Company: HLI
Filing Date: 2025-05-15
Form Type: 10-K
Source: 0001302215-25-000024
Chunk: 30

Company: HOULIHAN LOKEY, INC.
Filing Date: 2025-05-15
Form: 10-K
Item: Item 1A
Chunk 30
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 cost over the fair market value of net assets acquired in business combinations. We review goodwill and intangible assets at least annually for impairment. We may need to perform impairment tests more frequently if events occur or circumstances indicate that the carrying amount of these assets may not be recoverable. These events or circumstances could include a significant change in the business climate, attrition of key personnel, a prolonged decline in our stock price and market capitalization, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of one of our businesses and other factors. Annual impairment reviews of indefinite-lived intangible assets or any future impairment of goodwill or other intangible assets would result in a non-cash charge against earnings, which would adversely affect our results of operations. The valuation of the reporting units requires judgment in estimating future cash flows, discount rates and other factors. In making these judgments, we evaluate the financial health of our reporting units, including such factors as market performance, changes in our client base and projected growth rates. Because these factors are ever changing, due to market and general business conditions, our goodwill and indefinite-lived intangible assets may be impaired in future periods.

Our international operations are subject to certain risks, which may affect our revenue.

In fiscal 2025, we earned approximately 28.8% of our revenue from our international operations. We intend to grow our non-United States business, including growth into new regions with which we have less familiarity and experience, and this growth is important to our overall success. Many of our larger clients are non-United States entities. Our international operations carry special financial and business risks, which could include the following:

•greater difficulties in managing and staffing foreign operations; 

•fluctuations in foreign currency exchange rates that could adversely affect our results; 

•unexpected and costly changes in trading policies, regulatory requirements, tariffs and other barriers; 

•cultural and language barriers and the need to adopt different business practices in different geographic areas;

•longer transaction cycles; 

•higher operating costs; 

•local labor conditions and regulations;

•adverse consequences or restrictions on the repatriation of earnings; 

•potentially adverse tax consequences, such as trapped foreign losses; 

•potentially less stable political and economic environments; 

•terrorism, political hostilities, war and other civil disturbances or other catastrophic events, such as the conflicts in Ukraine and Israel, that reduce business activity; and

•difficulty collecting fees.

As part of our day-to-day operations outside the United States, we are