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, 2020

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.

5th 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 2, 2021, the registrant had 51,518,175 shares of Class A common stock, $0.001 par value per share, and 17,432,975 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	28
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	36
Item 4.	Controls and Procedures	37
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	38
Item 4.	Mine Safety Disclosures	38
Item 5.	Other Information	38
Item 6.	Exhibits	39
Signatures		40

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, 2020		March 31, 2020
Assets
Cash and cash equivalents	$	633,659	$	380,373
Restricted cash	373		373
Investment securities	234,576		135,389
Accounts receivable, net of allowance for credit losses of $7,949 and $5,587, respectively	78,969		80,912
Unbilled work in process, net of allowance for credit losses of $1,853 and $1,302, respectively	53,074		39,821
Income taxes receivable	—		4,282
Deferred income taxes	9,564		6,507
Property and equipment, net	46,167		42,372
Operating lease right-of-use assets	145,367		135,240
Goodwill and other intangibles, net	866,438		812,844
Other assets	51,612		38,890
Total assets	$	2,119,799	$	1,677,003
Liabilities and Stockholders' Equity
Liabilities:
Accrued salaries and bonuses	$	436,438	$	420,376
Accounts payable and accrued expenses	55,035		53,883
Deferred income	37,008		26,780
Income taxes payable	19,851		—
Deferred income taxes	35		664
Loans payable to former shareholders	1,007		1,393
Loan payable to non-affiliate	—		3,283
Operating lease liabilities	168,567		154,218
Other liabilities	47,592		32,024
Total liabilities	765,533		692,621
Commitments and contingencies (Note 17)
Stockholders' equity:
Class A common stock, $0.001 par value. Authorized 1,000,000,000 shares; issued and outstanding 51,623,683 and 46,178,633 shares, respectively	52		46
Class B common stock, $0.001 par value. Authorized 1,000,000,000 shares; issued and outstanding 17,472,592 and 19,345,277 shares, respectively	17		19
Additional paid-in capital	851,444		649,954
Retained earnings	523,454		377,471
Accumulated other comprehensive (loss)	(20,701)		(43,108)
Total stockholders' equity	1,354,266		984,382
Total liabilities and stockholders' equity	$	2,119,799	$	1,677,003

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)	2020		2019		2020		2019
Revenues	$	537,876	$	333,515	$	1,024,748	$	856,674
Operating expenses:
Employee compensation and benefits	339,743		213,107		654,113		551,056
Travel, meals, and entertainment	1,338		12,943		4,416		32,760
Rent	10,086		9,531		30,010		34,454
Depreciation and amortization	3,949		4,336		11,291		12,280
Information technology and communications	9,281		7,225		22,532		19,477
Professional fees	6,188		6,204		16,422		16,494
Other operating expenses	8,875		12,153		18,083		29,207
Total operating expenses	379,460		265,499		756,867		695,728
Operating income	158,416		68,016		267,881		160,946
Other (income)/expense, net	(187)		(1,039)		(1,544)		(3,787)
Income before provision for income taxes	158,603		69,055		269,425		164,733
Provision for income taxes	40,088		20,161		56,020		39,954
Net income	$	118,515	$	48,894	$	213,405	$	124,779
Other comprehensive income, net of tax:
Foreign currency translation adjustments	14,037		14,388		22,407		977
Comprehensive income	$	132,552	$	63,282	$	235,812	$	125,756
Attributable to Houlihan Lokey, Inc. common stockholders:
Weighted average shares of common stock outstanding:
Basic	66,547,587		62,014,564		65,680,516		62,199,716
Fully diluted	69,356,347		65,608,026		68,596,503		65,770,056
Earnings per share (Note 13)
Basic	$	1.78	$	0.79	$	3.25	$	2.01
Fully diluted	$	1.71	$	0.75	$	3.11	$	1.90

See accompanying Notes to Consolidated Financial Statements

2

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(UNAUDITED)

	Class A common stock			Class B common stock			Treasury stock			Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Total stockholders' equity
(In thousands, except share data)	Shares	$		Shares	$		Shares	$		$		$		$		$
Balances – October 1, 2020	51,506,192	$	52	18,255,244	$	18	(392,673)	(22,711)		$	880,370	$	427,621	$	(34,738)	$	1,250,612
Shares issued	—	—		31,153	—		—	—		1,701		—		—		1,701
Stock compensation vesting (Note 14)	—	—		—	—		—	—		10,694		—		—		10,694
Dividends	—	—		—	—		—	—		—		(22,682)		—		(22,682)
Conversion of Class B to Class A shares	790,025	1		(790,025)	(1)		—	—		—		—		—		—
Shares issued to non-employee directors (Note 14)	3,174	—		—	—		—	—		—		—		—		—
Other shares repurchased/forfeited	(675,708)	(1)		(23,780)	—		392,673	22,711		(41,321)		—		—		(18,611)
Net income	—	—		—	—		—	—		—		118,515		—		118,515
Change in unrealized translation	—	—		—	—		—	—		—		—		14,037		14,037
Total comprehensive income	—	—		—	—		—	—		—		118,515		14,037		132,552
Balances – December 31, 2020	51,623,683	$	52	17,472,592	$	17	—	$	—	$	851,444	$	523,454	$	(20,701)	$	1,354,266

	Class A common stock			Class B common stock			Treasury stock			Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Total stockholders' equity
(In thousands, except share data)	Shares	$		Shares	$		Shares	$		$		$		$		$
Balances – October 1, 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/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

See accompanying Notes to Consolidated Financial Statements

3

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(UNAUDITED)

	Class A common stock			Class B common stock			Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Total stockholders' equity
(In thousands, except share data)	Shares	$		Shares	$		$		$		$		$
Balances – April 1, 2020	46,178,633	$	46	19,345,277	$	19	$	649,954	$	377,471	$	(43,108)	$	984,382
Cumulative effect of the change in accounting principle related to credit losses, net of tax	—	—		—	—		—		(682)		—		(682)
Shares issued	3,000,000	3		1,596,243	2		223,168		—		—		223,173
Stock compensation vesting (Note 14)	—	—		—	—		37,601		—		—		37,601
Dividends	—	—		—	—		—		(66,740)		—		(66,740)
Conversion of Class B to Class A shares	3,121,294	3		(3,121,294)	(3)		—		—		—		—
Shares issued to non-employee directors (Note 14)	8,751	—		—	—		333		—		—		333
Other shares repurchased/forfeited	(684,995)	—		(347,634)	(1)		(59,612)		—		—		(59,613)
Net income	—	—		—	—		—		213,405		—		213,405
Change in unrealized translation	—	—		—	—		—		—		22,407		22,407
Total comprehensive income	—	—		—	—		—		213,405		22,407		235,812
Balances – December 31, 2020	51,623,683	$	52	17,472,592	$	17	$	851,444	$	523,454	$	(20,701)	$	1,354,266

	Class A common stock			Class B common stock			Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Total stockholders' equity
(In thousands, except share data)	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/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

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)	2020		2019
Cash flows from operating activities:
Net income	$	213,405	$	124,779
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income taxes	(1,997)		(9,283)
Provision for bad debts, net	4,829		72
Unrealized gains on investment securities	(593)		(182)
Non-cash lease expense	17,023		11,469
Depreciation and amortization	11,291		12,280
Compensation expense – equity and liability classified share awards (Note 14)	46,779		47,791
Changes in operating assets and liabilities:
Accounts receivable	(1,064)		9,815
Unbilled work in process	(13,485)		4,287
Other assets	(12,444)		(4,152)
Accrued salaries and bonuses	18,101		(85,018)
Accounts payable and accrued expenses and other	(9,223)		3,245
Deferred income	10,131		58
Income taxes payable	24,431		(4,403)
Net cash provided by operating activities	307,184		110,758
Cash flows from investing activities:
Purchases of investment securities	(294,196)		(248,176)
Sales or maturities of investment securities	195,601		282,422
Acquisition of business, net of cash acquired	(12,470)		(2,197)
Receivables from affiliates	—		(170)
Purchase of property and equipment, net	(11,002)		(16,971)
Net cash provided by/(used in) investing activities	(122,067)		14,908
Cash flows from financing activities:
Dividends paid	(70,302)		(61,104)
Share repurchases	(41,814)		(27,828)
Payments to settle employee tax obligations on share-based awards	(17,810)		(31,469)
Proceeds from issuance of Class A shares	189,060		—
Loans payable to former shareholders redeemed	(386)		(446)
Repayments of loans to non-affiliates	(1,900)		(10,786)
Other financing activities	333		369
Net cash provided by/(used in) financing activities	57,181		(131,264)
Effects of exchange rate changes on cash, cash equivalents, and restricted cash	10,988		(3,409)
Net increase/(decrease) in cash, cash equivalents, and restricted cash	253,286		(9,007)
Cash, cash equivalents, and restricted cash – beginning of period	380,746		286,115
Cash, cash equivalents, and restricted cash – end of period	$	634,032	$	277,108
Supplemental disclosures of non-cash activities:
Shares issued via vesting of liability classified awards	$	7,511	$	6,453
Cash acquired through acquisitions	$	88	$	15,755
Cash paid during the period:
Interest	$	744	$	657
Taxes, net of refunds	33,692		53,358

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.

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.

In August 2020, the Company completed the acquisition of MVP Capital, LLC ("MVP"), an independent advisory firm that provides a range of financial advisory services to clients in the technology, media, and telecommunications sectors.

The Company offers financial services and financial advice to a broad clientele located throughout the United States of America, Europe, the Middle East, and the Asia-Pacific region. The Company has U.S. offices in Los Angeles, San Francisco, Chicago, New York City, Minneapolis, McLean (Virginia), Boston, Dallas, Houston, Miami, and Atlanta as well as foreign offices in London, Paris, Frankfurt, Milan, 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.

6

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

•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") 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, 2020 are not necessarily indicative of the results of operations to be expected for the fiscal year ending March 31, 2021. 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, 2020 (the "2020 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 credit losses; 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.

7

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

Revenues

Revenues consist of fee revenues from advisory services and reimbursed costs incurred in fulfilling the contracts. Revenues reflect fees generated from our CF, FR, and FVA business segments.

The Company generates revenues from contractual advisory services and reimbursed costs incurred in fulfilling the contracts for such services. 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., the success related Completion Fees) are considered variable and constrained as they are contingent upon a future event which includes factors outside of our control (e.g., completion of a transaction or third party emergence from bankruptcy or approval by the court).

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.

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 considered variable and constrained until the related transaction has been effectively closed as they are contingent upon a future event which includes factors outside of our control (e.g., completion of a transaction or third party emergence from bankruptcy or approval by the court).

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.

8

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

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. We did not have any outstanding foreign currency forward contracts as of December 31, 2020. 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.

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.

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.

9

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

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, 2020 and March 31, 2020, 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, 2020		March 31, 2020
Cash and cash equivalents	$	633,659	$	380,373
Restricted cash (1)	373		373
Total cash, cash equivalents, and restricted cash	$	634,032	$	380,746

(1)Restricted cash as of December 31, 2020 and March 31, 2020 consisted of a cash secured letter of credit issued for our Frankfurt office.

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 (income)/expense, net in the accompanying Consolidated Statements of Comprehensive Income.     

Allowance for Credit Losses

The allowance for credit losses on accounts receivable and unbilled work in progress reflects management’s best estimate of expected losses using the Company's internal current expected credit losses model. This model analyzes expected losses based on relevant information about historical experience, current conditions, and reasonable and supportable forecasts that could potentially affect the collectibility of the reported amounts. This 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 credit losses.

Income Taxes

The Company files a consolidated federal income tax return, 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.

10

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

On March 27, 2020 the United States enacted into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act and on December 27, 2020, the President signed into law the Coronavirus Response and Relief Supplemental Appropriations Act. These laws are meant to address the economic uncertainty as a result of the coronavirus pandemic. The Company has completed its evaluation of the provisions of these laws, which resulted in no material impacts on its income tax provision.

Leases

We assess whether an arrangement is or contains a lease at the inception of the agreement. Right-of-use ("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.

Goodwill and 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, 2020, 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, 2020, management concluded that it was not more likely than not that the fair values were less than the carrying values.

11

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

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, 2020, no events or changes in circumstances were identified that indicated that the carrying amount of the finite-lived intangible assets were not recoverable.

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.

On April 1, 2020, we adopted ASU 2016-13 Financial Instruments—Credit Losses — Measurement of Credit Losses on Financial Instruments, and all related amendments, under a modified retrospective approach. Upon adoption, a cumulative transition adjustment was recorded, which reduced retained earnings by $(924). The tax impact of this adjustment increased retained earnings by $242, resulting in a net decrease to retained earnings of $(682) as of April 1, 2020. The impact of this pronouncement had an immaterial impact on our Net income for the nine months ended December 31, 2020.

The following table provides a reconciliation of the cumulative transition adjustment pertaining to the adoption of the credit loss guidance reported within the Consolidated Balance Sheets.

	March 31, 2020		Transition Adjustment		April 1, 2020
Accounts receivable, net of allowance for credit losses	$	80,912	$	(599)	$	80,313
Unbilled work in progress, net of allowance for credit losses	39,821		(232)		39,589
Other assets	38,890		(93)		38,797
Deferred income taxes, net	5,843		242		6,085
Retained earnings	$	377,471	$	(682)	$	376,789

Note 3 — Revenue Recognition

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.

12

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

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, 2020		Increase/(Decrease)		December 31, 2020
Receivables (1)	$	73,720	$	(2,148)	$	71,572
Unbilled work in process, net of allowance for credit losses	39,821		13,253		53,074
Contract Assets (1)	7,192		205		7,397
Contract Liabilities (2)	26,780		10,228		37,008

(1)Included within Accounts receivable, net of allowance for credit losses in the December 31, 2020 Consolidated Balance Sheet.

(2)Included within Deferred income in the December 31, 2020 Consolidated Balance Sheet.

During the three and nine months ended December 31, 2020, $6.0 million and $15.6 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, 2020.

Note 4 — Related Party Transactions

The Company provides financial advisory services to its affiliates and certain other related parties, and received fees for these services totaling approximately $108 and $0 during the three months ended December 31, 2020 and 2019, respectively, and $233 and $698 for the nine months ended December 31, 2020 and 2019, respectively.

The Company provided certain management and administrative services for the Company's unconsolidated entities and received fees for these services. No such fees were recognized during the three months ended December 31, 2020 and 2019; however, the Company received net fees of $0 and $126 during the nine months ended December 31, 2020 and 2019, respectively.

In the accompanying Consolidated Balance Sheets, the Company carried accounts receivable and unbilled work in progress from related parties totaling approximately $26 and $0 as of December 31, 2020 and March 31, 2020, respectively.

Other assets in the accompanying Consolidated Balance Sheets includes loans receivable from certain employees of $16,932 and $17,857 as of December 31, 2020 and March 31, 2020, respectively.

13

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

Note 5 — Fair Value Measurements

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

	December 31, 2020
	Level 1		Level 2		Level 3		Total
Corporate debt securities	$	—	$	206,729	$	—	$	206,729
U.S. treasury securities	—		27,847		—		27,847
Total asset measured at fair value	$	—	$	234,576	$	—	$	234,576

	March 31, 2020
	Level 1		Level 2		Level 3		Total
Corporate debt securities	$	—	$	43,027	$	—	$	43,027
U.S. treasury securities	—		92,362		—		92,362
Total asset measured at fair value	$	—	$	135,389	$	—	$	135,389

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, 2020.

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, 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.

14

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

Note 6 — Investment Securities

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

	December 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
Corporate debt securities	$	206,055	$	688	$	(14)	$	206,729
U.S. treasury securities	27,429		418		—		27,847
Total securities with unrealized gains	$	233,484	$	1,106	$	(14)	$	234,576

	March 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
Corporate debt securities	$	43,166	$	210	$	(349)	$	43,027
U.S. treasury securities	91,722		691		(51)		92,362
Total securities with unrealized gains	$	134,888	$	901	$	(400)	$	135,389

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

	December 31, 2020				March 31, 2020
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due within one year	$	203,913	$	203,982	$	105,349	$	105,302
Due within years two through five	29,571		30,594		29,539		30,087
Total debt within the investment securities portfolio	$	233,484	$	234,576	$	134,888	$	135,389

Note 7 — Allowance for Credit Losses

	December 31, 2020		March 31, 2020
Beginning balance	$	6,889	$	5,596
Transition adjustment as of April 1, 2020	831		—
Provision for bad debt, net	4,829		4,873
Recovery or write-off of uncollectible accounts	(2,747)		(3,580)
Ending balance	$	9,802	$	6,889

15

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

Note 8 — Property and Equipment

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

	December 31, 2020		March 31, 2020
Equipment	$	9,679	$	8,788
Furniture and fixtures	21,707		20,942
Leasehold improvements	50,939		41,643
Computers and software	19,291		17,941
Other	1,122		1,113
Total cost	102,738		90,427
Less: accumulated depreciation	(56,571)		(48,055)
Total net book value	$	46,167	$	42,372

Additions to property and equipment during the nine months ended December 31, 2020 were primarily related to leasehold improvement costs incurred and computer and software purchases.

Depreciation expense of $2,756 and $2,423 was recognized during the three months ended December 31, 2020 and 2019, respectively, and $8,212 and $7,101 was recognized during the nine months ended December 31, 2020 and 2019, respectively.

Note 9 — Goodwill and Other Intangible Assets

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

	Useful Lives	December 31, 2020		March 31, 2020
Goodwill	Indefinite	$	670,200	$	618,455
Tradename-Houlihan Lokey	Indefinite	192,210		192,210
Other intangible assets	Varies	6,954		10,732
Total cost		869,364		821,397
Less: accumulated amortization		(2,926)		(8,553)
Goodwill and other intangibles, net		$	866,438	$	812,844

16

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

Goodwill attributable to the Company’s business segments is as follows:

	April 1, 2020		Change (1)		December 31, 2020
Corporate Finance	$	363,925	$	51,745	$	415,670
Financial Restructuring	162,815		—		162,815
Financial and Valuation Advisory	91,715		—		91,715
Goodwill	$	618,455	$	51,745	$	670,200

(1)Changes pertain to the 2020 acquisition referenced in Note 1 and foreign currency translation adjustments.

Amortization expense of approximately $1,193 and $1,913 was recognized for the three months ended December 31, 2020 and 2019, respectively, and $3,079 and $5,179 was recognized for the nine months ended December 31, 2020 and 2019, respectively.

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

	Year Ended March 31,
Remainder of 2021	$	1,082
2022	2,207
2023	325
2024	7
2025	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. 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, 2020, no principal was outstanding under the 2019 Line of Credit.

Prior to the IPO, Fram Holdings, Inc., a Delaware corporation and, prior to our IPO, our indirect parent company, 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 1.46% and 3.1% as of December 31, 2020 and 2019, respectively, and the maturity dates range from 2020 to 2027. The Company incurred interest expense on these notes of $5 and $15 during the three months ended December 31, 2020 and 2019, respectively, and $18 and $52 during the nine months ended December 31, 2020 and 2019, respectively.

17

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

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 loan had an annual interest 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. During the three months ended December 31, 2020, the Company completed its final scheduled principal payment, extinguishing the liability. The company incurred interest expense on this loan of $6 and $17 during the three months ended December 31, 2020 and 2019, respectively, and $30 and $64 during the nine months ended December 31, 2020 and 2019, respectively.

As described in Note 1, in June 2019, 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 $0 and $999 as of December 31, 2020 and March 31, 2020, respectively, which is included in Other liabilities in our 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 Class B common 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 $68 and $99 for the three months ended December 31, 2020 and 2019, respectively, and $218 and $228 for the nine months ended December 31, 2020 and 2019, 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. This note was subsequently assigned by the seller to the former BearTooth principals (who became employees of the Company), and, under certain circumstances, is convertible into Company Class B common stock after the fifth anniversary of the closing of the transaction. The Company incurred interest expense on this note of $26 for each of the three months ended December 31, 2020 and 2019, and $79 for each of the nine months ended December 31, 2020 and 2019.

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 note issued by the Company to the seller was distributed to the former principals of Freeman & Co. (who became employees of the Company). Under certain circumstances, the note may be exchanged by each principal for Company stock over a four-year period in equal annual installments starting in December 2020. The Company incurred interest expense on this note of $28 and $83 for the three and nine months ended December 31, 2020, respectively.

In August 2020, the Company acquired MVP. Total consideration included an unsecured non-interest bearing note of $4.5 million payable August 14, 2050. The note was issued by the Company to the former principals and sellers of MVP (who became employees of the Company). Under certain circumstances, the note may be exchanged by each seller for a combination of cash and Company stock over a three-year period in equal annual installments starting in August 2021. Contingent consideration was also issued in connection with the acquisition of MVP, with a carrying value of $17.0 million as of December 31, 2020, which is included in Other liabilities in our Consolidated Balance Sheets.

18

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

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, 2020 are as follows:

Remaining 2021	$	975
2022	12,214
2023	15,580
2024	6,588
2025	—
2026 and thereafter	13,242
Total	$	48,599

19

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

Note 11 — Accumulated Other Comprehensive (Loss)

Accumulated other comprehensive (loss) is comprised of Foreign currency translation adjustments of $14,037 and $14,388 for the three months ended December 31, 2020 and 2019, respectively, and $22,407 and $977 for the nine months ended December 31, 2020 and 2019, respectively. We do not expect the change in foreign currency translation to have a material impact on our operating results and financial position.

Accumulated other comprehensive (loss) as of December 31, 2020 was comprised of the following:

Balance, April 1, 2020	$	(43,108)
Foreign currency translation adjustment	22,407
Balance, December 31, 2020	$	(20,701)

Note 12 — Income Taxes

The Company’s provision for income taxes was $40,088 and $20,161 for the three months ended December 31, 2020 and 2019, respectively, and $56,020 and $39,954 for the nine months ended December 31, 2020 and 2019, respectively. These represent effective tax rates of 25.3% and 29.2% for the three months ended December 31, 2020 and 2019, respectively, and 20.8% and 24.3% for the nine months ended December 31, 2020 and 2019, respectively.

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,
	2020		2019		2020		2019
Numerator:
Net income attributable to holders of shares of common stock—basic	$	118,515	$	48,894	$	213,405	$	124,779
Net income attributable to holders of shares of common stock—diluted	$	118,515	$	48,894	$	213,405	$	124,779
Denominator:
Weighted average shares of common stock outstanding—basic	66,547,587		62,014,564		65,680,516		62,199,716
Weighted average number of incremental shares pertaining to unvested restricted stock and issuable in respect of unvested restricted stock units, as calculated using the treasury stock method	2,808,760		3,593,462		2,915,987		3,570,340
Weighted average shares of common stock outstanding—diluted	69,356,347		65,608,026		68,596,503		65,770,056
Basic earnings per share	$	1.78	$	0.79	$	3.25	$	2.01
Diluted earnings per share	$	1.71	$	0.75	$	3.11	$	1.90

20

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 $2,327 and $1,815 to these plans during the three months ended December 31, 2020 and 2019, respectively, and $4,368 and $3,524 during the nine months ended December 31, 2020 and 2019, respectively.

Share-Based Incentive Plans

Following the IPO, additional awards of restricted shares and restricted stock units 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 48,716 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, (vii) one independent director in the third quarter of fiscal 2020 at $47.21 per share, (viii) four independent directors in the first quarter of fiscal 2021 at $60.60 per share, and (ix) two independent directors in the third quarter of fiscal 2021 at $63.01 per share.

No excess tax benefit was recognized during the three months ended December 31, 2020 and 2019. An excess tax benefit of $13,408 and $7,605 was recognized during the nine months ended December 31, 2020 and 2019, respectively, as a component of the provision for income taxes and an operating activity on the Consolidated Statements of Cash Flows. The excess tax benefits recognized during the nine months ended December 31, 2020 and 2019 were related to shares vested in April and May 2020 and 2019, 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, 2020 and 2019 is as follows:

Unvested Share Awards	Shares	Weighted Average Grant Date Fair Value
Balance, April 1, 2020	3,539,047	$	39.13
Granted	1,044,741	60.60
Vested	(1,770,294)	32.36
Forfeited/Repurchased	(60,904)	50.69
Balance, December 31, 2020	2,752,590	$	51.37
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

21

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, 2020 and 2019 is as follows:

Awards Settleable in Shares	Fair Value
Balance, April 1, 2020	$	20,989
Offer to grant	5,655
Share price determined-converted to cash payments	(249)
Share price determined-transferred to equity grants	(7,223)
Forfeited	(1,756)
Balance, December 31, 2020	$	17,416
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

Compensation expenses for the Company associated with both equity and liability classified awards totaled $12,642 and $16,682 for the three months ended December 31, 2020 and 2019, respectively, and $46,779 and $47,791 for the nine months ended December 31, 2020 and 2019, respectively.

As of December 31, 2020 and 2019, there was $143,660 and $139,061, respectively, of total unrecognized compensation cost related to unvested share awards granted under both the 2006 Incentive Plan and 2016 Incentive Plan. These costs are recognized over a weighted average period of 1.4 years and 1.2 years, as of December 31, 2020 and 2019, respectively.

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 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.

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.

22

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 at a price of $45.62.

On May 20, 2020, the Company completed an underwritten public offering of 3,000,000 shares of its Class A common stock. The offering generated net proceeds for the Company of approximately $188.7 million after deducting the underwriting discount and estimated offering expenses payable by us.

On August 14, 2020, the Company completed the acquisition of MVP. Consideration included 192,247 unrestricted shares of the Company’s Class B Common Stock and 104,862 restricted shares of the Company's Class B common stock, that are subject to certain repurchase rights in favor of the Company. The Company registered for resale shares of Class A common stock issuable upon conversion of such unrestricted shares of Class B common stock pursuant to a prospectus supplement filed with the SEC on August 28, 2020.

Class A common stock

During the three months ended December 31, 2020 and 2019, 3,174 and 2,118 shares were issued to non-employee directors, respectively, and 790,025 and 2,100,523 were converted from Class B to Class A, respectively. During the nine months ended December 31, 2020 and 2019, 8,751 and 9,145 shares were issued to non-employee directors, respectively, and 3,121,294 and 5,992,399 were converted from Class B to Class A, respectively. As of December 31, 2020, there were 51,578,208 Class A shares held by the public and 45,475 Class A shares held by non-employee directors. 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

As of December 31, 2020 and 2019, there were 17,472,592 and 21,998,937, respectively, Class B shares held by the HL Voting Trust.

Dividends

Previously declared dividends related to unvested shares of $5,846 and $7,719 were unpaid as of December 31, 2020 and 2019, 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.

23

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

Share repurchases

In July 2018, the board of directors authorized the repurchase of up to an additional $100 million of the Company's common stock.

In July 2020, the board of directors authorized a new share repurchase program to replace the aforementioned July 2018, $100 million repurchase authority. Under the July 2020 share repurchase program, the Company is authorized to acquire an aggregate amount of up to $125 million of the Company's Class A common stock and Class B common stock. In January 2021, the board of directors authorized an increase to the existing July 2020 share repurchase program to a new aggregate amount of up to $200 million of the Company's Class A common stock and Class B common stock.

During the three months ended December 31, 2020 and 2019, the Company repurchased 295 and 1,350 shares, respectively, of Class B common stock, to satisfy $19 and $65 of required withholding taxes in connection with the vesting of restricted awards, respectively. During the three months ended December 31, 2020 the Company repurchased an additional 283,035 shares of its outstanding common stock at a weighted average price of $65.69 per share, excluding commissions, for an aggregate purchase price of $18,593. During the three months ended December 31, 2019, the Company repurchased an additional 97,956 shares of its outstanding common stock at a weighted average price of and $44.12 per share, excluding commissions, for an aggregate purchase price of $4,322.

During the nine months ended December 31, 2020 and 2019, the Company repurchased 286,730 and 610,943 shares, respectively, of Class B common stock, to satisfy $17,810 and $29,349 of required withholding taxes in connection with the vesting of restricted awards, respectively. During the nine months ended December 31, 2020, the Company repurchased an additional 684,995 shares of its outstanding common stock at a weighted average price of $61.01 per share, excluding commissions, for an aggregate purchase price of $41,793. During the nine months ended December 31, 2019, the Company repurchased an additional 632,353 shares of its outstanding common stock at a weighted average price of $43.98 per share, excluding commissions, for an aggregate purchase price of $27,809.

Note 16 — Leases

Lessee Arrangements

Operating Leases

We lease real estate and equipment used in operations from third parties. As of December 31, 2020, the remaining term of our operating leases ranged from 1 to 16 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, 2020.

	Operating Leases
Remaining 2021	$	7,657
2022	28,888
2023	24,098
2024	18,833
2025	19,918
Thereafter	101,286
Total	200,680
Less: present value discount	(32,113)
Operating lease liabilities	$	168,567

During the three months ended December 31, 2020, the Company entered into one additional office space operating lease that has not yet commenced, for approximately $1.5 million. This operating lease is expected to commence January 2021 with a lease term of 6 years.

24

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

Lease costs

	Three Months Ended December 31,				Nine Months Ended December 31,
	2020		2019		2020		2019
Operating lease expense	$	7,169	$	6,466	$	21,967	$	21,729
Variable lease expense (1)	2,913		2,999		8,040		12,675
Short-term lease expense	57		114		157		195
Less: Sublease income	(53)		(48)		(154)		(145)
Total lease costs	$	10,086	$	9,531	$	30,010	$	34,454

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

Weighted-average details

	December 31, 2020
	2020		2019
Weighted-average remaining lease term (years)	9		9
Weighted-average discount rate	3.8	%	4.1	%

Supplemental cash flow information related to leases:

	Nine Months Ended December 31,
	2020		2019
Operating cash flows:
Cash paid for amounts included in the measurement of Operating lease liabilities	$	23,658	$	17,970
Right-of-use assets obtained in exchange for Operating lease liabilities	30,246		—
Non-cash activity:
Increase/(decrease) in Operating lease right-of-use assets due to remeasurement	$	(1,208)	$	(5,883)

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, 2020 or March 31, 2020.

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 2020 Annual Report.

25

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

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.    

	Three Months Ended December 31,				Nine Months Ended December 31,
	2020		2019		2020		2019
Revenues by segment
Corporate Finance	$	306,171	$	201,137	$	502,191	$	490,707
Financial Restructuring	177,995		92,808		392,006		249,438
Financial and Valuation Advisory	53,710		39,570		130,551		116,529
Revenues	$	537,876	$	333,515	$	1,024,748	$	856,674
Segment profit (1)
Corporate Finance	$	96,431	$	58,495	$	143,167	$	138,611
Financial Restructuring	78,855		28,391		169,832		75,956
Financial and Valuation Advisory	13,901		7,163		33,213		24,384
Total segment profit	189,187		94,049		346,212		238,951
Corporate expenses (2)	30,771		26,033		78,331		78,005
Other (income)/expense, net	(187)		(1,039)		(1,544)		(3,787)
Income before provision for income taxes	$	158,603	$	69,055	$	269,425	$	164,733

(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, 2020		March 31, 2020
Assets by segment
Corporate Finance	$	492,212	$	403,147
Financial Restructuring	170,997		186,418
Financial and Valuation Advisory	136,761		127,440
Total segment assets	799,970		717,005
Corporate assets	1,319,829		959,998
Total assets	$	2,119,799	$	1,677,003

	Three Months Ended December 31,				Nine Months Ended December 31,
	2020		2019		2020		2019
Income before provision for income taxes by geography
United States	$	123,774	$	58,349	$	210,580	$	132,846
International	34,829		10,706		58,845		31,887
Income before provision for income taxes	$	158,603	$	69,055	$	269,425	$	164,733

26

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,
	2020		2019		2020		2019
Revenues by geography
United States	$	414,891	$	294,083	$	815,904	$	740,520
International	122,985		39,432		208,844		116,154
Revenues	$	537,876	$	333,515	$	1,024,748	$	856,674

	December 31, 2020		March 31, 2020
Assets by geography
United States	1,635,642		1,135,871
International	484,157		541,132
Total assets	$	2,119,799	$	1,677,003

Note 19 — Subsequent Events

On January 20, 2021, the Company's board of directors declared a quarterly cash dividend of $0.33 per share of Class A and Class B common stock, payable on March 15, 2021, to shareholders of record on March 2, 2021.

On February 1, 2021, Advanced Merger Partners, Inc., a special purpose acquisition company of which an affiliate of the Company is acting as a sponsor, filed a registration statement for an initial public offering. The Company has agreed to invest up to approximately $7 million in the company and may provide services to it in the future.

27

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, 2020 (the "2020 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 to our unaudited consolidated financial statements in this Form 10-Q 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. 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 Retainer Fees and in some cases Progress Fees that may have been received.

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.

FVA 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.

28

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 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 liability classified 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 fiscal 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 and/or losses associated with the reduction/increase 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, 2020 and 2019. 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)	2020		2019		Change		2020		2019		Change
Revenues	$	537,876	$	333,515	61	%	$	1,024,748	$	856,674	20	%
Operating expenses:
Employee compensation and benefits	339,743		213,107		59	%	654,113		551,056		19	%
Non-compensation	39,717		52,392		(24)	%	102,754		144,672		(29)	%
Total operating expenses	379,460		265,499		43	%	756,867		695,728		9	%
Operating income	158,416		68,016		133	%	267,881		160,946		66	%
Other (income)/expense, net	(187)		(1,039)		(82)	%	(1,544)		(3,787)		(59)	%
Income before provision for income taxes	158,603		69,055		130	%	269,425		164,733		64	%
Provision for income taxes	40,088		20,161		99	%	56,020		39,954		40	%
Net income attributable to Houlihan Lokey, Inc.	$	118,515	$	48,894	142	%	$	213,405	$	124,779	71	%

29

Three Months Ended December 31, 2020 versus December 31, 2019

Revenues were $537.9 million for the three months ended December 31, 2020, compared with $333.5 million for the three months ended December 31, 2019, representing an increase of 61%. For the quarter, CF revenues increased 52%, FR revenues increased 92%, and FVA revenues increased 36% when compared with the three months ended December 31, 2019.

Operating expenses were $379.5 million for the three months ended December 31, 2020, compared with $265.5 million for the three months ended December 31, 2019, representing an increase of 43%. Employee compensation and benefits expense, as a component of operating expenses, was $339.7 million for the three months ended December 31, 2020, compared with $213.1 million for the three months ended December 31, 2019, representing an increase of 59%. The increase in employee compensation and benefits expense was primarily a result of an increase in revenues for the quarter when compared with the same quarter last year. The Compensation Ratio was 63.2% for the three months ended December 31, 2020, compared with 63.9% for the three months ended December 31, 2019. Non-compensation expense, as a component of operating expenses, was $39.7 million for the three months ended December 31, 2020, compared with $52.4 million for the three months ended December 31, 2019, representing a decrease of (24)%. The decrease in non-compensation expense was primarily a result of decreases in travel, meals, and entertainment expense and other operating expenses for the quarter when compared with the same quarter last year. The decrease in travel, meals, and entertainment expense was primarily driven by reduced travel and entertainment activity as a result of the COVID-19 pandemic. The decrease in other operating expenses was due to a reduction in other miscellaneous costs, also primarily driven by the COVID-19 pandemic.

Other (income)/expense, net decreased (82)% to $(0.2) million for the three months ended December 31, 2020, compared with $(1.0) million for the three months ended December 31, 2019, primarily due to lower interest (income) generated by our investment securities and cash and cash equivalents.

The provision for income taxes for the three months ended December 31, 2020 was $40.1 million, which reflected an effective tax rate of 25.3%. 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 decrease in the Company's tax rate during the three months ended December 31, 2020 relative to the same period in 2019 was primarily a result of a decrease in non-deductible expenses and state taxes as a result of year-over-year fluctuations in pre-tax income.

Nine Months Ended December 31, 2020 versus December 31, 2019

Revenues were $1,024.7 million for the nine months ended December 31, 2020 compared with $856.7 million for the nine months ended December 31, 2019, representing an increase of 20%. For the nine months ended December 31, 2020, CF revenues increased 2%, FR revenues increased 57%, and FVA revenues increased 12% when compared with the nine months ended December 31, 2019.

Operating expenses were $756.9 million for the nine months ended December 31, 2020, compared with $695.7 million for the nine months ended December 31, 2019, an increase of 9%. Employee compensation and benefits expense, as a component of operating expenses, was $654.1 million for the nine months ended December 31, 2020, compared with $551.1 million for the nine months ended December 31, 2019, an increase of 19%. The increase in employee compensation and benefits expense was primarily a result of increased revenues for the nine-month period when compared with the same period last year. The Compensation Ratio was 63.8% and 64.3% for the nine months ended December 31, 2020 and 2019, respectively. Non-compensation expense, as a component of operating expenses, was $102.8 million for the nine months ended December 31, 2020, compared with $144.7 million for the nine months ended December 31, 2019, a decrease of (29)%. The decrease in non-compensation expense was primarily a result of decreases in travel, meals, and entertainment expense and other operating expenses for the nine-month period when compared with the same period last year. The decrease in travel, meals, and entertainment expense was primarily driven by reduced travel and entertainment activity as a result of the COVID-19 pandemic. The decrease in other operating expenses was due to a reduction in marketing costs, office-related costs, and other costs, also primarily driven by the COVID-19 pandemic.

Other (income)/expense, net decreased to $(1.5) million for the nine months ended December 31, 2020, compared with $(3.8) million for the nine months ended December 31, 2019, primarily due to lower interest (income) generated by our investment securities and cash and cash equivalents.

The provision for income taxes for the nine months ended December 31, 2020 was $56.0 million, which reflected an effective tax rate of 20.8%. 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 decrease in the Company's tax rate during the nine months ended December 31, 2020 relative to the same period in 2019 was primarily a result of a decrease in non-deductible expenses and state taxes as a result of year-over-year fluctuations in pre-tax income.

30

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)	2020		2019		Change		2020		2019		Change
Revenues by Segment
Corporate Finance	$	306,171	$	201,137	52	%	$	502,191	$	490,707	2	%
Financial Restructuring	177,995		92,808		92	%	392,006		249,438		57	%
Financial and Valuation Advisory	53,710		39,570		36	%	130,551		116,529		12	%
Revenues	$	537,876	$	333,515	61	%	$	1,024,748	$	856,674	20	%
Segment Profit (1)
Corporate Finance	$	96,431	$	58,495	65	%	$	143,167	$	138,611	3	%
Financial Restructuring	78,855		28,391		178	%	169,832		75,956		124	%
Financial and Valuation Advisory	13,901		7,163		94	%	33,213		24,384		36	%
Total Segment Profit	189,187		94,049		101	%	346,212		238,951		45	%
Corporate Expenses (2)	30,771		26,033		18	%	78,331		78,005		—	%
Other (income)/expense, net	(187)		(1,039)		(82)	%	(1,544)		(3,787)		(59)	%
Income Before Provision for Income Taxes	$	158,603	$	69,055	130	%	$	269,425	$	164,733	64	%
Segment Metrics
Number of Managing Directors
Corporate Finance	123		122		1	%	123		122		1	%
Financial Restructuring	47		45		4	%	47		45		4	%
Financial and Valuation Advisory	31		32		(3)	%	31		32		(3)	%
Number of Closed Transactions/Fee Events (3)
Corporate Finance	121		95		27	%	209		225		(7)	%
Financial Restructuring	44		28		57	%	103		70		47	%
Financial and Valuation Advisory	639		530		21	%	1,134		1,086		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 one thousand dollars. References to closed transactions should be understood to be the same as transactions that are “effectively closed” as described in Note 2 of our Consolidated Financial Statements.

Corporate Finance

Three Months Ended December 31, 2020 versus December 31, 2019

Revenues for CF were $306.2 million for the three months ended December 31, 2020, compared with $201.1 million for the three months ended December 31, 2019, representing an increase of 52%. Revenues increased primarily due to a significant increase in the number of closed transactions and average transaction fee on closed transactions when compared to the same quarter last year.

Segment profit for CF was $96.4 million for the three months ended December 31, 2020, compared with $58.5 million for the three months ended December 31, 2019. Profitability increased primarily as a result of an increase in revenues and a decrease in non-compensation expenses as a percentage of revenues, partially offset by an increase in compensation expenses as a percentage of revenues when compared to the same quarter last year.

31

Nine Months Ended December 31, 2020 versus December 31, 2019

Revenues for CF were $502.2 million for the nine months ended December 31, 2020, compared with $490.7 million for the nine months ended December 31, 2019, representing an increase of 2%. Revenues increased primarily due to an increase in the average transaction fee, partially offset by a decrease in number of transactions closed when compared to the same period last year.

Segment profit for CF was $143.2 million for the nine months ended December 31, 2020, compared with $138.6 million for the nine months ended December 31, 2019. Profitability increased primarily as a result of an increase in revenues and a decrease in non-compensation expenses as a percentage of revenues, partially offset by an increase in compensation expenses as a percentage of revenues when compared to the same period last year.

Financial Restructuring

Three Months Ended December 31, 2020 versus December 31, 2019

Revenues for FR were $178.0 million for the three months ended December 31, 2020, compared with $92.8 million for the three months ended December 31, 2019, representing an increase of 92%. Revenues increased primarily due to a significant increase in the number of closed transactions and average transaction fee on closed transactions when compared to the same quarter last year.

Segment profit for FR was $78.9 million for the three months ended December 31, 2020, compared with $28.4 million for the three months ended December 31, 2019, an increase of 178%. Profitability increased as a result of increased revenues, and lower compensation and non-compensation expenses as a percentage of revenues when compared to the same quarter last year.

Nine Months Ended December 31, 2020 versus December 31, 2019

Revenues for FR were $392.0 million for the nine months ended December 31, 2020, compared with $249.4 million for the nine months ended December 31, 2019, representing an increase of 57%. The increase in revenues was primarily a result of an increase in the number of closed transactions and the average transaction fee when compared to the same period last year.

Segment profit for FR was $169.8 million for the nine months ended December 31, 2020, compared with $76.0 million for the nine months ended December 31, 2019, an increase of 124%. Profitability increased as a result of higher revenues, and lower compensation and non-compensation expenses as a percentage of revenues when compared to the same period last year.

Financial and Valuation Advisory

Three Months Ended December 31, 2020 versus December 31, 2019

Revenues for FVA were $53.7 million for the three months ended December 31, 2020, compared with $39.6 million for the three months ended December 31, 2019, representing an increase of 36%. Revenues increased primarily as a result of an increase in the number of fee events and average fee per fee event when compared to the same quarter last year.

Segment profit for FVA was $13.9 million for the three months ended December 31, 2020, compared with $7.2 million for the three months ended December 31, 2019, an increase of 94%. Profitability increased primarily as a result of an increase in revenues and a decrease in non-compensation expenses as a percentage of revenues, partially offset by an increase in compensation expenses as a percentage of revenues when compared to the same quarter last year.

Nine Months Ended December 31, 2020 versus December 31, 2019

Revenues for FVA were $130.6 million for the nine months ended December 31, 2020, compared with $116.5 million for the nine months ended December 31, 2019, representing an increase of 12%. Revenues increased primarily as a result of an increase in the number of fee events and average fee per fee event when compared to the same period last year.

Segment profit for FVA was $33.2 million for the nine months ended December 31, 2020, compared with $24.4 million for the nine months ended December 31, 2019, an increase of 36%. Profitability increased primarily as a result of an increase in revenues and a decrease in non-compensation expenses as a percentage of revenues, partially offset by an increase in compensation expenses as a percentage of revenues when compared to the same period last year.

32

Corporate Expenses

Three Months Ended December 31, 2020 versus December 31, 2019

Corporate expenses were $30.8 million for the three months ended December 31, 2020, compared with $26.0 million for the three months ended December 31, 2019. This 18% increase was primarily driven by an increase in compensation expenses, partially offset by a decrease in non-compensation expenses when compared to the same quarter last year.

Nine Months Ended December 31, 2020 versus December 31, 2019

Corporate expenses remained relatively flat at $78.3 million for the nine months ended December 31, 2020, compared with $78.0 million for the nine months ended December 31, 2019. This is due to an increase in compensation expenses, offset by a commensurate decrease in non-compensation expenses when compared to the same period last year.

33

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, 2020 and March 31, 2020, we had $224.5 million and $173.7 million of cash in foreign subsidiaries, respectively. 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.

As of December 31, 2020 and March 31, 2020, our restricted cash, cash and cash equivalents, and investment securities were as follows:

(In thousands)	December 31, 2020		March 31, 2020
Cash and cash equivalents	$	633,659	$	380,373
Investment securities	234,576		135,389
Total unrestricted cash and cash equivalents, including investment securities	868,235		515,762
Restricted cash (1)	373		373
Total cash, cash equivalents, and restricted cash, including investment securities	$	868,608	$	516,135

(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 that 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, 2020, accounts receivable, net of credit losses was $79.0 million. As of December 31, 2020, unbilled work in process, net of credit losses was $53.1 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).

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 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, 2020, 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. 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, 2020, we were, and expect to continue to be, in compliance with such covenants.

On May 20, 2020, the Company completed an underwritten public offering of 3,000,000 shares of its Class A common stock. The offering generated net proceeds for the Company of approximately $188.7 million after deducting the underwriting discount and estimated offering expenses payable by us.

34

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)	2020		2019		Change
Operating activities:
Net income	$	213,405	$	124,779	71	%
Non-cash charges	77,332		62,147		24	%
Other operating activities	16,447		(76,168)		(122)	%
Net cash provided by operating activities	307,184		110,758		177	%
Net cash provided by/(used in) investing activities	(122,067)		14,908		NM
Net cash provided by/(used in) financing activities	57,181		(131,264)		(144)	%
Effects of exchange rate changes on cash, cash equivalents, and restricted cash	10,988		(3,409)		NM
Net increase/(decrease) in cash, cash equivalents, and restricted cash	253,286		(9,007)		NM
Cash, cash equivalents, and restricted cash—beginning of period	380,746		286,115		33	%
Cash, cash equivalents, and restricted cash—end of period	$	634,032	$	277,108	129	%

Nine Months Ended December 31, 2020

Operating activities resulted in a net inflow of $307.2 million primarily attributable to strong performance across the Company. Investing activities resulted in a net outflow of $(122.1) million primarily attributable to purchases of investment securities, partially offset by sales or maturities of investment securities. Financing activities resulted in a net inflow of $57.2 million primarily attributable to proceeds from the Company's May 2020 offering, partially offset by dividends paid and share repurchases. See Note 15 to our unaudited consolidated financial statements in this Form 10-Q for additional information.

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.

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 2020 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 $0.7 million.

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 2020 Annual Report. For additional information on critical accounting policies and estimates, see “Critical Accounting Policies and Estimates” in the MD&A of the 2020 Annual Report.

35

Recent Accounting Developments

On April 1, 2020, we adopted ASU 2016-13 Financial Instruments—Credit Losses — Measurement of Credit Losses on Financial Instruments, and all related amendments, under a modified retrospective approach. Upon adoption, a cumulative transition adjustment was recorded, which reduced retained earnings by $(682), net of tax.

For additional discussion of recently issued accounting developments and their impact or potential impact on our consolidated financial statements, see Note 2 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, other than for foreign currency hedging purposes. 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.

We regularly review our accounts receivable and allowance for credit losses 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 credit losses that, in our opinion, provides for an adequate reserve to cover losses that may be incurred.

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 $14,037 and $14,388 during the three months ended December 31, 2020 and 2019, respectively, and $22,407 and $977 during the nine months ended December 31, 2020 and 2019, 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.

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. We did not have any outstanding foreign currency forward contracts as of December 31, 2020. 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.

36

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.

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, 2020.

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, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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 2020 Annual Report.

Item 1A.    Risk Factors

There have been no material changes to the risk factors disclosed in our 2020 Annual Report.

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

On December 4, 2020, the Company issued 17,865 unrestricted shares of the Company’s 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, 2020, the Company issued 790,025 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.

37

Purchases of Equity Securities

The following table summarizes all of the repurchases of Houlihan Lokey, Inc. equity securities during the quarter ended December 31, 2020:

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, 2020 - October 31, 2020 (2)	31,069	$	58.27	30,913	$	100,500,039
November 1, 2020 - November 30, 2020	70,410	63.02		70,410	96,062,909
December 1, 2020 - December 31, 2020 (3)	181,851	68.00		181,712	83,707,049
Total	283,330	$	65.69	283,035	$	83,707,049

(1)The shares of Class A common stock repurchased through this program have been retired. In July 2020, the board of directors authorized a new program to replace the prior repurchase authority pursuant to which new program the Company may repurchase from time to time up to $125 million in aggregate purchase price of the Company’s Class A common stock or Class B common stock, in open market and negotiated purchases. In January 2021, the board of directors increased this existing repurchase authority to up to $200 million.

(2)Includes 156 unvested shares of Class B common stock at an average price per share of $63.73, which were withheld from employees to satisfy tax withholding obligations resulting from the vesting of certain restricted stock awards.

(3)Includes 139 unvested shares of Class B common stock at an average price per share of $68.18, 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.

38

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.

39

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 4, 2021	/s/ SCOTT L. BEISER
		Scott L. Beiser
		Chief Executive Officer
		(Principal Executive Officer)
Date:	February 4, 2021	/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, 2020 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 4, 2021	/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, 2020 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 4, 2021	/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, 2020 (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 4, 2021	/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, 2020 (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 4, 2021	/s/ J. LINDSEY ALLEY
		J. Lindsey Alley
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

XML

Cover Page - shares	9 Months Ended
	Dec. 31, 2020	Feb. 02, 2021
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2020
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	2021
Document Fiscal Period Focus	Q3
Class A common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		51,518,175
Class B common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		17,432,975

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2020	Mar. 31, 2020
Assets
Cash and cash equivalents	$ 633,659	$ 380,373
Restricted cash	373	373
Investment securities	234,576	135,389
Accounts receivable, net of allowance for credit losses of $7,949 and $5,587, respectively	78,969	80,912
Unbilled work in process, net of allowance for credit losses of $1,853 and $1,302, respectively	53,074	39,821
Income taxes receivable	0	4,282
Deferred income taxes	9,564	6,507
Property and equipment, net	46,167	42,372
Operating lease right-of-use assets	145,367	135,240
Goodwill and other intangibles, net	866,438	812,844
Other assets	51,612	38,890
Total assets	2,119,799	1,677,003
Liabilities:
Accrued salaries and bonuses	436,438	420,376
Accounts payable and accrued expenses	55,035	53,883
Deferred income	37,008	26,780
Income taxes payable	19,851	0
Deferred income taxes	35	664
Loans payable to former shareholders	1,007	1,393
Loan payable to non-affiliate	0	3,283
Operating lease liabilities	168,567	154,218
Other liabilities	47,592	32,024
Total liabilities	765,533	692,621
Additional paid-in capital	851,444	649,954
Retained earnings	523,454	377,471
Accumulated other comprehensive (loss)	(20,701)	(43,108)
Total stockholders' equity	1,354,266	984,382
Total liabilities and stockholders' equity	2,119,799	1,677,003
Common Class A
Common stock	52	46
Common Class B
Common stock	$ 17	$ 19

XML

CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Thousands	Dec. 31, 2020	Mar. 31, 2020
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 7,949	$ 5,587
Allowance for doubtful accounts, unbilled work in process	$ 1,853	$ 1,302
Common Class A
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)	51,623,683	46,178,633
Common stock, shares outstanding (in shares)	51,623,683	46,178,633
Common Class B
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)	17,472,592	19,345,277
Common stock, shares outstanding (in shares)	17,472,592	19,345,277

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Income Statement [Abstract]
Revenues	$ 537,876		$ 1,024,748
Revenues	537,876	$ 333,515	1,024,748	$ 856,674
Operating expenses:
Employee compensation and benefits	339,743	213,107	654,113	551,056
Travel, meals, and entertainment	1,338	12,943	4,416	32,760
Rent	10,086	9,531	30,010	34,454
Depreciation and amortization	3,949	4,336	11,291	12,280
Information technology and communications	9,281	7,225	22,532	19,477
Professional fees	6,188	6,204	16,422	16,494
Other operating expenses	8,875	12,153	18,083	29,207
Total operating expenses	379,460	265,499	756,867	695,728
Operating income	158,416	68,016	267,881	160,946
Other (income)/expense, net	(187)	(1,039)	(1,544)	(3,787)
Income before provision for income taxes	158,603	69,055	269,425	164,733
Provision for income taxes	40,088	20,161	56,020	39,954
Net income		48,894	213,405	124,779
Other comprehensive income, net of tax:
Foreign currency translation adjustments	14,037	14,388	22,407	977
Comprehensive income	$ 132,552	$ 63,282	$ 235,812	$ 125,756
Weighted average shares of common stock outstanding:
Basic (in shares)	66,547,587	62,014,564	65,680,516	62,199,716
Fully Diluted (in shares)	69,356,347	65,608,026	68,596,503	65,770,056
Net income per share of common stock
Basic (in dollars per share)	$ 1.78	$ 0.79	$ 3.25	$ 2.01
Fully Diluted (in dollars per share)	$ 1.71	$ 0.75	$ 3.11	$ 1.90

XML

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Cumulative Effect, Period Of Adoption, Adjustment	Class A common stock	Class B common stock	Total stockholders' equity	Common stock Class A common stock	Common stock Class B common stock	Treasury stock	Additional paid-in capital	Retained earnings	Accumulated other comprehensive loss
Beginning balance (in shares) at Mar. 31, 2019						38,200,802	27,197,734
Beginning balance at Mar. 31, 2019					$ 891,329	$ 38	$ 27		$ 645,090	$ 276,468	$ (30,294)
Increase (Decrease) in Stockholders' Equity
Shares issued (in shares)							1,537,143
Shares issued					7,664		$ 2		7,662
Stock compensation vesting					42,299				42,299
Class B shares sold (in shares)						3,694,497	(3,694,497)
Class B shares sold					0	$ 4	$ (4)
Dividends					(61,426)					(61,426)
Conversion of Class B to Class A shares (in shares)						2,297,902	(2,297,902)
Conversion of Class B to Class A shares					0	$ 2	$ (2)
Shares issued to non-employee directors (in shares)						9,145
Shares issued to non-employee directors	$ 369								369
Other shares repurchased/forfeited (in shares)						(632,353)	(743,541)
Other shares repurchased/forfeited					(59,298)		$ (1)		(59,297)
Net income	124,779				124,779					124,779
Change in unrealized translation	977				977						977
Total comprehensive income					125,756					124,779	977
Ending balance (in shares) at Dec. 31, 2019						43,569,993	21,998,937	0
Ending balance at Dec. 31, 2019					946,693	$ 44	$ 22	$ 0	636,123	339,821	(29,317)
Beginning balance (in shares) at Sep. 30, 2019						41,817,614	24,079,076	(252,306)
Beginning balance at Sep. 30, 2019					891,864	$ 42	$ 24	$ (11,219)	635,362	311,360	(43,705)
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					0	$ 2	$ (2)
Dividends					(20,433)					(20,433)
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
Other shares repurchased/forfeited (in shares)						(350,262)	(22,588)	252,306
Other shares repurchased/forfeited					(4,441)			$ 11,219	(15,660)
Net income	48,894				48,894					48,894
Change in unrealized translation	14,388				14,388						14,388
Total comprehensive income					63,282					48,894	14,388
Ending balance (in shares) at Dec. 31, 2019						43,569,993	21,998,937	0
Ending balance at Dec. 31, 2019					946,693	$ 44	$ 22	$ 0	636,123	339,821	(29,317)
Beginning balance (in shares) at Mar. 31, 2020			46,178,633	19,345,277		46,178,633	19,345,277
Beginning balance at Mar. 31, 2020	984,382	$ (682)			984,382	$ 46	$ 19		649,954	377,471	(43,108)
Increase (Decrease) in Stockholders' Equity
Shares issued (in shares)						3,000,000	1,596,243
Shares issued					223,173	$ 3	$ 2		223,168
Stock compensation vesting					37,601				37,601
Dividends					(66,740)					(66,740)
Conversion of Class B to Class A shares (in shares)						3,121,294	(3,121,294)
Conversion of Class B to Class A shares					0	$ 3	$ (3)
Shares issued to non-employee directors (in shares)						8,751
Shares issued to non-employee directors	333								333
Other shares repurchased/forfeited (in shares)						(684,995)	(347,634)
Other shares repurchased/forfeited					(59,613)		$ (1)		(59,612)
Net income	213,405				213,405					213,405
Change in unrealized translation	22,407				22,407						22,407
Total comprehensive income					235,812					213,405	22,407
Ending balance (in shares) at Dec. 31, 2020			51,623,683	17,472,592		51,623,683	17,472,592	0
Ending balance at Dec. 31, 2020	1,354,266				1,354,266	$ 52	$ 17	$ 0	851,444	523,454	(20,701)
Beginning balance (in shares) at Sep. 30, 2020						51,506,192	18,255,244	(392,673)
Beginning balance at Sep. 30, 2020					1,250,612	$ 52	$ 18	$ (22,711)	880,370	427,621	(34,738)
Increase (Decrease) in Stockholders' Equity
Shares issued (in shares)							31,153
Shares issued					1,701				1,701
Stock compensation vesting					10,694				10,694
Dividends					(22,682)					(22,682)
Conversion of Class B to Class A shares (in shares)						790,025	(790,025)
Conversion of Class B to Class A shares					0	$ 1	$ (1)
Shares issued to non-employee directors (in shares)						3,174
Shares issued to non-employee directors					0				0
Other shares repurchased/forfeited (in shares)						(675,708)	(23,780)	392,673
Other shares repurchased/forfeited					(18,611)	$ (1)		$ 22,711	(41,321)
Net income					118,515					118,515
Change in unrealized translation	14,037				14,037						14,037
Total comprehensive income					132,552					118,515	14,037
Ending balance (in shares) at Dec. 31, 2020			51,623,683	17,472,592		51,623,683	17,472,592	0
Ending balance at Dec. 31, 2020	$ 1,354,266				$ 1,354,266	$ 52	$ 17	$ 0	$ 851,444	$ 523,454	$ (20,701)

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Cash flows from operating activities:
Net income	$ 213,405	$ 124,779
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income taxes	(1,997)	(9,283)
Provision for bad debts, net	4,829	72
Unrealized gains on investment securities	(593)	(182)
Non-cash lease expense	17,023	11,469
Depreciation and amortization	11,291	12,280
Compensation expense – equity and liability classified share awards (Note 14)	46,779	47,791
Changes in operating assets and liabilities:
Accounts receivable	(1,064)	9,815
Unbilled work in process	(13,485)	4,287
Other assets	(12,444)	(4,152)
Accrued salaries and bonuses	18,101	(85,018)
Accounts payable and accrued expenses and other	(9,223)	3,245
Deferred income	10,131	58
Income taxes payable	24,431	(4,403)
Net cash provided by operating activities	307,184	110,758
Cash flows from investing activities:
Purchases of investment securities	(294,196)	(248,176)
Sales or maturities of investment securities	195,601	282,422
Acquisition of business, net of cash acquired	(12,470)	(2,197)
Receivables from affiliates	0	(170)
Purchase of property and equipment, net	(11,002)	(16,971)
Net cash provided by/(used in) investing activities	(122,067)	14,908
Cash flows from financing activities:
Dividends paid	(70,302)	(61,104)
Share repurchases	(41,814)	(27,828)
Payments to settle employee tax obligations on share-based awards	(17,810)	(31,469)
Proceeds from issuance of Class A shares	189,060	0
Loans payable to former shareholders redeemed	(386)	(446)
Repayments of loans to non-affiliates	(1,900)	(10,786)
Other financing activities	333	369
Net cash provided by/(used in) financing activities	57,181	(131,264)
Effects of exchange rate changes on cash, cash equivalents, and restricted cash	10,988	(3,409)
Net increase/(decrease) in cash, cash equivalents, and restricted cash	253,286	(9,007)
Cash, cash equivalents, and restricted cash – beginning of period	380,746	286,115
Cash, cash equivalents, and restricted cash – end of period	634,032	277,108
Supplemental disclosures of non-cash activities:
Shares issued via vesting of liability classified awards	7,511	6,453
Cash acquired through acquisitions	88	15,755
Cash paid during the period:
Interest	744	657
Taxes, net of refunds	$ 33,692	$ 53,358

XML

BACKGROUND

9 Months Ended

Dec. 31, 2020

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.

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.

In August 2020, the Company completed the acquisition of MVP Capital, LLC ("MVP"), an independent advisory firm that provides a range of financial advisory services to clients in the technology, media, and telecommunications sectors.

The Company offers financial services and financial advice to a broad clientele located throughout the United States of America, Europe, the Middle East, and the Asia-Pacific region. The Company has U.S. offices in Los Angeles, San Francisco, Chicago, New York City, Minneapolis, McLean (Virginia), Boston, Dallas, Houston, Miami, and Atlanta as well as foreign offices in London, Paris, Frankfurt, Milan, 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") 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.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Dec. 31, 2020

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, 2020 are not necessarily indicative of the results of operations to be expected for the fiscal year ending March 31, 2021. 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, 2020 (the "2020 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 credit losses; 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 contracts. Revenues reflect fees generated from our CF, FR, and FVA business segments.

The Company generates revenues from contractual advisory services and reimbursed costs incurred in fulfilling the contracts for such services. 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., the success related Completion Fees) are considered variable and constrained as they are contingent upon a future event which includes factors outside of our control (e.g., completion of a transaction or third party emergence from bankruptcy or approval by the court).

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.

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 considered variable and constrained until the related transaction has been effectively closed as they are contingent upon a future event which includes factors outside of our control (e.g., completion of a transaction or third party emergence from bankruptcy or approval by the court).

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.

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. We did not have any outstanding foreign currency forward contracts as of December 31, 2020. 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.

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.

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.

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, 2020 and March 31, 2020, 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, 2020		March 31, 2020
Cash and cash equivalents	$	633,659	$	380,373
Restricted cash (1)	373		373
Total cash, cash equivalents, and restricted cash	$	634,032	$	380,746

(1)Restricted cash as of December 31, 2020 and March 31, 2020 consisted of a cash secured letter of credit issued for our Frankfurt office.

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 (income)/expense, net in the accompanying Consolidated Statements of Comprehensive Income.     

Allowance for Credit Losses

The allowance for credit losses on accounts receivable and unbilled work in progress reflects management’s best estimate of expected losses using the Company's internal current expected credit losses model. This model analyzes expected losses based on relevant information about historical experience, current conditions, and reasonable and supportable forecasts that could potentially affect the collectibility of the reported amounts. This 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 credit losses.

Income Taxes

The Company files a consolidated federal income tax return, 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.

On March 27, 2020 the United States enacted into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act and on December 27, 2020, the President signed into law the Coronavirus Response and Relief Supplemental Appropriations Act. These laws are meant to address the economic uncertainty as a result of the coronavirus pandemic. The Company has completed its evaluation of the provisions of these laws, which resulted in no material impacts on its income tax provision.

Leases

We assess whether an arrangement is or contains a lease at the inception of the agreement. Right-of-use ("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.

Goodwill and 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, 2020, 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, 2020, 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, 2020, no events or changes in circumstances were identified that indicated that the carrying amount of the finite-lived intangible assets were not recoverable.

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.

On April 1, 2020, we adopted ASU 2016-13 Financial Instruments—Credit Losses — Measurement of Credit Losses on Financial Instruments, and all related amendments, under a modified retrospective approach. Upon adoption, a cumulative transition adjustment was recorded, which reduced retained earnings by $(924). The tax impact of this adjustment increased retained earnings by $242, resulting in a net decrease to retained earnings of $(682) as of April 1, 2020. The impact of this pronouncement had an immaterial impact on our Net income for the nine months ended December 31, 2020.

The following table provides a reconciliation of the cumulative transition adjustment pertaining to the adoption of the credit loss guidance reported within the Consolidated Balance Sheets.

	March 31, 2020		Transition Adjustment		April 1, 2020
Accounts receivable, net of allowance for credit losses	$	80,912	$	(599)	$	80,313
Unbilled work in progress, net of allowance for credit losses	39,821		(232)		39,589
Other assets	38,890		(93)		38,797
Deferred income taxes, net	5,843		242		6,085
Retained earnings	$	377,471	$	(682)	$	376,789

XML

REVENUE RECOGNITION

3 Months Ended

Dec. 31, 2020

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

Revenue Recognition

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, 2020		Increase/(Decrease)		December 31, 2020
Receivables (1)	$	73,720	$	(2,148)	$	71,572
Unbilled work in process, net of allowance for credit losses	39,821		13,253		53,074
Contract Assets (1)	7,192		205		7,397
Contract Liabilities (2)	26,780		10,228		37,008

(1)Included within Accounts receivable, net of allowance for credit losses in the December 31, 2020 Consolidated Balance Sheet.

(2)Included within Deferred income in the December 31, 2020 Consolidated Balance Sheet.

During the three and nine months ended December 31, 2020, $6.0 million and $15.6 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, 2020.

XML

RELATED PARTY TRANSACTIONS

9 Months Ended

Dec. 31, 2020

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

Related Party Transactions

The Company provides financial advisory services to its affiliates and certain other related parties, and received fees for these services totaling approximately $108 and $0 during the three months ended December 31, 2020 and 2019, respectively, and $233 and $698 for the nine months ended December 31, 2020 and 2019, respectively.

The Company provided certain management and administrative services for the Company's unconsolidated entities and received fees for these services. No such fees were recognized during the three months ended December 31, 2020 and 2019; however, the Company received net fees of $0 and $126 during the nine months ended December 31, 2020 and 2019, respectively.

In the accompanying Consolidated Balance Sheets, the Company carried accounts receivable and unbilled work in progress from related parties totaling approximately $26 and $0 as of December 31, 2020 and March 31, 2020, respectively.

Other assets in the accompanying Consolidated Balance Sheets includes loans receivable from certain employees of $16,932 and $17,857 as of December 31, 2020 and March 31, 2020, respectively.

XML

FAIR VALUE MEASUREMENTS

9 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

Fair Value Measurements

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

	December 31, 2020
	Level 1		Level 2		Level 3		Total
Corporate debt securities	$	—	$	206,729	$	—	$	206,729
U.S. treasury securities	—		27,847		—		27,847
Total asset measured at fair value	$	—	$	234,576	$	—	$	234,576

	March 31, 2020
	Level 1		Level 2		Level 3		Total
Corporate debt securities	$	—	$	43,027	$	—	$	43,027
U.S. treasury securities	—		92,362		—		92,362
Total asset measured at fair value	$	—	$	135,389	$	—	$	135,389

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, 2020.

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, 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.

XML

INVESTMENT SECURITIES

9 Months Ended

Dec. 31, 2020

Investments, Debt and Equity Securities [Abstract]

INVESTMENT SECURITIES

Investment Securities

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

	December 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
Corporate debt securities	$	206,055	$	688	$	(14)	$	206,729
U.S. treasury securities	27,429		418		—		27,847
Total securities with unrealized gains	$	233,484	$	1,106	$	(14)	$	234,576

	March 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
Corporate debt securities	$	43,166	$	210	$	(349)	$	43,027
U.S. treasury securities	91,722		691		(51)		92,362
Total securities with unrealized gains	$	134,888	$	901	$	(400)	$	135,389

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

	December 31, 2020				March 31, 2020
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due within one year	$	203,913	$	203,982	$	105,349	$	105,302
Due within years two through five	29,571		30,594		29,539		30,087
Total debt within the investment securities portfolio	$	233,484	$	234,576	$	134,888	$	135,389

XML

ALLOWANCE FOR CREDIT LOSSES

9 Months Ended

Dec. 31, 2020

Receivables [Abstract]

ALLOWANCE FOR CREDIT LOSSES

Allowance for Credit Losses

	December 31, 2020		March 31, 2020
Beginning balance	$	6,889	$	5,596
Transition adjustment as of April 1, 2020	831		—
Provision for bad debt, net	4,829		4,873
Recovery or write-off of uncollectible accounts	(2,747)		(3,580)
Ending balance	$	9,802	$	6,889

XML

PROPERTY AND EQUIPMENT

9 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

Property and Equipment

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

	December 31, 2020		March 31, 2020
Equipment	$	9,679	$	8,788
Furniture and fixtures	21,707		20,942
Leasehold improvements	50,939		41,643
Computers and software	19,291		17,941
Other	1,122		1,113
Total cost	102,738		90,427
Less: accumulated depreciation	(56,571)		(48,055)
Total net book value	$	46,167	$	42,372

Additions to property and equipment during the nine months ended December 31, 2020 were primarily related to leasehold improvement costs incurred and computer and software purchases.

Depreciation expense of $2,756 and $2,423 was recognized during the three months ended December 31, 2020 and 2019, respectively, and $8,212 and $7,101 was recognized during the nine months ended December 31, 2020 and 2019, respectively

XML

GOODWILL AND OTHER INTANGIBLE ASSETS

9 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and Other Intangible Assets

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

	Useful Lives	December 31, 2020		March 31, 2020
Goodwill	Indefinite	$	670,200	$	618,455
Tradename-Houlihan Lokey	Indefinite	192,210		192,210
Other intangible assets	Varies	6,954		10,732
Total cost		869,364		821,397
Less: accumulated amortization		(2,926)		(8,553)
Goodwill and other intangibles, net		$	866,438	$	812,844

Goodwill attributable to the Company’s business segments is as follows:

	April 1, 2020		Change (1)		December 31, 2020
Corporate Finance	$	363,925	$	51,745	$	415,670
Financial Restructuring	162,815		—		162,815
Financial and Valuation Advisory	91,715		—		91,715
Goodwill	$	618,455	$	51,745	$	670,200

(1)Changes pertain to the 2020 acquisition referenced in Note 1 and foreign currency translation adjustments.

Amortization expense of approximately $1,193 and $1,913 was recognized for the three months ended December 31, 2020 and 2019, respectively, and $3,079 and $5,179 was recognized for the nine months ended December 31, 2020 and 2019, respectively.

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

	Year Ended March 31,
Remainder of 2021	$	1,082
2022	2,207
2023	325
2024	7
2025	7

XML

LOANS PAYABLE

9 Months Ended

Dec. 31, 2020

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. 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, 2020, no principal was outstanding under the 2019 Line of Credit.

Prior to the IPO, Fram Holdings, Inc., a Delaware corporation and, prior to our IPO, our indirect parent company, 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 1.46% and 3.1% as of December 31, 2020 and 2019, respectively, and the maturity dates range from 2020 to 2027. The Company incurred interest expense on these notes of $5 and $15 during the three months ended December 31, 2020 and 2019, respectively, and $18 and $52 during the nine months ended December 31, 2020 and 2019, 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 loan had an annual interest 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. During the three months ended December 31, 2020, the Company completed its final scheduled principal payment, extinguishing the liability. The company incurred interest expense on this loan of $6 and $17 during the three months ended December 31, 2020 and 2019, respectively, and $30 and $64 during the nine months ended December 31, 2020 and 2019, respectively.

As described in Note 1, in June 2019, 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 $0 and $999 as of December 31, 2020 and March 31, 2020, respectively, which is included in Other liabilities in our 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 Class B common 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 $68 and $99 for the three months ended December 31, 2020 and 2019, respectively, and $218 and $228 for the nine months ended December 31, 2020 and 2019, 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. This note was subsequently assigned by the seller to the former BearTooth principals (who became employees of the Company), and, under certain circumstances, is convertible into Company Class B common stock after the fifth anniversary of the closing of the transaction. The Company incurred interest expense on this note of $26 for each of the three months ended December 31, 2020 and 2019, and $79 for each of the nine months ended December 31, 2020 and 2019.

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 note issued by the Company to the seller was distributed to the former principals of Freeman & Co. (who became employees of the Company). Under certain circumstances, the note may be exchanged by each principal for Company stock over a four-year period in equal annual installments starting in December 2020. The Company incurred interest expense on this note of $28 and $83 for the three and nine months ended December 31, 2020, respectively.

In August 2020, the Company acquired MVP. Total consideration included an unsecured non-interest bearing note of $4.5 million payable August 14, 2050. The note was issued by the Company to the former principals and sellers of MVP (who became employees of the Company). Under certain circumstances, the note may be exchanged by each seller for a combination of cash and Company stock over a three-year period in equal annual installments starting in August 2021. Contingent consideration was also issued in connection with the acquisition of MVP, with a carrying value of $17.0 million as of December 31, 2020, which is included in Other liabilities in our Consolidated Balance Sheets.

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, 2020 are as follows:

Remaining 2021	$	975
2022	12,214
2023	15,580
2024	6,588
2025	—
2026 and thereafter	13,242
Total	$	48,599

XML

ACCUMULATED OTHER COMPREHENSIVE (LOSS)

9 Months Ended

Dec. 31, 2020

Equity [Abstract]

ACCUMULATED OTHER COMPREHENSIVE (LOSS)

Accumulated Other Comprehensive (Loss)

Accumulated other comprehensive (loss) is comprised of Foreign currency translation adjustments of $14,037 and $14,388 for the three months ended December 31, 2020 and 2019, respectively, and $22,407 and $977 for the nine months ended December 31, 2020 and 2019, respectively. We do not expect the change in foreign currency translation to have a material impact on our operating results and financial position.

Accumulated other comprehensive (loss) as of December 31, 2020 was comprised of the following:

Balance, April 1, 2020	$	(43,108)
Foreign currency translation adjustment	22,407
Balance, December 31, 2020	$	(20,701)

XML

INCOME TAXES	9 Months Ended
	Dec. 31, 2020
Income Tax Disclosure [Abstract]
INCOME TAXES	Income TaxesThe Company’s provision for income taxes was $40,088 and $20,161 for the three months ended December 31, 2020 and 2019, respectively, and $56,020 and $39,954 for the nine months ended December 31, 2020 and 2019, respectively. These represent effective tax rates of 25.3% and 29.2% for the three months ended December 31, 2020 and 2019, respectively, and 20.8% and 24.3% for the nine months ended December 31, 2020 and 2019, respectively.

XML

EARNINGS PER SHARE

9 Months Ended

Dec. 31, 2020

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,
	2020		2019		2020		2019
Numerator:
Net income attributable to holders of shares of common stock—basic	$	118,515	$	48,894	$	213,405	$	124,779
Net income attributable to holders of shares of common stock—diluted	$	118,515	$	48,894	$	213,405	$	124,779
Denominator:
Weighted average shares of common stock outstanding—basic	66,547,587		62,014,564		65,680,516		62,199,716
Weighted average number of incremental shares pertaining to unvested restricted stock and issuable in respect of unvested restricted stock units, as calculated using the treasury stock method	2,808,760		3,593,462		2,915,987		3,570,340
Weighted average shares of common stock outstanding—diluted	69,356,347		65,608,026		68,596,503		65,770,056
Basic earnings per share	$	1.78	$	0.79	$	3.25	$	2.01
Diluted earnings per share	$	1.71	$	0.75	$	3.11	$	1.90

XML

EMPLOYEE BENEFIT PLANS

9 Months Ended

Dec. 31, 2020

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 $2,327 and $1,815 to these plans during the three months ended December 31, 2020 and 2019, respectively, and $4,368 and $3,524 during the nine months ended December 31, 2020 and 2019, respectively.

Share-Based Incentive Plans

Following the IPO, additional awards of restricted shares and restricted stock units 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 48,716 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, (vii) one independent director in the third quarter of fiscal 2020 at $47.21 per share, (viii) four independent directors in the first quarter of fiscal 2021 at $60.60 per share, and (ix) two independent directors in the third quarter of fiscal 2021 at $63.01 per share.

No excess tax benefit was recognized during the three months ended December 31, 2020 and 2019. An excess tax benefit of $13,408 and $7,605 was recognized during the nine months ended December 31, 2020 and 2019, respectively, as a component of the provision for income taxes and an operating activity on the Consolidated Statements of Cash Flows. The excess tax benefits recognized during the nine months ended December 31, 2020 and 2019 were related to shares vested in April and May 2020 and 2019, 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, 2020 and 2019 is as follows:

Unvested Share Awards	Shares	Weighted Average Grant Date Fair Value
Balance, April 1, 2020	3,539,047	$	39.13
Granted	1,044,741	60.60
Vested	(1,770,294)	32.36
Forfeited/Repurchased	(60,904)	50.69
Balance, December 31, 2020	2,752,590	$	51.37
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

Activity in liability classified share awards during the nine months ended December 31, 2020 and 2019 is as follows:

Awards Settleable in Shares	Fair Value
Balance, April 1, 2020	$	20,989
Offer to grant	5,655
Share price determined-converted to cash payments	(249)
Share price determined-transferred to equity grants	(7,223)
Forfeited	(1,756)
Balance, December 31, 2020	$	17,416
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

Compensation expenses for the Company associated with both equity and liability classified awards totaled $12,642 and $16,682 for the three months ended December 31, 2020 and 2019, respectively, and $46,779 and $47,791 for the nine months ended December 31, 2020 and 2019, respectively.

As of December 31, 2020 and 2019, there was $143,660 and $139,061, respectively, of total unrecognized compensation cost related to unvested share awards granted under both the 2006 Incentive Plan and 2016 Incentive Plan. These costs are recognized over a weighted average period of 1.4 years and 1.2 years, as of December 31, 2020 and 2019, respectively.

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 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.

XML

STOCKHOLDERS' EQUITY

9 Months Ended

Dec. 31, 2020

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.

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.

On May 20, 2020, the Company completed an underwritten public offering of 3,000,000 shares of its Class A common stock. The offering generated net proceeds for the Company of approximately $188.7 million after deducting the underwriting discount and estimated offering expenses payable by us.

On August 14, 2020, the Company completed the acquisition of MVP. Consideration included 192,247 unrestricted shares of the Company’s Class B Common Stock and 104,862 restricted shares of the Company's Class B common stock, that are subject to certain repurchase rights in favor of the Company. The Company registered for resale shares of Class A common stock issuable upon conversion of such unrestricted shares of Class B common stock pursuant to a prospectus supplement filed with the SEC on August 28, 2020.

Class A common stock

During the three months ended December 31, 2020 and 2019, 3,174 and 2,118 shares were issued to non-employee directors, respectively, and 790,025 and 2,100,523 were converted from Class B to Class A, respectively. During the nine months ended December 31, 2020 and 2019, 8,751 and 9,145 shares were issued to non-employee directors, respectively, and 3,121,294 and 5,992,399 were converted from Class B to Class A, respectively. As of December 31, 2020, there were 51,578,208 Class A shares held by the public and 45,475 Class A shares held by non-employee directors. 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

As of December 31, 2020 and 2019, there were 17,472,592 and 21,998,937, respectively, Class B shares held by the HL Voting Trust.

Dividends

Previously declared dividends related to unvested shares of $5,846 and $7,719 were unpaid as of December 31, 2020 and 2019, 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 July 2018, the board of directors authorized the repurchase of up to an additional $100 million of the Company's common stock.

In July 2020, the board of directors authorized a new share repurchase program to replace the aforementioned July 2018, $100 million repurchase authority. Under the July 2020 share repurchase program, the Company is authorized to acquire an aggregate amount of up to $125 million of the Company's Class A common stock and Class B common stock. In January 2021, the board of directors authorized an increase to the existing July 2020 share repurchase program to a new aggregate amount of up to $200 million of the Company's Class A common stock and Class B common stock.

During the three months ended December 31, 2020 and 2019, the Company repurchased 295 and 1,350 shares, respectively, of Class B common stock, to satisfy $19 and $65 of required withholding taxes in connection with the vesting of restricted awards, respectively. During the three months ended December 31, 2020 the Company repurchased an additional 283,035 shares of its outstanding common stock at a weighted average price of $65.69 per share, excluding commissions, for an aggregate purchase price of $18,593. During the three months ended December 31, 2019, the Company repurchased an additional 97,956 shares of its outstanding common stock at a weighted average price of and $44.12 per share, excluding commissions, for an aggregate purchase price of $4,322.

During the nine months ended December 31, 2020 and 2019, the Company repurchased 286,730 and 610,943 shares, respectively, of Class B common stock, to satisfy $17,810 and $29,349 of required withholding taxes in connection with the vesting of restricted awards, respectively. During the nine months ended December 31, 2020, the Company repurchased an additional 684,995 shares of its outstanding common stock at a weighted average price of $61.01 per share, excluding commissions, for an aggregate purchase price of $41,793. During the nine months ended December 31, 2019, the Company repurchased an additional 632,353 shares of its outstanding common stock at a weighted average price of $43.98 per share, excluding commissions, for an aggregate purchase price of $27,809.

XML

LEASES

9 Months Ended

Dec. 31, 2020

Leases [Abstract]

LEASES

Leases

Lessee Arrangements

Operating Leases

We lease real estate and equipment used in operations from third parties. As of December 31, 2020, the remaining term of our operating leases ranged from 1 to 16 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, 2020.

	Operating Leases
Remaining 2021	$	7,657
2022	28,888
2023	24,098
2024	18,833
2025	19,918
Thereafter	101,286
Total	200,680
Less: present value discount	(32,113)
Operating lease liabilities	$	168,567

During the three months ended December 31, 2020, the Company entered into one additional office space operating lease that has not yet commenced, for approximately $1.5 million. This operating lease is expected to commence January 2021 with a lease term of 6 years.

Lease costs

	Three Months Ended December 31,				Nine Months Ended December 31,
	2020		2019		2020		2019
Operating lease expense	$	7,169	$	6,466	$	21,967	$	21,729
Variable lease expense (1)	2,913		2,999		8,040		12,675
Short-term lease expense	57		114		157		195
Less: Sublease income	(53)		(48)		(154)		(145)
Total lease costs	$	10,086	$	9,531	$	30,010	$	34,454

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

Weighted-average details

	December 31, 2020
	2020		2019
Weighted-average remaining lease term (years)	9		9
Weighted-average discount rate	3.8	%	4.1	%

Supplemental cash flow information related to leases:

	Nine Months Ended December 31,
	2020		2019
Operating cash flows:
Cash paid for amounts included in the measurement of Operating lease liabilities	$	23,658	$	17,970
Right-of-use assets obtained in exchange for Operating lease liabilities	30,246		—
Non-cash activity:
Increase/(decrease) in Operating lease right-of-use assets due to remeasurement	$	(1,208)	$	(5,883)

XML

COMMITMENTS AND CONTINGENCIES

9 Months Ended

Dec. 31, 2020

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, 2020 or March 31, 2020.

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 2020 Annual Report.

XML

SEGMENT AND GEOGRAPHICAL INFORMATION

9 Months Ended

Dec. 31, 2020

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,
	2020		2019		2020		2019
Revenues by segment
Corporate Finance	$	306,171	$	201,137	$	502,191	$	490,707
Financial Restructuring	177,995		92,808		392,006		249,438
Financial and Valuation Advisory	53,710		39,570		130,551		116,529
Revenues	$	537,876	$	333,515	$	1,024,748	$	856,674
Segment profit (1)
Corporate Finance	$	96,431	$	58,495	$	143,167	$	138,611
Financial Restructuring	78,855		28,391		169,832		75,956
Financial and Valuation Advisory	13,901		7,163		33,213		24,384
Total segment profit	189,187		94,049		346,212		238,951
Corporate expenses (2)	30,771		26,033		78,331		78,005
Other (income)/expense, net	(187)		(1,039)		(1,544)		(3,787)
Income before provision for income taxes	$	158,603	$	69,055	$	269,425	$	164,733

(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, 2020		March 31, 2020
Assets by segment
Corporate Finance	$	492,212	$	403,147
Financial Restructuring	170,997		186,418
Financial and Valuation Advisory	136,761		127,440
Total segment assets	799,970		717,005
Corporate assets	1,319,829		959,998
Total assets	$	2,119,799	$	1,677,003

	Three Months Ended December 31,				Nine Months Ended December 31,
	2020		2019		2020		2019
Income before provision for income taxes by geography
United States	$	123,774	$	58,349	$	210,580	$	132,846
International	34,829		10,706		58,845		31,887
Income before provision for income taxes	$	158,603	$	69,055	$	269,425	$	164,733

	Three Months Ended December 31,				Nine Months Ended December 31,
	2020		2019		2020		2019
Revenues by geography
United States	$	414,891	$	294,083	$	815,904	$	740,520
International	122,985		39,432		208,844		116,154
Revenues	$	537,876	$	333,515	$	1,024,748	$	856,674

	December 31, 2020		March 31, 2020
Assets by geography
United States	1,635,642		1,135,871
International	484,157		541,132
Total assets	$	2,119,799	$	1,677,003

XML

SUBSEQUENT EVENTS

9 Months Ended

Dec. 31, 2020

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

Subsequent Events

On January 20, 2021, the Company's board of directors declared a quarterly cash dividend of $0.33 per share of Class A and Class B common stock, payable on March 15, 2021, to shareholders of record on March 2, 2021.

On February 1, 2021, Advanced Merger Partners, Inc., a special purpose acquisition company of which an affiliate of the Company is acting as a sponsor, filed a registration statement for an initial public offering. The Company has agreed to invest up to approximately $7 million in the company and may provide services to it in the future.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Basis of Presentation

Basis of PresentationThe 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, 2020 are not necessarily indicative of the results of operations to be expected for the fiscal year ending March 31, 2021. 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, 2020 (the "2020 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 credit losses; 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 contracts. Revenues reflect fees generated from our CF, FR, and FVA business segments.

The Company generates revenues from contractual advisory services and reimbursed costs incurred in fulfilling the contracts for such services. 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., the success related Completion Fees) are considered variable and constrained as they are contingent upon a future event which includes factors outside of our control (e.g., completion of a transaction or third party emergence from bankruptcy or approval by the court).

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.

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 considered variable and constrained until the related transaction has been effectively closed as they are contingent upon a future event which includes factors outside of our control (e.g., completion of a transaction or third party emergence from bankruptcy or approval by the court).

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.

Operating ExpensesThe 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, 2020 and March 31, 2020, 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, 2020		March 31, 2020
Cash and cash equivalents	$	633,659	$	380,373
Restricted cash (1)	373		373
Total cash, cash equivalents, and restricted cash	$	634,032	$	380,746

(1)Restricted cash as of December 31, 2020 and March 31, 2020 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.

On April 1, 2020, we adopted ASU 2016-13 Financial Instruments—Credit Losses — Measurement of Credit Losses on Financial Instruments, and all related amendments, under a modified retrospective approach. Upon adoption, a cumulative transition adjustment was recorded, which reduced retained earnings by $(924). The tax impact of this adjustment increased retained earnings by $242, resulting in a net decrease to retained earnings of $(682) as of April 1, 2020. The impact of this pronouncement had an immaterial impact on our Net income for the nine months ended December 31, 2020.

The following table provides a reconciliation of the cumulative transition adjustment pertaining to the adoption of the credit loss guidance reported within the Consolidated Balance Sheets.

	March 31, 2020		Transition Adjustment		April 1, 2020
Accounts receivable, net of allowance for credit losses	$	80,912	$	(599)	$	80,313
Unbilled work in progress, net of allowance for credit losses	39,821		(232)		39,589
Other assets	38,890		(93)		38,797
Deferred income taxes, net	5,843		242		6,085
Retained earnings	$	377,471	$	(682)	$	376,789

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Dec. 31, 2020

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, 2020		March 31, 2020
Cash and cash equivalents	$	633,659	$	380,373
Restricted cash (1)	373		373
Total cash, cash equivalents, and restricted cash	$	634,032	$	380,746

(1)Restricted cash as of December 31, 2020 and March 31, 2020 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, 2020		March 31, 2020
Cash and cash equivalents	$	633,659	$	380,373
Restricted cash (1)	373		373
Total cash, cash equivalents, and restricted cash	$	634,032	$	380,746

(1)Restricted cash as of December 31, 2020 and March 31, 2020 consisted of a cash secured letter of credit issued for our Frankfurt office.

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

The following table provides a reconciliation of the cumulative transition adjustment pertaining to the adoption of the credit loss guidance reported within the Consolidated Balance Sheets.

	March 31, 2020		Transition Adjustment		April 1, 2020
Accounts receivable, net of allowance for credit losses	$	80,912	$	(599)	$	80,313
Unbilled work in progress, net of allowance for credit losses	39,821		(232)		39,589
Other assets	38,890		(93)		38,797
Deferred income taxes, net	5,843		242		6,085
Retained earnings	$	377,471	$	(682)	$	376,789

XML

REVENUE RECOGNITION (Tables)

9 Months Ended

Dec. 31, 2020

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, 2020		Increase/(Decrease)		December 31, 2020
Receivables (1)	$	73,720	$	(2,148)	$	71,572
Unbilled work in process, net of allowance for credit losses	39,821		13,253		53,074
Contract Assets (1)	7,192		205		7,397
Contract Liabilities (2)	26,780		10,228		37,008

(1)Included within Accounts receivable, net of allowance for credit losses in the December 31, 2020 Consolidated Balance Sheet.

(2)Included within Deferred income in the December 31, 2020 Consolidated Balance Sheet.

XML

FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Schedule of Information About Other Financial Assets

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

	December 31, 2020
	Level 1		Level 2		Level 3		Total
Corporate debt securities	$	—	$	206,729	$	—	$	206,729
U.S. treasury securities	—		27,847		—		27,847
Total asset measured at fair value	$	—	$	234,576	$	—	$	234,576

	March 31, 2020
	Level 1		Level 2		Level 3		Total
Corporate debt securities	$	—	$	43,027	$	—	$	43,027
U.S. treasury securities	—		92,362		—		92,362
Total asset measured at fair value	$	—	$	135,389	$	—	$	135,389

XML

INVESTMENT SECURITIES (Tables)

9 Months Ended

Dec. 31, 2020

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, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
Corporate debt securities	$	206,055	$	688	$	(14)	$	206,729
U.S. treasury securities	27,429		418		—		27,847
Total securities with unrealized gains	$	233,484	$	1,106	$	(14)	$	234,576

	March 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
Corporate debt securities	$	43,166	$	210	$	(349)	$	43,027
U.S. treasury securities	91,722		691		(51)		92,362
Total securities with unrealized gains	$	134,888	$	901	$	(400)	$	135,389

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, 2020				March 31, 2020
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due within one year	$	203,913	$	203,982	$	105,349	$	105,302
Due within years two through five	29,571		30,594		29,539		30,087
Total debt within the investment securities portfolio	$	233,484	$	234,576	$	134,888	$	135,389

XML

ALLOWANCE FOR CREDIT LOSSES (Tables)

9 Months Ended

Dec. 31, 2020

Receivables [Abstract]

Allowance for Uncollectible Accounts Receivable

	December 31, 2020		March 31, 2020
Beginning balance	$	6,889	$	5,596
Transition adjustment as of April 1, 2020	831		—
Provision for bad debt, net	4,829		4,873
Recovery or write-off of uncollectible accounts	(2,747)		(3,580)
Ending balance	$	9,802	$	6,889

XML

PROPERTY AND EQUIPMENT (Tables)

9 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

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

	December 31, 2020		March 31, 2020
Equipment	$	9,679	$	8,788
Furniture and fixtures	21,707		20,942
Leasehold improvements	50,939		41,643
Computers and software	19,291		17,941
Other	1,122		1,113
Total cost	102,738		90,427
Less: accumulated depreciation	(56,571)		(48,055)
Total net book value	$	46,167	$	42,372

XML

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

9 Months Ended

Dec. 31, 2020

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 our Consolidated Balance Sheets.

	Useful Lives	December 31, 2020		March 31, 2020
Goodwill	Indefinite	$	670,200	$	618,455
Tradename-Houlihan Lokey	Indefinite	192,210		192,210
Other intangible assets	Varies	6,954		10,732
Total cost		869,364		821,397
Less: accumulated amortization		(2,926)		(8,553)
Goodwill and other intangibles, net		$	866,438	$	812,844

Schedule of Goodwill

Goodwill attributable to the Company’s business segments is as follows:

	April 1, 2020		Change (1)		December 31, 2020
Corporate Finance	$	363,925	$	51,745	$	415,670
Financial Restructuring	162,815		—		162,815
Financial and Valuation Advisory	91,715		—		91,715
Goodwill	$	618,455	$	51,745	$	670,200

(1)Changes pertain to the 2020 acquisition referenced in Note 1 and foreign currency translation adjustments.

Estimated Future Amortization for Amortizable Intangible Assets

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

	Year Ended March 31,
Remainder of 2021	$	1,082
2022	2,207
2023	325
2024	7
2025	7

XML

LOANS PAYABLE LOANS PAYABLE (Tables)

9 Months Ended

Dec. 31, 2020

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, 2020 are as follows:

Remaining 2021	$	975
2022	12,214
2023	15,580
2024	6,588
2025	—
2026 and thereafter	13,242
Total	$	48,599

XML

ACCUMULATED OTHER COMPREHENSIVE (LOSS) (Tables)

9 Months Ended

Dec. 31, 2020

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Loss

Accumulated other comprehensive (loss) as of December 31, 2020 was comprised of the following:

Balance, April 1, 2020	$	(43,108)
Foreign currency translation adjustment	22,407
Balance, December 31, 2020	$	(20,701)

XML

EARNINGS PER SHARE (Tables)

9 Months Ended

Dec. 31, 2020

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,
	2020		2019		2020		2019
Numerator:
Net income attributable to holders of shares of common stock—basic	$	118,515	$	48,894	$	213,405	$	124,779
Net income attributable to holders of shares of common stock—diluted	$	118,515	$	48,894	$	213,405	$	124,779
Denominator:
Weighted average shares of common stock outstanding—basic	66,547,587		62,014,564		65,680,516		62,199,716
Weighted average number of incremental shares pertaining to unvested restricted stock and issuable in respect of unvested restricted stock units, as calculated using the treasury stock method	2,808,760		3,593,462		2,915,987		3,570,340
Weighted average shares of common stock outstanding—diluted	69,356,347		65,608,026		68,596,503		65,770,056
Basic earnings per share	$	1.78	$	0.79	$	3.25	$	2.01
Diluted earnings per share	$	1.71	$	0.75	$	3.11	$	1.90

XML

EMPLOYEE BENEFIT PLANS (Tables)

9 Months Ended

Dec. 31, 2020

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, 2020 and 2019 is as follows:

Unvested Share Awards	Shares	Weighted Average Grant Date Fair Value
Balance, April 1, 2020	3,539,047	$	39.13
Granted	1,044,741	60.60
Vested	(1,770,294)	32.36
Forfeited/Repurchased	(60,904)	50.69
Balance, December 31, 2020	2,752,590	$	51.37
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

Activity in Liability Classified Share Awards

Activity in liability classified share awards during the nine months ended December 31, 2020 and 2019 is as follows:

Awards Settleable in Shares	Fair Value
Balance, April 1, 2020	$	20,989
Offer to grant	5,655
Share price determined-converted to cash payments	(249)
Share price determined-transferred to equity grants	(7,223)
Forfeited	(1,756)
Balance, December 31, 2020	$	17,416
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

XML

LEASES (Tables)

9 Months Ended

Dec. 31, 2020

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, 2020.

	Operating Leases
Remaining 2021	$	7,657
2022	28,888
2023	24,098
2024	18,833
2025	19,918
Thereafter	101,286
Total	200,680
Less: present value discount	(32,113)
Operating lease liabilities	$	168,567

Lease, Cost

Lease costs

	Three Months Ended December 31,				Nine Months Ended December 31,
	2020		2019		2020		2019
Operating lease expense	$	7,169	$	6,466	$	21,967	$	21,729
Variable lease expense (1)	2,913		2,999		8,040		12,675
Short-term lease expense	57		114		157		195
Less: Sublease income	(53)		(48)		(154)		(145)
Total lease costs	$	10,086	$	9,531	$	30,010	$	34,454

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

Weighted-average details

	December 31, 2020
	2020		2019
Weighted-average remaining lease term (years)	9		9
Weighted-average discount rate	3.8	%	4.1	%

Supplemental cash flow information related to leases:

	Nine Months Ended December 31,
	2020		2019
Operating cash flows:
Cash paid for amounts included in the measurement of Operating lease liabilities	$	23,658	$	17,970
Right-of-use assets obtained in exchange for Operating lease liabilities	30,246		—
Non-cash activity:
Increase/(decrease) in Operating lease right-of-use assets due to remeasurement	$	(1,208)	$	(5,883)

XML

SEGMENT AND GEOGRAPHICAL INFORMATION (Tables)

9 Months Ended

Dec. 31, 2020

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,
	2020		2019		2020		2019
Revenues by segment
Corporate Finance	$	306,171	$	201,137	$	502,191	$	490,707
Financial Restructuring	177,995		92,808		392,006		249,438
Financial and Valuation Advisory	53,710		39,570		130,551		116,529
Revenues	$	537,876	$	333,515	$	1,024,748	$	856,674
Segment profit (1)
Corporate Finance	$	96,431	$	58,495	$	143,167	$	138,611
Financial Restructuring	78,855		28,391		169,832		75,956
Financial and Valuation Advisory	13,901		7,163		33,213		24,384
Total segment profit	189,187		94,049		346,212		238,951
Corporate expenses (2)	30,771		26,033		78,331		78,005
Other (income)/expense, net	(187)		(1,039)		(1,544)		(3,787)
Income before provision for income taxes	$	158,603	$	69,055	$	269,425	$	164,733

(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, 2020		March 31, 2020
Assets by segment
Corporate Finance	$	492,212	$	403,147
Financial Restructuring	170,997		186,418
Financial and Valuation Advisory	136,761		127,440
Total segment assets	799,970		717,005
Corporate assets	1,319,829		959,998
Total assets	$	2,119,799	$	1,677,003

Revenue by Geographic Areas

	Three Months Ended December 31,				Nine Months Ended December 31,
	2020		2019		2020		2019
Income before provision for income taxes by geography
United States	$	123,774	$	58,349	$	210,580	$	132,846
International	34,829		10,706		58,845		31,887
Income before provision for income taxes	$	158,603	$	69,055	$	269,425	$	164,733

	Three Months Ended December 31,				Nine Months Ended December 31,
	2020		2019		2020		2019
Revenues by geography
United States	$	414,891	$	294,083	$	815,904	$	740,520
International	122,985		39,432		208,844		116,154
Revenues	$	537,876	$	333,515	$	1,024,748	$	856,674

Assets by Geographical Areas

	December 31, 2020		March 31, 2020
Assets by geography
United States	1,635,642		1,135,871
International	484,157		541,132
Total assets	$	2,119,799	$	1,677,003

XML

BACKGROUND (Details) - segment	9 Months Ended
	Dec. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Nov. 30, 2015
Class of Stock [Line Items]
Number of business segments	3
Italy | Leonardo & CO. NV
Class of Stock [Line Items]
Investment interest in Italy (as a percent)	51.00%	51.00%	51.00%	49.00%

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) € in Millions	3 Months Ended	9 Months Ended
	Dec. 31, 2019 USD ($) numberOfInstruments	Dec. 31, 2020 segment numberOfInstruments	Dec. 31, 2019 EUR (€) numberOfInstruments
Related Party Transaction [Line Items]
Number of business segments | segment		3
Number of derivative instruments		0
Foreign Currency Forward Contract
Related Party Transaction [Line Items]
Number of derivative instruments	2		2
Aggregate notional value of foreign currency forward contract	$ 5,000,000.0		€ 1.0
Other operating expenses | Foreign Currency Forward Contract
Related Party Transaction [Line Items]
Fair value gains (losses) included in other operating expenses | $	$ 30,000

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019
Accounting Policies [Abstract]
Cash and cash equivalents	$ 633,659	$ 380,373
Restricted cash	373	373
Total cash, cash equivalents, and restricted cash	$ 634,032	$ 380,746	$ 277,108	$ 286,115

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recent Accounting Pronouncements (Details) - USD ($)	Dec. 31, 2020	Apr. 01, 2020	Mar. 31, 2020
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Reduction to retained earnings	$ 1,354,266,000		$ 984,382,000
Accounts receivable, net of allowance for credit losses	78,969,000	$ 80,313,000	80,912,000
Unbilled work in progress, net of allowance for credit losses	53,074,000	39,589,000	39,821,000
Other assets	51,612,000	38,797,000	38,890,000
Deferred income taxes, net		6,085,000	5,843,000
Retained earnings	$ 523,454,000	376,789,000	377,471,000
Cumulative Effect, Period Of Adoption, Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Reduction to retained earnings		(924)	$ (682,000)
Accounts receivable, net of allowance for credit losses		(599,000)
Unbilled work in progress, net of allowance for credit losses		(232,000)
Other assets		(93,000)
Deferred income taxes, net		242,000
Retained earnings		$ (682,000)

XML

REVENUE RECOGNITION - Summary of Receivables, Contract Assets, and Contract Liabilities (Details) $ in Thousands	9 Months Ended
	Dec. 31, 2020 USD ($)
Receivables
Beginning balance	$ 73,720
Increase/(Decrease)	(2,148)
Ending balance	71,572
Unbilled work in process, net of allowance for doubtful accounts
Beginning balance	39,821
Increase/(Decrease)	13,253
Ending balance	53,074
Contract Assets
Beginning balance	7,192
Increase/(Decrease)	205
Ending balance	7,397
Contract Liabilities
Beginning balance	26,780
Increase/(Decrease)	10,228
Ending balance	$ 37,008

XML

REVENUE RECOGNITION - Narrative (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Dec. 31, 2020	Dec. 31, 2020
Revenue from Contract with Customer [Abstract]
Revenue recognized that was previously included in deferred income	$ 6.0	$ 15.6

XML

RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Mar. 31, 2020
Management Accounting Legal Regulatory And Other Administrative Services | ORIX USA Corporation
Related Party Transaction [Line Items]
Related party revenue and income	$ 108	$ 0	$ 233	$ 698
Management And Other Administrative Services | Majority-Owned Subsidiary, Unconsolidated
Related Party Transaction [Line Items]
Related party revenue and income	0	$ 0	0	$ 126
Accounts receivable and unbilled work in process
Related Party Transaction [Line Items]
Due from related parties	26		26		$ 0
Other Assets | Loans Receivable | Certain employees
Related Party Transaction [Line Items]
Due from related parties	$ 16,932		$ 16,932		$ 17,857

XML

FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Mar. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total asset measured at fair value	$ 234,576	$ 135,389
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	234,576	135,389
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	206,729	43,027
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	206,729	43,027
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	0
U.S. treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total asset measured at fair value	27,847	92,362
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	27,847	92,362
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	$ 0

XML

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, 2020	Mar. 31, 2020
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	$ 233,484
Gross Unrealized Gains	1,106
Gross Unrealized (Losses)	(14)
Fair Value	234,576
Amortized Cost		$ 134,888
Gross Unrealized Gains		901
Gross Unrealized (Losses)		(400)
Fair Value		135,389
Corporate debt securities
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	206,055
Gross Unrealized Gains	688
Gross Unrealized (Losses)	(14)
Fair Value	206,729
Amortized Cost		43,166
Gross Unrealized Gains		210
Gross Unrealized (Losses)		(349)
Fair Value		43,027
U.S. treasury securities
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	27,429
Gross Unrealized Gains	418
Gross Unrealized (Losses)	0
Fair Value	$ 27,847
Amortized Cost		91,722
Gross Unrealized Gains		691
Gross Unrealized (Losses)		(51)
Fair Value		$ 92,362

XML

INVESTMENT SECURITIES - Schedule of Maturities of Debt Securities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Mar. 31, 2020
Debt Securities, Held-to-maturity, Maturity [Abstract]
Amortized Cost , due within one year	$ 203,913	$ 105,349
Estimated Fair Value, due within one year	203,982	105,302
Amortized Cost, Due within one year through five years	29,571	29,539
Estimated Fair Value, Due within one year through five years	30,594	30,087
Amortized Cost	233,484	134,888
Estimated Fair Value	$ 234,576	$ 135,389

XML

ALLOWANCE FOR CREDIT LOSSES (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Dec. 31, 2020	Mar. 31, 2020
Allowance for Uncollectible Accounts Receivable
Beginning balance	$ 6,889	$ 5,596
Transition adjustment as of April 1, 2020	9,802	5,596
Provision for bad debt, net	4,829	4,873
Recovery or write-off of uncollectible accounts	(2,747)	(3,580)
Ending balance	9,802	6,889
Cumulative Effect, Period Of Adoption, Adjustment
Allowance for Uncollectible Accounts Receivable
Beginning balance	831
Transition adjustment as of April 1, 2020	$ 831	831
Ending balance		$ 831

XML

PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Mar. 31, 2020
Property, Plant and Equipment [Line Items]
Total cost	$ 102,738		$ 102,738		$ 90,427
Less: accumulated depreciation	(56,571)		(56,571)		(48,055)
Total net book value	46,167		46,167		42,372
Depreciation expense	2,756	$ 2,423	8,212	$ 7,101
Equipment
Property, Plant and Equipment [Line Items]
Total cost	9,679		9,679		8,788
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total cost	21,707		21,707		20,942
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total cost	50,939		50,939		41,643
Computers and software
Property, Plant and Equipment [Line Items]
Total cost	19,291		19,291		17,941
Other
Property, Plant and Equipment [Line Items]
Total cost	$ 1,122		$ 1,122		$ 1,113

XML

GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Mar. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 670,200	$ 618,455
Tradename-Houlihan Lokey	192,210	192,210
Other intangible assets	6,954	10,732
Total cost	869,364	821,397
Less: accumulated amortization	(2,926)	(8,553)
Goodwill and other intangibles, net	$ 866,438	$ 812,844

XML

GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill by Business Segments (Details) $ in Thousands	9 Months Ended
	Dec. 31, 2020 USD ($)
Goodwill
43922	$ 618,455
Changes	51,745
December 31, 2020	670,200
Corporate Finance
Goodwill
43922	363,925
Changes	51,745
December 31, 2020	415,670
Financial Restructuring
Goodwill
43922	162,815
Changes	0
December 31, 2020	162,815
Financial Advisory Services
Goodwill
43922	91,715
Changes	0
December 31, 2020	$ 91,715

XML

GOODWILL AND OTHER INTANGIBLE ASSETS - Finite-Lived Intangible Assets, Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 1,193	$ 1,913	$ 3,079	$ 5,179

XML

GOODWILL AND OTHER INTANGIBLE ASSETS - Finite-Lived Intangible Assets, Amortization Expense, Fiscal Year Maturity (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Remainder of 2021	$ 1,082
2022	2,207
2023	325
2024	7
2025	$ 7

XML

LOANS PAYABLE - Narrative (Details) € in Millions				1 Months Ended		3 Months Ended		9 Months Ended
	Aug. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Apr. 30, 2018 GBP (£)	Jan. 31, 2017 EUR (€)	Aug. 31, 2015 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Mar. 31, 2020 USD ($)	Sep. 30, 2019	Aug. 23, 2019 USD ($)	Jun. 30, 2019	May 31, 2018 USD ($)	Nov. 30, 2015 EUR (€)
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 | 1.50% Loans Payable
Debt Instrument [Line Items]
Interest on debt						6,000	$ 17,000	30,000	$ 64,000
Stated interest rate (as a percent)															1.50%
Portion of loan paid | €				€ 2.9
Loans Payable | Non Interest Bearing Unsecured Convertible Loan
Debt Instrument [Line Items]
Interest on debt						68,000	$ 99,000	218,000	228,000
Loans payable, face amount	$ 4,500,000		£ 10,500,000			17,000,000.0		17,000,000.0
Debt instrument, exchange period	3 years		3 years
Loans Payable | 2.88% Loans Payable
Debt Instrument [Line Items]
Interest on debt						26,000		79,000	$ 79,000
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						28,000		83,000
Stated interest rate (as a percent)		2.75%					2.75%		2.75%
Loans payable, face amount		$ 4,000,000.0					$ 4,000,000.0		$ 4,000,000.0
Debt instrument, exchange period		4 years
Loans Payable | Former Shareholders
Debt Instrument [Line Items]
Interest on debt						$ 5,000	$ 15,000	$ 18,000	$ 52,000
Stated interest rate (as a percent)		3.10%				1.46%	3.10%	1.46%	3.10%
Italy | Leonardo & CO. NV
Debt Instrument [Line Items]
Investment interest in Italy (as a percent)						51.00%		51.00%			51.00%		51.00%		49.00%
Loans payable, face amount | €															€ 14.0
Other Liabilities | January 2017 Acquisition
Debt Instrument [Line Items]
Non-contingent consideration						$ 0		$ 0		$ 999,000

XML

LOANS PAYABLE - Schedule of Loan Repayments (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Debt Disclosure [Abstract]
Remaining 2021	$ 975
2022	12,214
2023	15,580
2024	6,588
2025	0
2026 and thereafter	13,242
Total	$ 48,599

XML

ACCUMULATED OTHER COMPREHENSIVE (LOSS) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Accumulated Other Comprehensive Loss
Balance, April 1, 2020			$ (43,108)
Foreign currency translation adjustment	$ 14,037	$ 14,388	22,407	$ 977
Balance, December 31, 2020	(20,701)		$ (20,701)
Accumulated Foreign Currency Adjustment Attributable to Parent
Accumulated Other Comprehensive Loss
Foreign currency translation adjustment	$ 22,407

XML

INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 40,088	$ 20,161	$ 56,020	$ 39,954
Effective tax rate	25.30%	29.20%	20.80%	24.30%

XML

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Numerator:
Net income attributable to holders of shares of common stock—basic		$ 48,894	$ 213,405	$ 124,779
Net income attributable to holders of shares of common stock—diluted	$ 118,515	$ 48,894	$ 213,405	$ 124,779
Denominator:
Weighted average shares of common stock outstanding—basic (in shares)	66,547,587	62,014,564	65,680,516	62,199,716
Weighted average number of incremental shares issuable from unvested restricted stock and restricted stock units, as calculated using the treasury stock method (in shares)	2,808,760	3,593,462	2,915,987	3,570,340
Weighted average shares of common stock outstanding—diluted (in shares)	69,356,347	65,608,026	68,596,503	65,770,056
Net income per share attributable to holders of shares of common stock
Basic (in dollars per share)	$ 1.78	$ 0.79	$ 3.25	$ 2.01
Diluted (in dollars per share)	$ 1.71	$ 0.75	$ 3.11	$ 1.90

XML

EMPLOYEE BENEFIT PLANS - Defined Contribution Plans (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Share-based Payment Arrangement [Abstract]
Defined contribution plan, amount of contributions	$ 2,327	$ 1,815	$ 4,368	$ 3,524

XML

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, 2020 USD ($) director $ / shares	Jun. 30, 2020 director $ / shares	Dec. 31, 2019 USD ($) director $ / shares	Jun. 30, 2019 director $ / shares	Dec. 31, 2018 director $ / shares	Jun. 30, 2018 director $ / shares	Jun. 30, 2017 director $ / shares	Jun. 30, 2016 director $ / shares	Dec. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2019 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Excess tax benefits recorded | $			$ 0		$ 0						$ 13,408,000	$ 7,605,000
Payments to settle employee tax obligations on share-based awards | $											17,810,000	31,469,000
Compensation expenses | $			12,642,000		16,682,000						46,779,000	47,791,000
Unrecognized compensation cost | $			$ 143,660,000		$ 139,061,000						$ 143,660,000	$ 139,061,000
Unrecognized compensation cost, period for recognition											1 year 4 months 24 days	1 year 2 months 12 days
2006 Incentive Plan | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)											1,044,741	1,368,079
Aggregate shares granted, price per share (in dollars per share) | $ / shares											$ 60.60	$ 47.02
2016 Incentive Plan | Restricted Stock
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)		48,716
Aggregate shares granted, number of recipients | director		2	2	4	1	4	1	3	3
Aggregate shares granted, price per share (in dollars per share) | $ / shares		$ 21	$ 63.01	$ 60.60	$ 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 common stock | 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%

XML

EMPLOYEE BENEFIT PLANS - Activity in Equity Classified Share Awards (Details) - 2006 Incentive Plan - Restricted Stock - $ / shares	9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Shares
Beginning balance (in shares)	3,539,047	3,763,984
Granted (in shares)	1,044,741	1,368,079
Vested (in shares)	(1,770,294)	(1,496,315)
Forfeited/Repurchased (in shares)		(81,008)
Ending balance (in shares)	2,752,590	3,554,740
Weighted Average Grant Date Fair Value
Beginning balance (in dollars per share)	$ 39.13	$ 32.29
Granted (in dollars per share)	60.60	47.02
Vested (in dollars per share)	$ 32.36	29.30
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Repurchased in Period	60,904
Forfeited/Repurchased (in dollars per share)	$ 50.69	38.56
Ending balance (in dollars per share)	$ 51.37	$ 39.13

XML

EMPLOYEE BENEFIT PLANS - Activity in Liability Classified Shares (Details) - USD ($) $ in Thousands	9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Awards Settleable in Shares
Beginning balance	$ 20,989	$ 21,676
Offer to grant	5,655	6,410
Share price determined-converted to cash payments	(249)	(52)
Share price determined-transferred to equity grants	(7,223)	6,457
Forfeited	(1,756)	(274)
Ending balance	$ 17,416	$ 21,303

XML

STOCKHOLDERS' EQUITY (Details)						3 Months Ended		9 Months Ended
	Aug. 14, 2020 shares	May 20, 2020 USD ($) shares	Aug. 01, 2019 $ / shares shares	May 30, 2019 $ / shares shares	Aug. 19, 2015 class_of_stock	Dec. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2019 USD ($) $ / shares shares	Dec. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2019 USD ($) $ / shares shares	Jan. 31, 2021 USD ($)	Sep. 30, 2020 shares	Jul. 31, 2020 USD ($)	Mar. 31, 2020 shares	Sep. 30, 2019 shares	Mar. 31, 2019 shares	Jul. 31, 2018 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
Dividends outstanding | $						$ 5,846,000	$ 7,719,000	$ 5,846,000	$ 7,719,000
Authorized amount to be repurchased | $												$ 125,000,000				$ 100,000,000
Weighted average price per share (in dollars per share) | $ / shares						$ 61.01	$ 43.98	$ 65.69	$ 44.12
Subsequent Event
Class of Stock [Line Items]
Authorized amount to be repurchased | $										$ 200,000,000
Class A common stock
Class of Stock [Line Items]
Common stock voting rights, number of votes per share | vote																	1
Shares issued to non-employee directors (in shares)		3,000,000
Proceeds from sale of stock | $		$ 188,700,000
Conversion of Class B to Class A shares (in shares)									5,992,399
Shares issued of common stock (in shares)						51,623,683		51,623,683					46,178,633
Number of common shares outstanding (in shares)						51,623,683		51,623,683					46,178,633
Outstanding common stock repurchased and retired (in shares)						684,995	632,353	283,035,000	97,956,000
Shares repurchased and retired, value | $						$ 41,793,000	$ 27,809,000	$ 18,593,000	$ 4,322,000
Class A common stock | Common stock
Class of Stock [Line Items]
Shares issued to non-employee directors (in shares)						3,174	2,118	8,751	9,145
Conversion of Class B to Class A shares (in shares)						790,025,000	2,100,523,000	3,121,294
Number of common shares outstanding (in shares)						51,623,683	43,569,993	51,623,683	43,569,993		51,506,192		46,178,633	41,817,614	38,200,802
Class B common stock
Class of Stock [Line Items]
Common stock voting rights, number of votes per share | vote																	10
Shares issued in acquisition (in shares)	192,247
Shares issued of common stock (in shares)						17,472,592		17,472,592					19,345,277
Number of common shares outstanding (in shares)						17,472,592		17,472,592					19,345,277
Outstanding common stock repurchased and retired (in shares)						286,730	610,943	295,000	1,350,000
Shares repurchased and retired, value | $						$ 17,810,000	$ 29,349,000	$ 19,000	$ 65,000
Class B common stock | Common stock
Class of Stock [Line Items]
Number of common shares outstanding (in shares)						17,472,592	21,998,937	17,472,592	21,998,937		18,255,244		19,345,277	24,079,076	27,197,734
ORIX USA Corporation | Class A common stock
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
Investor | Class A common stock
Class of Stock [Line Items]
Shares issued of common stock (in shares)						51,578,208	43,533,269	51,578,208	43,533,269
Director | Class A common stock
Class of Stock [Line Items]
Shares issued to non-employee directors (in shares)						3,174,000	2,118,000	8,751	9,145
HL Holders | Class B common stock
Class of Stock [Line Items]
Number of common shares outstanding (in shares)						17,472,592	21,998,937,000	17,472,592	21,998,937,000
Director | Class A common stock
Class of Stock [Line Items]
Shares issued of common stock (in shares)						45,475	36,724	45,475	36,724
Restricted Stock | Class B common stock
Class of Stock [Line Items]
Shares issued in acquisition (in shares)	104,862
Restricted Stock | 2006 Incentive Plan
Class of Stock [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Repurchased in Period								60,904

XML

LEASES - Narrative (Details) € in Millions	9 Months Ended
	Dec. 31, 2020 EUR (€) lease
Lessee, Lease, Description [Line Items]
Number of operating leases | lease	1
Lease not yet commenced, amount | €	€ 1.5
Minimum
Lessee, Lease, Description [Line Items]
Operating lease, term of contract	1 year
Maximum
Lessee, Lease, Description [Line Items]
Operating lease, term of contract	16 years
Operating lease, lease not yet commenced, term of contract	6 years

XML

LEASES - Maturity of Existing Operating Leases (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Mar. 31, 2020
Leases [Abstract]
Remaining 2021	$ 7,657
2022	28,888
2023	24,098
2024	18,833
2025	19,918
Thereafter	101,286
Total	200,680
Less: present value discount	(32,113)
Operating lease liabilities	$ 168,567	$ 154,218

XML

LEASES - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Leases [Abstract]
Operating lease expense	$ 7,169	$ 6,466	$ 21,967	$ 21,729
Variable lease expense	2,913	2,999	8,040	12,675
Short-term lease expense	57	114	157	195
Less: Sublease income	(53)	(48)	(154)	(145)
Total lease costs	$ 10,086	$ 9,531	$ 30,010	$ 34,454

XML

LEASES - Weighted Average Details (Details)	Dec. 31, 2020	Dec. 31, 2019
Leases [Abstract]
Weighted-average remaining lease term (years)	9 years	9 years
Weighted-average discount rate	3.80%	4.10%

XML

LEASES - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Leases [Abstract]
Cash paid for amounts included in the measurement of Operating lease liabilities	$ 23,658	$ 17,970
Right-of-use assets obtained in exchange for Operating lease liabilities	30,246	0
Increase/(decrease) in Operating lease right-of-use assets due to remeasurement	$ (1,208)	$ (5,883)

XML

SEGMENT AND GEOGRAPHICAL INFORMATION - Revenue and Assets by Segment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Mar. 31, 2020
Segment Reporting Information [Line Items]
Revenues	$ 537,876	$ 333,515	$ 1,024,748	$ 856,674
Segment profit	189,187	94,049	346,212	238,951
Corporate expenses	379,460	265,499	756,867	695,728
Other (income)/expense, net	(187)	(1,039)	(1,544)	(3,787)
Income before provision for income taxes	158,603	69,055	269,425	164,733
Total assets	2,119,799		2,119,799		$ 1,677,003
Operating Segments
Segment Reporting Information [Line Items]
Total assets	799,970		799,970		717,005
Operating Segments | Corporate Finance
Segment Reporting Information [Line Items]
Revenues	306,171	201,137	502,191	490,707
Segment profit	96,431	58,495	143,167	138,611
Total assets	492,212		492,212		403,147
Operating Segments | Financial Restructuring
Segment Reporting Information [Line Items]
Revenues	177,995	92,808	392,006	249,438
Segment profit	78,855	28,391	169,832	75,956
Total assets	170,997		170,997		186,418
Operating Segments | Financial Advisory Services
Segment Reporting Information [Line Items]
Revenues	53,710	39,570	130,551	116,529
Segment profit	13,901	7,163	33,213	24,384
Total assets	136,761		136,761		127,440
Corporate, Non-Segment
Segment Reporting Information [Line Items]
Corporate expenses	30,771	26,033	78,331	78,005
Total assets	1,319,829		1,319,829		$ 959,998
Segment Reconciling Items
Segment Reporting Information [Line Items]
Other (income)/expense, net	$ (187)	$ (1,039)	$ (1,544)	$ (3,787)

XML

SEGMENT AND GEOGRAPHICAL INFORMATION - Revenue and Assets by Geographical Areas (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Mar. 31, 2020
Revenues from External Customers and Long-Lived Assets [Line Items]
Income before provision for income taxes	$ 158,603	$ 69,055	$ 269,425	$ 164,733
Revenues	537,876	333,515	1,024,748	856,674
Total assets	2,119,799		2,119,799		$ 1,677,003
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Income before provision for income taxes	123,774	58,349	210,580	132,846
Revenues	414,891	294,083	815,904	740,520
Total assets	1,635,642		1,635,642		1,135,871
International
Revenues from External Customers and Long-Lived Assets [Line Items]
Income before provision for income taxes	34,829	10,706	58,845	31,887
Revenues	122,985	$ 39,432	208,844	$ 116,154
Total assets	$ 484,157		$ 484,157		$ 541,132

XML

SUBSEQUENT EVENTS (Details) - Subsequent Event - USD ($) $ / shares in Units, $ in Millions	Jan. 20, 2021	Feb. 01, 2021
Subsequent Event [Line Items]
Quarterly cash dividend declared (in dollars per share)	$ 0.33
Investments in affiliates		$ 7