Company: HLI
Filing Date: 2025-05-15
Form Type: 10-K
Source: 0001302215-25-000024
Chunk: 81

Company: HOULIHAN LOKEY, INC.
Filing Date: 2025-05-15
Form: 10-K
Item: Item 7A
Chunk 81
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 Income was $3.3 million, $(3.8) million, and $(19.5) million, 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. As of March 31, 2025, we had one foreign currency forward contract between the U.S. Dollar and Pound Sterling, with an aggregate notional value of $75.0 million and one foreign currency forward contract between the Swedish Krona and the Pound Sterling, with an aggregate notional value of SEK 79.0 million. As of March 31, 2024, we had one foreign currency forward contract between the U.S. Dollar and Pound Sterling, with an aggregate notional value of $38.3 million. The fair value of these foreign currency forward contracts represented a gain included in Other operating expenses of $237,000 and $55,000 during the year ended March 31, 2025 and March 31, 2024, respectively.

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.

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