Houlihan Lokey reported third-quarter earnings of $1.94 per diluted share, a 18% increase from $1.64 in the year-ago quarter and ahead of the Zacks Consensus Estimate of $1.85. Net income rose to $125 million, up from $106 million a year earlier, driven by improved profitability in advisory fees and expense discipline. Operating margin expanded by 220 basis points to 28.4%.

Total revenues for the quarter climbed 14% year-over-year to $765 million, outpacing the street estimate by 3%. Advisory fees increased 17% to $502 million, led by strong merger and acquisition advisory engagements in the technology and healthcare sectors. Restructuring and recapitalization fees contributed $128 million, marking a 12% gain as distressed activity remained elevated in select industries. Financial restructuring revenues rose 9%, bolstered by several high-profile mandates in retail and energy.

The firm added 85 professionals globally during the quarter, bringing headcount to 2,280 and reinforcing its coverage in Europe and Asia-Pacific. Investments in technology, including a proprietary data analytics platform launched in November, have already generated six advisory mandates and are expected to double recurring subscription revenue by fiscal year-end. Infrastructure spending totaled $12 million in Q3, focusing on cybersecurity and remote-work capabilities.

Management reiterated its full-year guidance of $7.50 to $7.70 in earnings per share, implying 15% growth at the midpoint. Fee-earning transaction backlog stood at $1.9 billion as of January 28, up 8% from the prior quarter. The board approved a new $250 million share-repurchase program, complementing the quarterly dividend increase of 10% to $0.25 per share. The firm expects leverage to remain below 1.5x net debt to EBITDA through fiscal 2026.