Accounts receivable, net of allowance for doubtful accounts in the December 31, 2019 Consolidated Balance Sheet.

(2) Included within Deferred income in the December 31, 2019 Consolidated Balance Sheet.

During the three and nine months ended December 31, 2019, $3.4 million and $17.8 million of revenues, respectively, were recognized that were included in the Deferred income balance at the beginning of the period.

As a practical expedient, the Company does not disclose information about remaining performance obligations pertaining to (i) contracts that have an original expected duration of one year or less, and/or (ii) contracts where the variable consideration is allocated entirely to a wholly unsatisfied promise to transfer a distinct service that is or forms part of a single performance obligation. The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with an original expected duration exceeding one year was not material at December 31, 2019.

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Class A	Class B	Common stock Class A	Common stock Class B	Treasury Stock	Additional paid-in capital	Retained earnings	Accumulated other comprehensive loss	Total stockholders' equity
Beginning balance (in shares) at Mar. 31, 2018				30,604,405,000	37,187,932,000	(2,000,000,000)
Beginning balance at Mar. 31, 2018				$ 31	$ 37	$ (93,500)	$ 753,077	$ 207,124	$ (13,956)	$ 852,813
Increase (Decrease) in Stockholders' Equity
Shares issued (in shares)					1,198,254,000
Shares issued					$ 1		9,646			9,647
Stock compensation vesting							36,732			36,732
Class B shares sold (in shares)				(360,213,000)	360,213,000
Class B shares sold										0
Dividends								(52,611)		(52,611)
Secondary offering (in shares)				3,000,000,000	(3,000,000,000)
Secondary offering				$ 3	$ (3)					0
Retired shares upon settlement of forward purchase agreement (in shares)		(1,480,869,000)	(133,000)		(2,000,000,000)	2,000,000,000
Retired shares upon settlement of forward purchase agreement		$ (69,169)	$ (6)		$ (2)	$ 93,500	(93,498)			0
Conversion of Class B to Class A shares (in shares)				2,020,474,000	(2,020,474,000)
Conversion of Class B to Class A shares				$ 2	$ (2)					0
Shares issued to non-employee directors (in shares)				6,570,000
Shares issued to non-employee directors							187			187
Other shares repurchased/retired/forfeited (in shares)				(1,480,869,000)	(93,691,000)
Other shares repurchased/retired/forfeited				$ (1)			(71,139)			(71,140)
Net income	$ 113,758							113,758		113,758
Change in unrealized translation	(19,038)								(19,038)	(19,038)
Total comprehensive income								113,758	(19,038)	94,720
Ending balance (in shares) at Dec. 31, 2018				34,510,793	30,911,808	0
Ending balance at Dec. 31, 2018				$ 35	$ 31	$ 0	635,005	248,590	(32,994)	850,667
Beginning balance (in shares) at Sep. 30, 2018				34,696,005	31,063,445	0
Beginning balance at Sep. 30, 2018				$ 35	$ 31	$ 0	636,150	222,324	(30,234)	828,306
Increase (Decrease) in Stockholders' Equity
Shares issued (in shares)					40,253
Shares issued					$ 0		2,655			2,655
Stock compensation vesting							11,161			11,161
Class B shares sold (in shares)				(164,373)	164,373
Class B shares sold										0
Dividends								17,690		(17,690)
Retired shares upon settlement of forward purchase agreement (in shares)		(370,728,000)	(53,000)
Retired shares upon settlement of forward purchase agreement		$ (14,952)	$ (2)
Conversion of Class B to Class A shares (in shares)				(18,785)	18,785
Conversion of Class B to Class A shares				$ 0	$ 0					0
Shares issued to non-employee directors (in shares)				2,358
Shares issued to non-employee directors										0
Other shares repurchased/retired/forfeited (in shares)				370,728	8,732
Other shares repurchased/retired/forfeited							14,961			(14,961)
Net income	43,957							43,957		43,957
Change in unrealized translation	(2,760)								(2,760)	(2,760)
Total comprehensive income								43,957	(2,760)	41,197
Ending balance (in shares) at Dec. 31, 2018				34,510,793	30,911,808	0
Ending balance at Dec. 31, 2018				$ 35	$ 31	$ 0	635,005	248,590	(32,994)	850,667
Beginning balance (in shares) at Mar. 31, 2019		38,200,802	27,197,734	38,200,802,000	27,197,734,000	0
Beginning balance at Mar. 31, 2019	891,329			$ 38	$ 27	$ 0	645,090	276,468	(30,294)	891,329
Increase (Decrease) in Stockholders' Equity
Shares issued (in shares)					1,537,143,000
Shares issued					$ 2		7,662			7,664
Stock compensation vesting							42,299			42,299
Class B shares sold (in shares)				(3,694,497,000)	3,694,497,000
Class B shares sold				$ (4)	$ 4					0
Dividends								(61,426)		(61,426)
Retired shares upon settlement of forward purchase agreement (in shares)		(632,353,000)	(610,943,000)
Retired shares upon settlement of forward purchase agreement		$ (27,809)	$ (29,349)
Conversion of Class B to Class A shares (in shares)				2,297,902,000	(2,297,902,000)
Conversion of Class B to Class A shares				$ 2	$ (2)					0
Shares issued to non-employee directors (in shares)				9,145,000
Shares issued to non-employee directors							369			369
Other shares repurchased/retired/forfeited (in shares)				(632,353,000)	(743,541,000)	0
Other shares repurchased/retired/forfeited					$ (1)	$ 0	(59,297)			(59,298)
Net income	124,779							124,779		124,779
Change in unrealized translation	977								977	977
Total comprehensive income								124,779	977	125,756
Ending balance (in shares) at Dec. 31, 2019		41,817,614	24,079,076	43,569,993		0
Ending balance at Dec. 31, 2019	946,693			$ 44	$ 22	$ 0	636,123	339,821	(29,317)	946,693
Beginning balance (in shares) at Sep. 30, 2019				41,817,614	24,079,076	(252,306,000)
Beginning balance at Sep. 30, 2019				$ 42	$ 24	$ (11,219)	635,362	311,360	(43,705)	891,864
Increase (Decrease) in Stockholders' Equity
Shares issued (in shares)					42,972
Shares issued							1,209			1,209
Stock compensation vesting							14,843			14,843
Class B shares sold (in shares)				(2,108,176)	2,108,176
Class B shares sold				$ (2)	$ 2					0
Dividends								(20,433)		(20,433)
Retired shares upon settlement of forward purchase agreement (in shares)		(97,956,000)	(1,350,000)
Retired shares upon settlement of forward purchase agreement		$ (4,322)	$ (65)
Conversion of Class B to Class A shares (in shares)				(7,653)	7,653
Conversion of Class B to Class A shares										0
Shares issued to non-employee directors (in shares)				2,118
Shares issued to non-employee directors							369			369
Other shares repurchased/retired/forfeited (in shares)				(350,262)	(22,588)	252,306,000
Other shares repurchased/retired/forfeited						$ 11,219	(15,660)			(4,441)
Net income	48,894							48,894		48,894
Change in unrealized translation	14,388								14,388	14,388
Total comprehensive income								48,894	14,388	63,282
Ending balance (in shares) at Dec. 31, 2019		41,817,614	24,079,076	43,569,993		0
Ending balance at Dec. 31, 2019	$ 946,693			$ 44	$ 22	$ 0	$ 636,123	$ 339,821	$ (29,317)	$ 946,693

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ACCUMULATED OTHER COMPREHENSIVE (LOSS) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Accumulated Other Comprehensive Loss
Foreign currency translation adjustment	$ 14,388	$ (2,760)	$ 977	$ (19,038)
Accumulated other comprehensive loss
Accumulated Other Comprehensive Loss
Balance, April 1, 2019			(30,294)
Foreign currency translation adjustment	14,388	$ (2,760)	977	$ (19,038)
Balance, December 31, 2019	$ (29,317)		(29,317)
Accumulated foreign currency adjustment attributable to parent
Accumulated Other Comprehensive Loss
Foreign currency translation adjustment			$ 977

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GOODWILL AND OTHER INTANGIBLE ASSETS - Finite-Lived Intangible Assets, Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 1,913	$ 1,551	$ 5,179	$ 4,461

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Cover Page - shares	9 Months Ended
	Dec. 31, 2019	Feb. 05, 2020
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2019
Document Transition Report	false
Entity File Number	001-37537
Entity Registrant Name	Houlihan Lokey, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	95-2770395
Entity Address, Address Line One	10250 Constellation Blvd.
Entity Address, Address Line Two	5th Floor
Entity Address, City or Town	Los Angeles
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90067
City Area Code	(310)
Local Phone Number	788-5200
Title of 12(b) Security	Class A Common Stock, par value $0.001
Trading Symbol	HLI
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Amendment Flag	false
Entity Central Index Key	0001302215
Current Fiscal Year End Date	--03-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Class A
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		43,887,709
Class B
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		21,678,098

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LEASES - Narrative (Details) $ in Thousands	9 Months Ended
	Dec. 31, 2019 USD ($) lease	Apr. 01, 2019 USD ($)	Mar. 31, 2019 USD ($)
Lessee, Lease, Description [Line Items]
Operating right-of-use assets	$ 129,403	$ 136,900	$ 0
Operating lease liabilities	$ 150,157	$ 152,300	$ 0
Number of operating leases | lease	3
Lease not yet commenced, amount	$ 32,000
Minimum
Lessee, Lease, Description [Line Items]
Operating lease, term of contract	1 year
Operating lease, lease not yet commenced, term of contract	6 years
Maximum
Lessee, Lease, Description [Line Items]
Operating lease, term of contract	17 years
Operating lease, lease not yet commenced, term of contract	16 years

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EMPLOYEE BENEFIT PLANS - Share-Based Incentive Plans (Narrative) (Details)		1 Months Ended	3 Months Ended						9 Months Ended
	Oct. 19, 2017 shares	Aug. 31, 2015 director $ / shares shares	Dec. 31, 2019 USD ($) director $ / shares	Jun. 30, 2019 director $ / shares	Dec. 31, 2018 USD ($) director $ / shares	Jun. 30, 2018 director $ / shares	Jun. 30, 2017 director $ / shares	Jun. 30, 2016 director $ / shares	Dec. 31, 2019 USD ($) $ / shares shares	Dec. 31, 2018 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Excess tax benefits recorded | $			$ 0		$ 0				$ 7,605,000	$ 0
Payments to settle employee tax obligations on share-based awards | $									31,469,000	1,947,000
Compensation expenses | $			16,682,000		$ 13,781,000				47,791,000	$ 44,540,000
Unrecognized compensation cost | $			$ 139,061,000						$ 139,061,000
Unrecognized compensation cost, period for recognition									1 year 2 months 8 days
2006 Incentive Plan | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)									1,368,079,000	1,059,616,000
Aggregate shares granted, price per share (in dollars per share) | $ / shares									$ 47.02	$ 49.35
2016 Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period									4 years
2016 Incentive Plan | Director | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)		37,847
Aggregate shares granted, number of recipients | director		2	1	4	1	3	3
Aggregate shares granted, price per share (in dollars per share) | $ / shares		$ 21	$ 47.21	$ 47.22	$ 42.41	$ 44.50	$ 33.54
2016 Incentive Plan | Director | Restricted Stock | Exercise Price 1
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate shares granted, number of recipients | director								2
Aggregate shares granted, price per share (in dollars per share) | $ / shares								$ 25.21
2016 Incentive Plan | Director | Restricted Stock | Exercise Price 2
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate shares granted, number of recipients | director								1
Aggregate shares granted, price per share (in dollars per share) | $ / shares								$ 23.93
Amended And Restated 2016 Incentive Award Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Increase (reduction) to common stock available for issuance (in shares)	(12,200,000)
Common stock available for issuance (in shares)	8,000,000.0
Class A | April 1, 2018 | Amended And Restated 2016 Incentive Award Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Increase (reduction) to common stock available for issuance (in shares)	6,540,659
Annual increase to number of shares available for issuance (as a percent)	6.00%

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LEASES - Supplemental Cash Flow Information (Details) $ in Thousands	9 Months Ended
	Dec. 31, 2019 USD ($)
Leases [Abstract]
Cash paid for amounts included in the measurement of Operating lease liabilities	$ 17,970
Remeasurement of operating right-of-use assets	$ 5,883

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REVENUE RECOGNITION - Narrative (Details) $ in Millions	3 Months Ended	9 Months Ended
	Dec. 31, 2019 USD ($)	Dec. 31, 2019 USD ($) segment
Revenue from Contract with Customer [Abstract]
Number of Reportable Segments | segment		3
Revenue recognized that was previously included in deferred income | $	$ 3.4	$ 17.8

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INVESTMENT SECURITIES - Schedule of Amortized Cost, Gross Unrealized Gains and Losses, and Fair Value of Securities Held to Maturity (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Mar. 31, 2019
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	$ 90,583
Gross Unrealized Gains	616
Gross Unrealized (Losses)	(4)
Fair Value	91,195
Amortized Cost		$ 124,828
Gross Unrealized Gains		445
Gross Unrealized (Losses)		(15)
Fair Value		125,258
Corporate debt securities
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	36,624
Gross Unrealized Gains	352
Gross Unrealized (Losses)	(3)
Fair Value	36,973
Amortized Cost		116,220
Gross Unrealized Gains		372
Gross Unrealized (Losses)		(15)
Fair Value		116,577
U.S. treasury securities
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	53,959
Gross Unrealized Gains	264
Gross Unrealized (Losses)	(1)
Fair Value	$ 54,222
Amortized Cost		8,608
Gross Unrealized Gains		73
Gross Unrealized (Losses)		0
Fair Value		$ 8,681

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. ("GAAP"), pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC"), and include all information and footnotes required for consolidated financial statement presentation. The results of operations for the nine months ended December 31, 2019 are not necessarily indicative of the results of operations to be expected for the fiscal year ending March 31, 2020. The unaudited interim consolidated financial statements and notes to consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2019 (the "2019 Annual Report").

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries where it has a controlling financial interest. All intercompany balances and transactions have been eliminated in consolidation.

The Company carries its investments in unconsolidated entities over which it has significant influence but does not control using the equity method, and includes its ownership share of the income and losses in Other (income)/expense, net in the Consolidated Statements of Comprehensive Income.

Use of Estimates

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements. Management estimates and assumptions also affect the reported amounts of revenues and expenses during the reporting period, and disclosure of contingent assets and liabilities at the reporting date. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Items subject to such estimates and assumptions include, but are not limited to: the allowance for doubtful accounts; the valuation of deferred tax assets, goodwill, accrued expenses, and share based compensation; the allocation of goodwill and other assets across the reporting units (segments); and reserves for income tax uncertainties and other contingencies.

Revenue, Operating Expenses

Revenues

Revenues consist of fee revenues from advisory services and reimbursed costs incurred in fulfilling the contract. Revenues reflect fees generated from our CF, FR, and FVA business segments. See Note 3 for additional information.

Operating Expenses

The majority of the Company’s operating expenses are related to compensation for employees, which includes the amortization of the relevant portion of the Company’s share-based incentive plans (Note 14). Other types of operating expenses include: Travel, meals, and entertainment; Rent; Depreciation and amortization; Information technology and communications; Professional fees; and Other operating expenses

Translation of Foreign Currency Transactions

Translation of Foreign Currency Transactions

The reporting currency for the consolidated financial statements of the Company is the U.S. dollar. The assets and liabilities of subsidiaries whose functional currency is other than the U.S. dollar are included in the consolidation by translating the assets and liabilities at the reporting period-end exchange rates; however, revenues and expenses are translated using the applicable exchange rates determined on a monthly basis throughout the fiscal year. Resulting translation adjustments are reported as a separate component of accumulated other comprehensive loss, net of applicable taxes.

Cash and Cash Equivalents, and Restricted Cash

Cash and Cash Equivalents, and Restricted Cash

Cash and cash equivalents include cash held at banks and highly liquid investments with original maturities of three months or less. As of December 31, 2019 and March 31, 2019, the Company had cash balances with banks in excess of insured limits. The Company believes it is not exposed to any significant credit risk with respect to Cash and cash equivalents.

The following table provides a reconciliation of Cash and cash equivalents, and Restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows.     

	December 31, 2019		March 31, 2019
Cash and cash equivalents	$	276,735	$	285,746
Restricted cash (1)	373		369
Total cash, cash equivalents, and restricted cash	$	277,108	$	286,115

(1)

Restricted cash as of December 31, 2019 and March 31, 2019 consisted of a cash secured letter of credit issued for our Frankfurt office.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

The Financial Accounting Standards Board (the “FASB”) issued the following authoritative guidance amending the FASB Accounting Standards Codification (“ASC”).

On April 1, 2019, we adopted Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), and all related amendments. See Note 16 for additional information.

In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting, which clarifies when changes to the terms or conditions of share-based payment awards require an entity to apply modification accounting. The amended guidance states an entity should account for the effects of a modification unless certain criteria are met, which include that the modified award has the same fair value, vesting conditions and classification as the original award. The Company adopted guidance effective April 1, 2019 and its application did not have a material impact on the consolidated financial statements and related disclosures.

In June 2016, the FASB issued ASU 2016-13 Financial Instruments-Credit Losses - Measurement of Credit Losses on Financial Instruments. The amended guidance involves several aspects of the accounting for credit losses related to certain financial assets that are not accounted for at fair value through net income and includes trade receivables and net investments in leases. The new guidance and subsequent updates, broadens the information that an entity must consider in developing its estimated credit losses expected to occur over the remaining life of assets measured either collectively or individually to include historical experience, current conditions and reasonable and supportable forecasts, replacing the existing incurred credit loss model and other models with the Current Expected Credit Losses (“CECL”) model.  The new guidance expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating credit losses and requires new disclosures of the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination. This new guidance is first effective for our fiscal year beginning on April 1, 2020 and will be adopted under a modified retrospective approach. We are evaluating the impact the adoption of this new guidance will have on our financial position and results of operations, which will depend on, among other things, the current and expected macroeconomic conditions and the nature and characteristics of financial assets held by us on the date of adoption.

In 2019, ASU 2019-01, Leases - Topic 842: Codification Improvements became effective, but there was no quantitative or qualitative effect on our financial statements

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LEASES

9 Months Ended

Dec. 31, 2019

Leases [Abstract]

LEASES

Leases

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). We adopted the standard effective April 1, 2019, using the modified retrospective approach applied as of the beginning of the period of adoption. The Company elected to utilize transition guidance within the new standard that permits us to (i) continue to report under ASC 840 guidance for comparative periods consistent with previously issued financial statements; and (ii) carryforward our prior conclusions about lease identification, classification, and initial direct costs. The most significant impact of this adoption relates to the recognition of right-of-use ("ROU") assets and liabilities for all leases classified operating leases when the Company is the lessee in the arrangement. Currently, the Company does not have any lessor arrangements; therefore, adoption of the standard did not impact our accounting.

We assess whether an arrangement is or contains a lease at the inception of the agreement. ROU assets represent our right to use underlying assets for the lease term and lease liabilities represent our obligation to make lease payments arising from leases. ROU assets and lease liabilities are recognized at the commencement date based on the present value of future lease payments over the lease terms utilizing the discount rate implicit in the leases. If the discount rate implicit in the leases is not readily determinable, the present value of future lease payments is calculated utilizing the Company’s incremental borrowing rate, which approximates the interest that the Company would have to pay on a secured loan. The Company elected to utilize a portfolio approach and applies the rates to a portfolio of leases with similar terms and economic environments. The terms of our leases used to determine the ROU asset and lease liability account for options to extend when it is reasonably certain that we will exercise those options, if applicable. ROU assets and lease liabilities are subject to adjustment in the event of modification to lease terms, changes in probability that an option to extend or terminate a lease would be exercised and other factors. In addition, ROU assets are periodically reviewed for impairment.

Lease expense is recognized on a straight-line basis over the lease terms. Lease expense includes amortization of the ROU assets and accretion of the lease liabilities. Amortization of ROU assets is calculated as the periodic lease cost less accretion of the lease liability. The amortized period for ROU assets is limited to the expected lease term.

The Company has elected a practical expedient to combine the lease and non-lease components into a single lease component. The Company also elected the short-term lease measurement and recognition exemption and does not establish ROU assets or lease liabilities for operating leases with terms of 12 months or less.

On adoption, the Company recognized the present value of its existing minimum lease payments as a $136.9 million ROU asset and a $152.3 million lease liability. The difference between the ROU asset and the lease liability on adoption primarily arises from previously recorded deferred rent, which was effectively reclassified to the ROU asset on adoption. As a result, there was no impact to retained earnings in the Consolidated Balance Sheets.

Lessee Arrangements

Operating Leases

We lease real estate and equipment used in operations from third parties. As of December 31, 2019, the remaining term of our operating leases ranged from 1 to 17 years with various automatic extensions.

The following table outlines the maturity of our existing operating lease liabilities on a fiscal year-end basis as of December 31, 2019.

	Operating Leases
Remaining 2020	$	7,928
2021	27,990
2022	23,595
2023	19,587
2024	14,787
Thereafter	87,024
Total	180,911
Less: present value discount	(30,754		)
Operating lease liabilities	$	150,157

As of December 31, 2019, the Company entered into three additional office space operating leases that have not yet commenced, for approximately $32.0 million. These operating leases will commence before fiscal year 2021 with lease terms of 6 to 16 years.

Lease costs

	Three Months Ended December 31, 2019			Nine Months Ended December 31, 2019
Operating lease expense	$	6,466		$	21,729
Variable lease expense (1)	2,999			12,675
Short-term lease expense	114			195
Less: Sublease income	(48		)	(145		)
Total lease costs	$	9,531		$	34,454

^{(1)  Primarily consists of payments for property taxes, common area maintenance and usage based operating costs.}  

Weighted-average details

	December 31, 2019
Weighted-average remaining lease term (years)	9
Weighted-average discount rate	4.1	%

Supplemental cash flow information related to leases:

	Nine Months Ended December 31, 2019
Operating cash flows:
Cash paid for amounts included in the measurement of Operating lease liabilities	$	17,970
Non-cash activity:
Change in operating right-of-use assets due to remeasurement	$	5,883

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SEGMENT AND GEOGRAPHICAL INFORMATION - Revenue and Assets by Segment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Mar. 31, 2019
Segment Reporting Information [Line Items]
Revenues	$ 333,515	$ 298,013	$ 856,674	$ 793,007
Segment profit	94,049	79,819	238,951	219,605
Corporate expenses	265,499	235,770	695,728	634,461
Other (income)/expense, net	(1,039)	(688)	(3,787)	(3,301)
Income before provision for income taxes	69,055	62,931	164,733	161,847
Total assets	1,538,630		1,538,630		$ 1,425,912
Operating Segments
Segment Reporting Information [Line Items]
Total assets	728,266		728,266		716,036
Operating Segments | Corporate Finance
Segment Reporting Information [Line Items]
Revenues	201,137	183,965	490,707	462,893
Segment profit	58,495	62,388	138,611	146,287
Total assets	433,663		433,663		403,928
Operating Segments | Financial Restructuring
Segment Reporting Information [Line Items]
Revenues	92,808	75,013	249,438	218,173
Segment profit	28,391	11,129	75,956	52,932
Total assets	167,357		167,357		184,364
Operating Segments | Financial Advisory Services
Segment Reporting Information [Line Items]
Revenues	39,570	39,035	116,529	111,941
Segment profit	7,163	6,302	24,384	20,386
Total assets	127,246		127,246		127,744
Corporate, Non-Segment
Segment Reporting Information [Line Items]
Corporate expenses	26,033	17,576	78,005	61,059
Total assets	810,364		810,364		$ 709,876
Segment Reconciling Items
Segment Reporting Information [Line Items]
Other (income)/expense, net	$ (1,039)	$ (688)	$ (3,787)	$ (3,301)

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LEASES - Maturity of Existing Operating Leases (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Apr. 01, 2019	Mar. 31, 2019
Leases [Abstract]
Remaining 2020	$ 7,928
2021	27,990
2022	23,595
2023	19,587
2024	14,787
Thereafter	87,024
Total	180,911
Less: present value discount	(30,754)
Operating lease liabilities	$ 150,157	$ 152,300	$ 0

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EMPLOYEE BENEFIT PLANS - Activity in Equity Classified Share Awards (Details) - 2006 Incentive Plan - Restricted Stock - $ / shares shares in Thousands	9 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Shares
Beginning balance (in shares)	3,763,984	2,854,893
Granted (in shares)	1,368,079	1,059,616
Vested (in shares)	(1,496,315)	(76,702)
Forfeited/Repurchased (in shares)	(81,008)	(57,797)
Ending balance (in shares)	3,554,740	3,780,010
Weighted Average Grant Date Fair Value
Beginning balance (in dollars per share)	$ 32.29	$ 26.39
Granted (in dollars per share)	47.02	49.35
Vested (in dollars per share)	29.30	48.78
Forfeited/Repurchased (in dollars per share)	38.56	33.16
Ending balance (in dollars per share)	$ 39.13	$ 32.28

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018
Accounting Policies [Abstract]
Cash and cash equivalents	$ 276,735	$ 285,746
Restricted cash	373	369
Total cash, cash equivalents, and restricted cash	$ 277,108	$ 286,115	$ 256,769	$ 300,223

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FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Mar. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total asset measured at fair value	$ 91,195	$ 125,258
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total asset measured at fair value	0	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total asset measured at fair value	91,195	125,258
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total asset measured at fair value	0	0
Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total asset measured at fair value	36,973	116,577
Corporate debt securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total asset measured at fair value	0	0
Corporate debt securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total asset measured at fair value	36,973	116,577
Corporate debt securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total asset measured at fair value		0
U.S. treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total asset measured at fair value	54,222	8,681
U.S. treasury securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total asset measured at fair value	0	0
U.S. treasury securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total asset measured at fair value	$ 54,222	8,681
U.S. treasury securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total asset measured at fair value		$ 0

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Schedule of Cash and Cash Equivalents

The following table provides a reconciliation of Cash and cash equivalents, and Restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows.     

	December 31, 2019		March 31, 2019
Cash and cash equivalents	$	276,735	$	285,746
Restricted cash (1)	373		369
Total cash, cash equivalents, and restricted cash	$	277,108	$	286,115

(1)

Restricted cash as of December 31, 2019 and March 31, 2019 consisted of a cash secured letter of credit issued for our Frankfurt office.

Schedule of Restricted Cash

The following table provides a reconciliation of Cash and cash equivalents, and Restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows.     

	December 31, 2019		March 31, 2019
Cash and cash equivalents	$	276,735	$	285,746
Restricted cash (1)	373		369
Total cash, cash equivalents, and restricted cash	$	277,108	$	286,115

(1)

Restricted cash as of December 31, 2019 and March 31, 2019 consisted of a cash secured letter of credit issued for our Frankfurt office.

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Dec. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Commitments and Contingencies

The Company has been named in various legal actions arising in the normal course of business. In the opinion of the Company, in consultation with legal counsel, the final resolutions of these matters are not expected to have a material adverse effect on the Company’s financial condition, operations and cash flows.

The Company also provides routine indemnifications relating to certain real estate (office) lease agreements under which it may be required to indemnify property owners for claims and other liabilities arising from the Company’s use of the applicable premises. In addition, the Company guarantees the performance of its subsidiaries under certain office lease agreements. The terms of these obligations vary, and because a maximum obligation is not explicitly stated, the Company has determined that it is not possible to make an estimate of the maximum amount that it could be obligated to pay under such contracts. Based on historical experience and evaluation of specific indemnities, management believes that judgments, if any, against the Company related to such matters are not likely to have a material effect on the consolidated financial statements. Accordingly, the Company has not recorded any liability for these obligations as of December 31, 2019 or March 31, 2019.

There have been no material changes outside of the ordinary course of business to our known contractual obligations, which are set forth in the table included in Item 7 in our 2019 Annual Report.

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PROPERTY AND EQUIPMENT (Tables)

9 Months Ended

Dec. 31, 2019

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment, net of accumulated depreciation consist of the following:

	December 31, 2019			March 31, 2019
Equipment	$	8,838		$	7,916
Furniture and fixtures	21,953			19,445
Leasehold improvements	42,577			34,370
Computers and software	17,552			11,499
Other	1,117			1,117
Total cost	92,037			74,347
Less: accumulated depreciation	(50,481		)	(43,313		)
Total net book value	$	41,556		$	31,034

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EARNINGS PER SHARE (Tables)

9 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

Calculation of Basic and Diluted Net Income Per Share

The calculations of basic and diluted earnings per share attributable to holders of shares of common stock are presented below.

	Three Months Ended December 31,				Nine Months Ended December 31,
	2019		2018		2019		2018
Numerator:
Net income attributable to holders of shares of common stock—basic	$	48,894	$	43,957	$	124,779	$	113,758
Net income attributable to holders of shares of common stock—diluted	$	48,894	$	43,957	$	124,779	$	113,758
Denominator:
Weighted average shares of common stock outstanding—basic	62,014,564		61,972,027		62,199,716		62,399,221
Weighted average number of incremental shares issuable from unvested restricted stock and restricted stock units, as calculated using the treasury stock method	3,593,462		3,786,652		3,570,340		3,586,439
Weighted average shares of common stock outstanding—diluted	65,608,026		65,758,679		65,770,056		65,985,660
Basic earnings per share	$	0.79	$	0.71	$	2.01	$	1.82
Diluted earnings per share	$	0.75	$	0.67	$	1.90	$	1.72

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EARNINGS PER SHARE

9 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

EARNINGS PER SHARE

Earnings Per Share

The calculations of basic and diluted earnings per share attributable to holders of shares of common stock are presented below.

	Three Months Ended December 31,				Nine Months Ended December 31,
	2019		2018		2019		2018
Numerator:
Net income attributable to holders of shares of common stock—basic	$	48,894	$	43,957	$	124,779	$	113,758
Net income attributable to holders of shares of common stock—diluted	$	48,894	$	43,957	$	124,779	$	113,758
Denominator:
Weighted average shares of common stock outstanding—basic	62,014,564		61,972,027		62,199,716		62,399,221
Weighted average number of incremental shares issuable from unvested restricted stock and restricted stock units, as calculated using the treasury stock method	3,593,462		3,786,652		3,570,340		3,586,439
Weighted average shares of common stock outstanding—diluted	65,608,026		65,758,679		65,770,056		65,985,660
Basic earnings per share	$	0.79	$	0.71	$	2.01	$	1.82
Diluted earnings per share	$	0.75	$	0.67	$	1.90	$	1.72

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GOODWILL AND OTHER INTANGIBLE ASSETS

9 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and Other Intangible Assets

Goodwill represents an acquired company’s acquisition cost over the fair value of acquired net tangible and intangible assets. Goodwill is the net asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Intangible assets identified and accounted for include tradenames and marks, backlog, developed technologies, and customer relationships. Those intangible assets with finite lives, including backlog and customer relationships, are amortized over their estimated useful lives.

Goodwill is reviewed annually for impairment and more frequently if potential impairment indicators exist. Goodwill is reviewed for impairment in accordance with Accounting Standards Update ("ASU") No. 2011-08, Testing Goodwill for Impairment, which permits management to make a qualitative assessment of whether it is more likely than not that one of its reporting unit’s fair value is less than its carrying amount before applying the two-step goodwill impairment test. If management concludes that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then management would not be required to perform the two-step impairment test for that reporting unit. If the assessment indicates that it is more likely than not that the reporting unit’s fair value is less than its carrying value, management must test further for impairment utilizing a two-step process. Step 1 compares the estimated fair value of the reporting unit with its carrying value, including goodwill. If the carrying value of the reporting unit exceeds the estimated fair value, an impairment exists and is measured in Step 2 as the excess of the recorded amount of goodwill over the implied fair value of goodwill resulting from the valuation of the reporting unit. Impairment testing of goodwill requires a significant amount of judgment in assessing qualitative factors and estimating the fair value of the reporting unit, if necessary. The fair value is determined using an estimated market value approach, which considers estimates of future after tax cash flows, including a terminal value based on market earnings multiples, discounted at an appropriate market rate. As of December 31, 2019, management concluded that it was not more likely than not that the Company’s reporting units’ fair value was less than their carrying amount and no further impairment testing had been considered necessary.

Indefinite-lived intangible assets are reviewed annually for impairment in accordance with ASU 2012-02, Testing Indefinite-lived Intangible Assets for Impairment, which provides management the option to perform a qualitative assessment. If it is more likely than not that the asset is impaired, the amount that the carrying value exceeds the fair value is recorded as an impairment expense. As of December 31, 2019, management concluded that it was not more likely than not that the fair values were less than the carrying values.

Intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group (inclusive of other long-lived assets) be tested for possible impairment, management first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. As of December 31, 2019, no events or changes in circumstances were identified that indicated that the carrying amount of the finite-lived intangible assets were not recoverable.

The following table provides a reconciliation of Goodwill and other intangibles, net reported on the Consolidated Balance Sheets.

	Useful Lives	December 31, 2019			March 31, 2019
Goodwill (1)	Indefinite	$	626,519		$	594,812
Tradename-Houlihan Lokey (1)	Indefinite	192,210			192,210
Other intangible assets	Varies	18,217			18,614
Total cost		836,946			805,636
Less: accumulated amortization		(14,214		)	(11,032		)
Goodwill and other intangibles, net		$	822,732		$	794,604
Deferred tax liability (1)		(51,676		)	(51,676		)
Total net book value, after taxes		$	771,056		$	742,928

(1) When HL CA was acquired by Fram in January 2006, approximately $392,600 of goodwill and $192,210 of indefinite-lived intangible assets were generated and recognized. In accordance with ASC Topic 805, Business Combinations, since HL CA was wholly owned by Fram, this goodwill and all other purchase accounting-related adjustments were pushed down to the Company’s reporting level. Through both foreign and domestic acquisitions made directly by HL CA and the Company since 2006, additional goodwill of approximately $233,919, inclusive of foreign currency translations, has been recognized.

Amortization expense of approximately $1,913 and $1,551 was recognized for the three months ended December 31, 2019 and 2018, respectively, and $5,179 and $4,461 was recognized for the nine months ended December 31, 2019 and 2018, respectively.

The estimated future amortization for amortizable intangible assets for each of the next five years are as follows:

	Year Ended March 31,
Remainder of 2020	$	2,007
2021	1,419
2022	157
2023	7
2024	7

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FAIR VALUE MEASUREMENTS

9 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

Fair Value Measurements

The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels in accordance with ASC Topic 820, Fair Value Measurement:

• Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

• Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

• Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

For Level 3 investments in which pricing inputs are unobservable and limited market activity exists, management's determination of fair value is based upon the best information available and may incorporate management's own assumptions or involve a significant degree of judgment.

The following methods and assumptions were used by the Company in estimating fair value disclosures:

• Corporate debt securities: All fair value measurements are obtained from a third-party pricing service and are not adjusted by management.

• U.S. treasury securities: Fair values for U.S. treasury securities are based on quoted prices from recent trading activity of identical or similar securities. All fair value measurements are obtained from a third-party pricing service and are not adjusted by management.

The following table presents information about the Company's financial assets, and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair values:

	December 31, 2019
	Level 1		Level 2		Level 3		Total
Corporate debt securities	$	—	$	36,973	$	—	$	36,973
U.S. treasury securities	—		54,222		—		54,222
Total asset measured at fair value	$	—	$	91,195	$	—	$	91,195

	March 31, 2019
	Level 1		Level 2		Level 3		Total
Corporate debt securities	$	—	$	116,577	$	—	$	116,577
U.S. treasury securities	—		8,681		—		8,681
Total asset measured at fair value	$	—	$	125,258	$	—	$	125,258

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given investment is based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors specific to the instrument.

The Company had no transfers between fair value levels during the nine months ended December 31, 2019.

The fair values of the financial instruments represent the amounts that would be received to sell assets or that would be paid to transfer liabilities in an orderly transaction between market participants as of a specified date. Fair value measurements maximize the use of observable inputs; however, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects the Company’s own judgments about the assumptions that market participants would use in pricing the asset or liability. Those judgments are developed by the Company based on the best information available in the circumstances, including expected cash flows and appropriately risk-adjusted discount rates, as well as available observable and unobservable inputs.

The carrying value of Cash and cash equivalents, Restricted cash, Accounts receivable, Unbilled work in process, Receivables from affiliates, Accounts payable and accrued expenses, and Deferred income approximates fair value due to the short maturity of these instruments.

The carrying value of the loans to employees included in Other assets, Loans payable to former shareholders and an unsecured loan which is included in Loan payable to non-affiliate, approximates fair value due to the variable interest rate borne by those instruments.

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SEGMENT AND GEOGRAPHICAL INFORMATION - Revenue and Assets by Geographical Areas (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Mar. 31, 2019
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 333,515	$ 298,013	$ 856,674	$ 793,007
Total assets	1,538,630		1,538,630		$ 1,425,912
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	294,083	228,825	740,520	643,111
Total assets	1,052,168		1,052,168		1,021,975
International
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	39,432	$ 69,188	116,154	$ 149,896
Total assets	$ 486,462		$ 486,462		$ 403,937

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Income Statement [Abstract]
Revenues	$ 333,515	$ 298,013	$ 856,674	$ 793,007
Operating expenses:
Employee compensation and benefits	213,107	187,180	551,056	501,682
Travel, meals, and entertainment	12,943	12,991	32,760	32,689
Rent	9,531	9,987	34,454	28,612
Depreciation and amortization	4,336	3,635	12,280	10,809
Information technology and communications	7,225	5,775	19,477	16,073
Professional fees	6,204	6,087	16,494	18,148
Other operating expenses	12,153	10,115	29,207	26,448
Total operating expenses	265,499	235,770	695,728	634,461
Operating income	68,016	62,243	160,946	158,546
Other (income)/expense, net	(1,039)	(688)	(3,787)	(3,301)
Income before provision for income taxes	69,055	62,931	164,733	161,847
Provision for income taxes	20,161	18,974	39,954	48,089
Net income	48,894	43,957	124,779	113,758
Other comprehensive income, net of tax:
Foreign currency translation adjustments	14,388	(2,760)	977	(19,038)
Comprehensive income	$ 63,282	$ 41,197	$ 125,756	$ 94,720
Weighted average shares of common stock outstanding:
Basic (in shares)	62,014,564	61,972,027	62,199,716	62,399,221
Fully Diluted (in shares)	65,608,026	65,758,679	65,770,056	65,985,660
Net income per share of common stock
Basic (in dollars per share)	$ 0.79	$ 0.71	$ 2.01	$ 1.82
Fully Diluted (in dollars per share)	$ 0.75	$ 0.67	$ 1.90	$ 1.72

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INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 20,161	$ 18,974	$ 39,954	$ 48,089
Effective tax rate	29.20%	30.20%	24.30%	29.70%

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GOODWILL AND OTHER INTANGIBLE ASSETS - Finite-Lived Intangible Assets, Amortization Expense, Fiscal Year Maturity (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Year Ended March 31,
Remainder of 2020	$ 2,007
2021	1,419
2022	157
2023	7
2024	$ 7

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. ("GAAP"), pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC"), and include all information and footnotes required for consolidated financial statement presentation. The results of operations for the nine months ended December 31, 2019 are not necessarily indicative of the results of operations to be expected for the fiscal year ending March 31, 2020. The unaudited interim consolidated financial statements and notes to consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2019 (the "2019 Annual Report").

Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year. These reclassifications had no impact on net income, shareholders' equity or cash flows as previously reported.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries where it has a controlling financial interest. All intercompany balances and transactions have been eliminated in consolidation.

The Company carries its investments in unconsolidated entities over which it has significant influence but does not control using the equity method, and includes its ownership share of the income and losses in Other (income)/expense, net in the Consolidated Statements of Comprehensive Income.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements. Management estimates and assumptions also affect the reported amounts of revenues and expenses during the reporting period, and disclosure of contingent assets and liabilities at the reporting date. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Items subject to such estimates and assumptions include, but are not limited to: the allowance for doubtful accounts; the valuation of deferred tax assets, goodwill, accrued expenses, and share based compensation; the allocation of goodwill and other assets across the reporting units (segments); and reserves for income tax uncertainties and other contingencies.

Revenues

Revenues consist of fee revenues from advisory services and reimbursed costs incurred in fulfilling the contract. Revenues reflect fees generated from our CF, FR, and FVA business segments. See Note 3 for additional information.

Operating Expenses

The majority of the Company’s operating expenses are related to compensation for employees, which includes the amortization of the relevant portion of the Company’s share-based incentive plans (Note 14). Other types of operating expenses include: Travel, meals, and entertainment; Rent; Depreciation and amortization; Information technology and communications; Professional fees; and Other operating expenses.

Translation of Foreign Currency Transactions

The reporting currency for the consolidated financial statements of the Company is the U.S. dollar. The assets and liabilities of subsidiaries whose functional currency is other than the U.S. dollar are included in the consolidation by translating the assets and liabilities at the reporting period-end exchange rates; however, revenues and expenses are translated using the applicable exchange rates determined on a monthly basis throughout the fiscal year. Resulting translation adjustments are reported as a separate component of accumulated other comprehensive loss, net of applicable taxes.

From time to time, we enter into transactions to hedge our exposure to certain foreign currency fluctuations through the use of derivative instruments or other methods. As of December 31, 2019, we had two foreign currency forward contracts outstanding, one between the pound sterling and the U.S. dollar with a notional value of $5.0 million and one between the pound sterling and the euro with a notional value of €1.0 million. The fair value of these contracts represented a net gain included in Other operating expenses of $30 during the three months ended December 31, 2019. We had no foreign currency forward contracts outstanding as of December 31, 2018.

Cash and Cash Equivalents, and Restricted Cash

Cash and cash equivalents include cash held at banks and highly liquid investments with original maturities of three months or less. As of December 31, 2019 and March 31, 2019, the Company had cash balances with banks in excess of insured limits. The Company believes it is not exposed to any significant credit risk with respect to Cash and cash equivalents.

The following table provides a reconciliation of Cash and cash equivalents, and Restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows.     

	December 31, 2019		March 31, 2019
Cash and cash equivalents	$	276,735	$	285,746
Restricted cash (1)	373		369
Total cash, cash equivalents, and restricted cash	$	277,108	$	286,115

(1) Restricted cash as of December 31, 2019 and March 31, 2019 consisted of a cash secured letter of credit issued for our Frankfurt office.

Recent Accounting Pronouncements

The Financial Accounting Standards Board (the “FASB”) issued the following authoritative guidance amending the FASB Accounting Standards Codification (“ASC”).

On April 1, 2019, we adopted Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), and all related amendments. See Note 16 for additional information.

In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting, which clarifies when changes to the terms or conditions of share-based payment awards require an entity to apply modification accounting. The amended guidance states an entity should account for the effects of a modification unless certain criteria are met, which include that the modified award has the same fair value, vesting conditions and classification as the original award. The Company adopted guidance effective April 1, 2019 and its application did not have a material impact on the consolidated financial statements and related disclosures.

In June 2016, the FASB issued ASU 2016-13 Financial Instruments-Credit Losses - Measurement of Credit Losses on Financial Instruments. The amended guidance involves several aspects of the accounting for credit losses related to certain financial assets that are not accounted for at fair value through net income and includes trade receivables and net investments in leases. The new guidance and subsequent updates, broadens the information that an entity must consider in developing its estimated credit losses expected to occur over the remaining life of assets measured either collectively or individually to include historical experience, current conditions and reasonable and supportable forecasts, replacing the existing incurred credit loss model and other models with the Current Expected Credit Losses (“CECL”) model.  The new guidance expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating credit losses and requires new disclosures of the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination. This new guidance is first effective for our fiscal year beginning on April 1, 2020 and will be adopted under a modified retrospective approach. We are evaluating the impact the adoption of this new guidance will have on our financial position and results of operations, which will depend on, among other things, the current and expected macroeconomic conditions and the nature and characteristics of financial assets held by us on the date of adoption.

In 2019, ASU 2019-01, Leases - Topic 842: Codification Improvements became effective, but there was no quantitative or qualitative effect on our financial statements.