Company: HLI
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001302215-25-000111
Chunk: 8

Company: HOULIHAN LOKEY, INC.
Filing Date: 2025-11-04
Form: 10-Q
Item: Part I, Item 1
Chunk 8
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 recast to conform with this presentation. These reclassifications did not affect net income, stockholders’ equity, or cash flows as previously reported.Additionally, certain other prior year amounts have been reclassified to conform to the current period's presentation. These reclassifications had no impact on net income, shareholders' equity or net cash flows as previously reported.Principles of ConsolidationThe 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.Use of EstimatesThe 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, valuation of acquired intangibles and 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.Translation of Foreign Currency TransactionsFrom 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 September 30, 2025, we had no open foreign currency forward contracts outstanding. As of September 30, 2024, we had two foreign currency forward contracts outstanding between the U.S. Dollar and the Pound Sterling with an aggregate notional value of $37,000. The change in fair value of these contracts represented a net gain included in other operating expenses of $0 and $2,410 during the three months ended September 30, 2025 and 2024, respectively.Fair Value MeasurementsThe 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