Company: HLI
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001302215-25-000111
Chunk: 108

Company: HOULIHAN LOKEY, INC.
Filing Date: 2025-11-04
Form: 10-Q
Item: Part I, Item 2
Chunk 108
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30, 2025 and 2024, the net impact of the fluctuation of foreign currencies in other comprehensive income within the Consolidated Statements of Comprehensive Income was $(14.1) million and $31.4 million, respectively. For the six months ended September 30, 2025 and 2024, the net impact of the fluctuation of foreign currencies in other comprehensive income within the Consolidated Statements of Comprehensive Income was $34.3 million and $28.4 million, respectively. A hypothetical 10% depreciation in the U.S. Dollar relative to the functional currencies of our foreign subsidiaries as of September 30, 2025, would have resulted in an increase in our other comprehensive income, net of tax, of approximately $103 million for the six months ended September 30, 2025.

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 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 $37.0 million. The change in fair value of these contracts represented a net gain included in other operating expenses of $0 and $2.4 million during the three months ended September 30, 2025 and 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