Company: HLI
Filing Date: 2025-02-04
Form Type: 10-Q
Source: 0001302215-25-000007
Chunk: 128

Company: HOULIHAN LOKEY, INC.
Filing Date: 2025-02-04
Form: 10-Q
Item: Part I, Item 2
Chunk 128
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31, 2023

Operating activities resulted in a net inflow of $103.1 million, primarily attributable to net income plus equity and liability classified share awards issued, offset by cash bonus payments paid in May 2023. Investing activities resulted in a net outflow of $(55.7) million, primarily attributable to purchases of property and equipment, net. Financing activities resulted in a net outflow of $(214.4) million, primarily attributable to dividends paid and payments made to settle employee tax obligations on share-based awards.

Contractual Obligations

There have been no material changes outside of the ordinary course of business to our known contractual obligations, which are included in Item 7 of our 2024 Annual Report.

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.

Business Combinations

Accounting for business combinations requires management to make significant estimates and assumptions. Critical estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows, expected asset lives, geographic risk premiums, discount rates, and more. The amounts and useful lives assigned to acquisition-related intangible assets impact the amount and timing of future amortization expense.

Recent Accounting Developments

For information on 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.

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Item 3.    Quantitative and Qualitative Disclosures about Market Risk

Market Risk and Credit Risk

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

Our cash and cash equivalents are denominated primarily in U.S. dollars, pound sterling and euros, and we