Good day, ladies and gentlemen. Thank you for standing by. Welcome to Houlihan Lokey's Q3 fiscal year 2023 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Please note that this conference call is being recorded today, January 31, 2023. I will now turn the call over to Christopher Crain, Houlihan Lokey's General Counsel. Thank you, operator, and hello, everyone. By now, everyone should have access to our Q3 fiscal year 2023 earnings release, which can be found on the Houlihan Lokey website at www.hl.com in the Investor Relations section. Before we begin our formal remarks, we need to remind everyone that the discussion today will include forward-looking statements. These forward-looking statements, which are usually identified by use of words such as will, expect, anticipate, should, or other similar phrases, are not guarantees of future performance. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect, and therefore, you should exercise caution when interpreting and relying on them. We refer all of you to our recent SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial conditions. We encourage investors to review our regulatory filings, including the Form 10-Q for the quarter ended December 31, 2022, when it is filed with the SEC. During today's call, we will discuss non-GAAP financial measures, which we believe can be useful in evaluating the company's financial performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measures is available in our earnings release and our investor presentation on the hl.com website. Hosting the call today, we have Scott Beiser, Houlihan Lokey's Chief Executive Officer, and J. Lindsey Alley, Chief Financial Officer of the company. They will provide some opening remarks, then we will open the call to questions. With that, I'll turn the call over to Scott. Thank you, Christopher. Welcome, everyone, to our Q3 fiscal year 2023 earnings call. We ended the quarter with revenues of $456 million and adjusted earnings per share of $1.14. Revenues were down 49% versus the same quarter last year and down 7% from the previous quarter. When comparing to last year's Q3, bear in mind that our December 2021 quarter was extraordinary. In fact, the prior year quarter was substantially higher than any previous quarter in our firm's history, both in revenues and adjusted EPS. Furthermore, numerous external market factors have altered the typical seasonality of the M&A market globally. This year, our results are consistent with industry trends and that our December 2022 quarter was less than our September 2022 quarter. This is the first time our December quarter results were lower than our September quarter results since December 2008. While this quarter's financial results are disappointing, we are encouraged by the fact that our 9-month year-to-date results are the second best in the firm's history. Corporate Finance quarterly revenues were $292 million. We saw an increase in transaction closings this quarter versus last quarter, offset by a reduction in average transaction fees. New business activity remains robust as the number of new engagements was a quarterly high for this fiscal year. Partially offsetting these positive factors is that the financing market remains challenged. Mid-cap transactions can still get financing, but lenders are more selective. The cost of debt is up significantly, and some lenders have opted to sit on the sidelines until they perceive better visibility on the economy. This has resulted in pent-up demand in M&A, which we believe will ultimately be a positive for our business once there is more broad-based confidence in the economy. Financial and Valuation Advisory recorded $66 million in revenues. The decline in revenues versus the same quarter last year was primarily driven by lower revenues in transaction opinion and transaction advisory services. Both service lines were affected by reduced M&A activity, especially in the public marketplace. However, our portfolio valuation service line continues to do well and, in certain circumstances, benefits from a more volatile market. Financial restructuring produced $99 million of revenues, another very strong quarter. For each quarter of this fiscal year, financial restructuring experienced an increased number of closed transaction and an increased number of new engagements versus the prior quarter. Restructuring continues to see strong new business activity, adding to our confidence in this business segment in the second half of the calendar year and throughout calendar 2024. New business and financial restructuring is broad-based across all major geographies and most industry sectors. Our long-term focus on growing our business, both internally and externally, continues. We hired five managing directors this quarter. We announced the acquisition of Oakley Advisory, a digital infrastructure investment banking firm in the UK, and we continue to have a robust pipeline of quality acquisition targets. Finally, I wanted to end today's comments with a recognition to all three of our business segments and the bankers that continue to deliver exceptional results to our clients and our shareholders. In calendar 2022, we continued our string of league table successes. Houlihan Lokey was ranked as the number one investment banking firm for all global M&A transactions under $1 billion and all transactions regardless of size in the US based on transaction volume. We are again ranked the number one investment banking firm for all financial restructuring transactions, both in terms of value and volume. In addition, we were ranked as the most active fairness opinion firm by volume when measured for the period over the last 25 years. Overall, we are proud of our accomplishments in calendar 2022, and we fundamentally believe that our business model positions us effectively for long-term growth and strong shareholder returns. With that, I'll turn the call over to Lindsey. Thank you, Scott. Revenues in corporate finance were $292 million for the quarter, down 7% when compared to last quarter and 59% when compared to the same quarter last year. We closed 125 transactions this quarter compared to 114 last quarter. Our average transaction fee on closed deals was lower. Financial restructuring revenues were $999 million for the quarter, an 11% increase from the same period last year. We closed 28 transactions in the quarter compared to 21 in the same period last year. Our average transaction fee on closed deals was lower. In Financial and Valuation Advisory, revenues were $66 million for the quarter, a 21% decrease from the same period last year. We had 876 fee events during the quarter compared to 901 in the same period last year. FVA's quarter was heavily influenced by the slowdown in M&A activity for the quarter. Both the transaction opinion and transaction advisory service lines were down versus the same quarter last year. Turning to expenses. Our adjusted compensation expenses were $281 million for the Q3 versus $547 million for the same period last year. Our only adjustment was $8.6 million for deferred retention payments related to certain acquisitions. Our adjusted compensation expense ratio for the Q3 was 61.5%, the same as last year. Our adjusted non-compensation expenses were $73 million for the quarter, an increase of $14 million over the same quarter last year, but flat versus last quarter. This resulted in a non-compensation ratio of 15.9% for the quarter. We believe that our non-compensation expenses have settled into a post-COVID norm relating to TM&E and other operating expenses. We still see pressure on rent with additional space supporting our growth and general inflation, and we expect to continue to invest in technology as a point of differentiation as the firm grows. We continue to believe that our long-term target for our non-compensation ratio will be lower than what it was pre-COVID, given the increased size of our business. However, we are seeing some pressure on that ratio this year given the current business climate. For the quarter, we adjusted out of non-compensation expenses $10.4 million in non-cash acquisition-related amortization, the vast majority of which was amortization related to the GCA transaction. Our adjusted other income and expense decreased for the quarter to income of approximately $2.2 million versus an expense of approximately $300,000 in the same period last year. We adjusted out of our other income and expense $2.7 million related to the wind down of the SPAC that we co-sponsored. Given the wind down, there is no remaining asset related to the SPAC on our balance sheet. Our adjusted effective tax rate for the quarter was approximately 25% compared to 30% when compared to the same quarter last year. Although we received some benefits this quarter which slightly reduced our effective tax rate, we continue to target a long-term range for our effective tax rate of between 27% and 28%. Turning to the balance sheet. As of the quarter end, we had approximately $586 million of unrestricted cash and equivalents and investment securities. As is typical during our Q3, the cash position was affected by a November payment of cash deferrals relating to bonuses accrued in fiscal year 2022. In this past quarter, we repurchased approximately 100,000 shares at an average price of $91.65 per share as part of our share repurchase program. We continue to be disciplined regarding share repurchases as we look to maintain balance sheet flexibility. The board approved a quarterly dividend to be paid in March and also approved a change to our board committee structure where, effective immediately, our compensation committee and our nominating and governance committee will be comprised solely of independent directors, consistent with our audit committee. With that, operator, we can open the line for questions. Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, that is star one to ask a question. We will go first to Brennan Hawken with UBS. Good afternoon, Scott and Lindsay. How are you? Hey, Brennan. Thanks for taking the question. Would love to start on corporate finance. You spoke to financing becoming more challenging from banks. Clearly that was impacting the December quarter. Have you noticed any change here early in 2023? How is that continued availability trending here so far? Has there been any change? You know, how should we be thinking about the outlook for mid-market M&A? On the financing front, I'd say we've seen a slight improvement during the month of January versus the previous quarter in financings. I think there were some lenders who just did not want to deploy any capital on their books when they closed them out on December 31st. They were, I'd say, slightly more open-minded in terms of finding opportunities to lend. It's still, you know, a marketplace that's rather challenged out there. Okay. Should we therefore keep our expectations toned down so long as the financing markets remain challenged as far as corporate finance goes in M&A? I'd say there's a dichotomy going on, which for the last several months, last few quarters, I'd say the amount of new business, the size of our prospects pipeline backlog, however you might count it, actually continues to grow. That's the very positive sign. Really have not seen the definitive turn in the marketplace yet, whether it's willingness by buyers and sellers or lenders, and borrowers to come together. Core of the transactions are occurring, they're just not occurring at the pace that, you know, we would think is typical for the size, you know, business that we've already got signed up. I think we're all still waiting for eventually that improved, you know, pipeline to ultimately turn into revenues, but just haven't seen the definitive turn in the marketplace at least as of yet. Okay. All right. Thanks for that. That's appreciated. I'd love to use that as a, as a segue to my follow-up question, which would be, you know, if we do see continued challenging climate and environment, particularly for M&A and corporate finance, you know, is there a point where your normally very predictable, very reliable, and very boring 61.5% comp ratio begins to see some upward pressure, maybe becomes a little bit less boring, you know? How should we be thinking about that? Is there any point in which maybe it starts to become a bit more of a concern for you, at least in the short term? Yeah. I think all we can point to is, you know, since we've gone public, we've had a very tight range. I believe almost as tight as anybody in terms of what our payout ratio is. It's typically not very much year-to-year or within a year. As we see the marketplace, as we see the results of our business, I think we are still comfortable with the 61.5%. I don't think you can ever say that it'll never change, but there's nothing sitting here in our minds right now that suggests it's going to change in the foreseeable future. I'd say, Brennan, even pre-public in the two recessions that occurred, early 2000s and kind of 2008, you know, there's precedence of us managing to a fairly tight range as well. I think we certainly have history to help us answer that question. I agree with Scott, you know, nobody knows what the next six months is gonna look like. Great. Thanks for the color. Appreciate it. Thanks, Brennan. We'll move to our next question from Manan Gosalia with Morgan Stanley. Hey, good afternoon. You noted that, the average transaction fees were lower this quarter. Is there anything specific driving that? Is it just lower size of deals? Is it more competition? Can you talk about how we should think about that going forward? I think it's hard to think about it going forward. It is really going to be a little random quarter by quarter. We kinda think about average transaction fee on an annual basis. You know, I'd say if you look back over the last 15 years, we have pretty consistently increased our average transaction fees over that time period. It just sometimes in the quarter you'll have swings based on size. I'd say there was no story here at all, and you'll unfortunately continue to see swings quarter by quarter. The long-term trend is obvious if you look at the numbers. Great. You also spoke about the pent-up demand in M&A. Is it really just the financing market that's holding things back? You know, can you talk about what you're hearing from clients, as we get closer to the Fed, maybe, stopping their rate hikes? You know, how where are buy and sell expectations on the, on the bid ask right now? Yeah. I think it's a combination. Interest rates and financing availability is one thing. Where people think the economy is going, where a company's, you know, near-term earnings expectations are, different people's views on valuations, all of that is impacting the decisions and the speed at which people are able and willing to close transactions. Got it. Thank you. We'll move on to our next Matt, your line is open. I'm sorry. Please go ahead, Matt. Hi. I think you cut out there for a second, but I believe I was called here. Good afternoon, guys. Just have one on the restructuring cycle. How's it going? Just last quarter, you expressed some optimism overall that this restructuring cycle could be elevated for what feels like a prolonged period of time. Just wanted to take your pulse on that, just kind of given where that, you know, the sentiment stands today, just given that there's been maybe some shifting of the expectations for maybe a soft landing more recently. I guess even from, like, a headline standpoint, I think a lot of the larger activity we've seen, at least from news flows related to the crypto space. Curious, you know, in terms of what impacts you guys, what you're seeing, as challenge areas in industry verticals and regions that more directly impact Houlihan? Overall, I'd say we're more optimistic on what we see going forward with restructuring than we were a quarter or 2 quarters ago. It just continues to build. I'd say if you think of it as kind of a water spigot, it just keeps opening up a little bit more and more. It's not fully open, and we don't expect to see a full flush out like we saw maybe in, you know, spring of 2020 or the Great Recession of 2008. It is a kind of a full-fledged increased restructuring environment globally. Not only the United States, Western Europe and Asia, but really almost all other parts of the world. It's impacting a whole litany of industries. I don't think there is a particular leading industry. You know, crypto, which has obviously gotten some news, but it's just one of many, many pieces out there. We continue to see a build of our business, and whether it's on the debtor side or creditor side, US or outside of the US, among a variety of different industries. The expectations and just where the marketplace is, kind of where interest rates are, where financing is, kind of the never-ending, you know, movements in the maturity wall, all that leads us to believe that it'll be a good and probably better environment for financial restructuring for at least the foreseeable future. Just going back to Brennan's question, which was kind of the million-dollar question, how should we think about M&A over the next, you know, 12 months? That's probably not just for Houlihan, but for anyone in the industry, is we are in an unusual circumstance where we're seeing increased activity in corporate finance relative to the last quarter and increased activity in restructuring relative to the last quarter, which is unusual. It just normally does not happen that way. There is, you know, call it half the population out there that believes in the soft landing and half the population out there that thinks it's gonna get ugly. Very hard to go back and answer Brennan's question until we really see some inflection point that shows a direction. Yep, makes sense. Kind of just switching gears, just thinking about kind of your capital priorities from here. I know this quarter you guys announced that you'd be keeping the dividend flat for this coming quarter, and the Q1 of relatively light buyback. You know, just coupling this with the comments you made last quarter, kind of citing a pickup in conversations with acquisition targets as well as the announced Oakley Advisory acquisition, I guess, how should we think about the M&A outlook from here? I'm assuming there's still more by way of conversations, but just kinda curious on any updates there on capital priorities overall as well as M&A specifically. I'll let Scott handle the M&A question, and I'll just start with the capital priorities. I think with respect to the dividend, if you just go back in time, our normal cadence is our Q4, and which is next quarter. It would be unusual for us to increase the dividend this quarter, or have any effect on the dividend this quarter. With respect to share repurchases, I think we have called out for the last couple quarters that we're going to be conservative with respect to share repurchases. As you saw during COVID, and as you heard from Scott in his comments, we do tend to see a bit more M&A activity during periods like this. Making sure that we have balance sheet flexibility, I think is prudent going through a dislocation in the markets. Not dislocation, it's probably too strong a word, but stubbornness in the markets like what we're going through now. I think with respect to M&A activity, I think I've kind of answered that question. You know, that is an important component of capital allocation for us. We feel like it is the most accretive to shareholders, and that's going to continue to be a priority for us, is put money to work through our acquisition strategy. I think with respect to what we're seeing out there, Scott can highlight some of what he talked about. I think, we're experiencing still a relatively active marketplace for us as a principal to acquire, interesting and hopefully additive, businesses to our organization. We never know whether everything we're talking to will close or none of them will close, and they all take a different timeline. As Lindsay had said, you know, we try to factor in the magnitude of what we're looking at, maybe some probability assessment of, what we're looking at in closing, kind of what other of our cash needs are. I think that's probably it's a combination of a variety of factors that have tempered a bit our repurchases, over the last quarter or two. Great. Thanks, guys. Thank you. We will go next to Devin Ryan with JMP Securities. Great, thanks. This is Brian McKenna for Devin. The syndicated credit markets are still largely shut, but the private credit markets are functioning and are filling this void in a pretty meaningful way. How has this impacted your capital markets business, and what kind of opportunities does this create near-term and over the longer term for this business? Short term, the reduction in total number of players that are able or willing to provide financing and the total number of deals that you've got willing buyers and sellers, is down. That puts some negative pressure on our capital markets business. On the long term, we think, in fact, what's occurring is gonna be good for us and the rest of our industry, participants. Effectively, when it's harder to find capital, you know, and we've always said our typical you know, competitor here is not another investment banking firm, it's the CFO who believes that he or she can do it themselves, or it's a private equity firm who believes they can do it themselves. As things have gotten a little more difficult over the last year, we are seeing more people turning to institutions like ourselves to go raise that financing for them. Like I said, short term still probably is a little rocky compared to a year ago, but long term, we think actually what's happening, much like what happened in the 2008, 2009 time period, will result in a more positive trend for, you know, agenting of financing in the private marketplace, which is what we specialize in. Helpful. Thanks. Then just bigger picture, thinking about the next legs of growth, you clearly have deep relationships with sponsors, and continue to expand related capabilities. What else can you do with sponsors longer term that could drive some incremental growth across the business? First of all, I think we have been very dominant and successful in our financial sponsor arrangements out in the US, and we are growing rapidly in Europe, and then we'll continue that pace in the Middle East and Latin America and Asia, et cetera. There's some geographical expectations that we have. We continue to find incremental types of services that we can provide to many of these financial sponsors. Part of it is learning what they need and what they want, as long as it fits the kinds of services that we have or could continue to expand, that's part of the growth strategy. Thanks, Scott. We will move next to James Yarrow with Goldman Sachs. Hey, Scott and Lindsey. Thanks for taking my questions. I just wanted to start with the sponsors versus strategic point here. Maybe you could just talk about the differences in, you know, among your clients across strategic and sponsors, where they're seeing, you know, roadblocks to engaging in closing transactions and what this might mean for the mix of sponsor versus strategic deal-making over, let's say, the next two years or so. I don't think we see or expect major changes in what we've experienced over the last couple of years in any given, you know, small quarter trend. At times you see sponsors more active in our book of business than financials and vice versa. The financial sponsors are still incredibly important. There continues to be more of them. They are still raising money. They are still deploying it. They're probably just taking more time in deciding what they wanna do or when they get started or when they're waiting for a particular key point of, you know, when they want to approach the marketplace, whether it's on the sell side or buy side. We still think it's an important part of our business and for the industry at large. Okay, that makes sense. Then, just on the restructuring business, is there any ability to sort of contextualize where you're seeing, you know, most of these new mandates you talked about being announced? Is it on the debtor side, creditor side? Then, you know, are they more liability management or traditional restructuring assignments? It's really in everything that you've mentioned. In different parts of the globe, we tend to be maybe slightly more active, debtor-oriented than creditor. A quarter ago, you know, probably had a little more debtor type of work. Recently, it's been maybe a little more creditor-oriented, depending upon the particular company situation. Sometimes it starts in the liability management side. Sometimes it's right into a, you know, a transaction that might immediately lead into a bankruptcy filing. I wouldn't say that there's a particular unique trend out there. It's really, I think just a lot of it's catch up. Companies that probably just don't have the right business plan. You still have some technology disruptors. You obviously have higher interest rates, and the ability to refinance, many of the situations that you could have done 12 or 18 months ago is not the same today. Therefore, that's why I'd say to some regards, it's just a pent-up demand for restructuring that maybe in the ordinary course should have occurred over the last one or two years had the central governments not, you know, been as helpful in providing liquidity in the system. Okay. Thanks a lot. We'll move to our next question from Steven Chubak with Wolfe Research. Hey, good evening. Scott and Lindsey, I wanted to try and suss out some guidance on how we should be thinking about the FVA business. You know, this was a business that was growing at a relatively consistent, let's call it like mid-single, high single digit type clip up until COVID. You saw this meaningful step function higher, where you've been running somewhere in, like, the $75 million ± type per quarter zone. This is the Q1 where we've actually seen, like, a decent step down, even more acute than what we saw in Corp Fin, which was admittedly a bit surprising. You've been gaining share in that business fairly steadily. You talked about some of those gains on the last quarter's call. Was hoping to get some perspective on how we should think about the jumping-off point for this year, recognizing the M&A environment remains challenged, but your franchise continues to gain pretty strong momentum. What's a reasonable expectation for revenues for that business? It is, you know, historically the most steady of our businesses. You're correct. Statistically, it took a bigger drop than, you know, some of our other business segments over time. Occasionally, this group does end up with some, you know, for its business, some sizable projects. Just didn't have many of those in this particular quarter, so you'll occasionally get a little bit of a lumpiness. I think the, you know, diversification that we have in the service lines is still the right mix that we have. It is being impacted negatively to some extent like corporate finance, and at least in the public M&A space, which has come down from, you know, where it was a year ago. We think the, you know, the ultimate trend lines in terms of growth potential is still there. We've got more senior bankers in there as we ever have. We have the biggest staff that we've ever had there. We're more global in our reach than we've done in the past. We continue to introduce kind of some sector expertise into what historically was probably much more just service line-oriented. Kind of would just chalk it up, things didn't fall into place in that December quarter. You know, would expect to, you know, continue to see some growth from that standpoint. What is a normalized level? You know, probably be a little better now after another quarter to recognizing, like you said, that we did have a decline this quarter. you know, I think we'll all know a little bit more in the next quarter or two on how those quarters shape up to be able to give you a little more guidance on what should be the normalized level and growing out from there. That's great color, Scott. Just one follow-up on the comments regarding the myriad factors impacting deal activity. What I wanted to suss out is whether you still expect to see the inflection M&A activity sooner relative to peers. I know historically, your franchise tends to feel the pain first when the environment slows, but also typically recovers more quickly as activity picks up. Yeah, I think we still believe that that's the nature of the mid-market business. It is going to dry down a bit and spool up quicker than others. You know, I think what we'd all like to see is a consistent trend instead of things like almost every two months, the market tone goes from, "Oh, yeah, we're definitely gonna have a soft lining," to, "Oh, yeah, a definite, you know, recession is occurring." "Oh, yeah, interest rates are gonna stay up higher and longer than we thought," to maybe, "No, they're not." All of that. You know, look, we've had a better month in the stock market and bond market during January. February could be a reversal of that, or it could be a continuation trend. I think we've commented in the past that as time goes on and we're not in, either a decreasing stock market or at least not a significant decreasing, buyers and sellers are getting closer and closer to hitting that point of equilibrium. I think that is improving, with time. There's probably some impatience level, by the, private equity firms to eventually start deploying capital. The question we answered earlier, you know, I'd say the financing marketplace, at least in the midcap space, slightly better in January, but not enough to say, "Yeah, you know, we're back into, an environment where, you know, we can finance, meaningfully more deals than has been, occurring in the last couple quarters." That just hasn't happened yet. That's great color, Scott. Thank you. If I could squeeze in one more quickly. Just given you've had 12 months of GCA results under your belt, I was hoping you could speak to how the business performed this year and whether you're seeing any evidence of those revenue synergies coming through, whether there's any tangible examples that you could cite in that regard. As you said, we've been with GCA for a year. We don't break out the GCA business, and as you know, a good chunk of GCA was non-technology. We have merged essentially all of the GCA operations into the individual industry groups. Hard to tell from our, you know, publicly disclosed numbers how GCA is doing. We are thrilled with the acquisition and how it's come together. I would say, especially in Europe, we have seen the revenue synergies that we see on every transaction, where we see a, you know, meaningful increase in average transaction size and average fee. As you know, Europe was more than 50% of their business. We've lost very few individuals since we did the transaction, so the workforce is still in place. Yeah, I think, I think we're excited about the acquisition a year out. As you know, technology has been one of the more affected industry groups. GCA has seen that in their results. Again, the important thing to us is that we have the workforce in place that we acquired a year ago. We're seeing those revenue synergies that you alluded to, especially in Europe. The collaboration among the deal teams across really all three product lines has been as good as we've seen on any acquisition. Yeah, I would just further say that the interaction between the bankers, the interface, with the clients has been probably better than we would have ever mapped or thought out. The negative is taking a little longer and a little bit more money to do some of the back office consolidations and synergies. Just, you know, different IT type of systems, different payroll systems, different geographies, all of those things just certainly take a little bit longer. We'll get to it, and, you know, we feel we've made a lot of headway. It's taken us a little longer on the back office stuff than on the front, interrelationship on the client-facing side. We think it's been actually, very excellent. Great color. Thank you both for taking my questions. Thanks, Steven. We'll go next to Ken Worthington with J.P. Morgan. Hi. Good afternoon. I think most of my questions have been asked and answered. Maybe just to follow up on FX and the impact that the euro, the pound, and the yen movement are having on revenue and expenses. We're seeing a fair amount of volatility, you know, both up and down in FX. What is sort of the flow-through on currency movements through revenue and expenses? It's been negative on the revenue side. I mean, overly simplistic, you can look, you know, call it roughly a quarter of the business is non-US. Exchange rates, while they've gotten a little better, depending on what perspective you've got here, but, you know, the dollar has still strengthened against almost every other currency. It's put some negative elements into the amount of revenues that we're ultimately presenting when it gets converted into US dollars. You're gonna have the same thing on the expense side. Ultimately, we've got more revenues than expenses, the currency exchange marketplace in calendar 2022 has negatively impacted our revenues. You know, not enough to explain the decline that we or the industry in general have seen, it's added just one extra equation to it. Are the expenses pretty much lined up with the revenue in terms of the different major currencies? Yes. We don't have any. We're pretty much perfectly hedged with respect to our expenses and our revenues on both compensation and non-compensation. Yeah. We do have some timing issues. Revenues in theory are coming in, you know, periodically, and bonuses get paid, in our case, roughly 2 x a year. You're not necessarily perfectly matched from a timing standpoint, but Lindsey's correct for the most part, where our revenues and costs country by country are reasonably close. Great. Thank you. as a reminder, it is star one if you do have a question at this time. We will go next to Jim Mitchell with Seaport Global. Hey, good afternoon. I just maybe follow up on the new, the new deal activity. I'm just trying to wrap my head around how you're talking about, you know, record backlog and new business activity remaining quite robust, but financing markets being mostly shut. It doesn't seem like there's any hesitation from your client base to at least engage in new at least discussions or transactions. I'm just why do you think that is? What's, what's driving the, I guess, the urgency to at least to have dialogues or sign new deals today if they're worried about financing and macro uncertainty? Good question. I'd say that the M&A process, given the length, which is, call it 9 months on average, a lot of private equity groups are betting or strategics are betting that there will be a soft landing. Why not sign us up, get us started, put your materials together, get ready to go to market, and then at the appropriate time, in the next 1, 2, 3, 5 months, we'll go to market. It is really just the groups that are signing us up generally believe that we will see, you know, improvements in the economy, and they just wanna be prepared to take advantage of it. I mean, I think that's the dynamic. If we end up falling into a deeper recession over the next 6 months, I think you'll see some of those new engagements probably unwind. I'd say that that's why you've got this, going back to Brennan's question, you've got this, difference between, you know, half of the clients are probably optimistic about the next several months, and half of them are a bit more pessimistic. Right. Okay. No, that's helpful. Just maybe circling back on the restructuring, we have seen a pretty big pickup in debt issuance, at least in the investment grade and even high yields in the public markets. Do you have, I mean, you seem very confident in the restructuring outlook, but if that continue, if that spigot continues to open up, does that start to dampen things, or are you pretty agnostic that, hey, there's a lot of at least liability management that has to happen given the change in rates, and we're not so concerned about whether they go to bankruptcy or not? Yeah. In restructuring, when you get hired, the probability of getting to a closed conclusion is very, very, very high. Much, much higher than classical M&A. We're obviously looking at the amount of business that we've signed up, and even if interest rate environment improves, even if the economy improves, even if certain things happen, these are usually companies with a variety of issues. You know, part of it is their capital structure, part of it is their business model itself. We have, you know, I'd say reasonably good confidence level that a lot of that work will end up in a closed transaction in some, you know, normal time period. You typically do get paid along the way, as well as a transaction fee. I think the things you're talking about, once again, are on the margin and don't appear to be altering the opportunity in the financial restructuring marketplace for ourselves and our competitors. All right. Great. Thanks. Thanks for the help. We'll go to a follow-up question from Brennan Hawken with UBS. Hey, thanks for taking my follow-up. Just maybe a little similar to my initial question, but a bit more tactical approach. In your prepared remarks, you spoke to the typical December quarter seasonality not really being there. How should we think about your fiscal 4th? Timelines are stretching, which is similar to your, you know, the prior set up, but the financing has loosened marginally a little. How are you thinking that that could play out? Should we count on some seasonality here in the March quarter? I'll give you the positives and negatives. On the positive, in theory, any of the deals, as I mentioned, where some lenders potentially just didn't wanna have something on their books by December 31, might be inclined to get something done in this March quarter. Houlihan Lokey, which is a March fiscal year end, we tend to have an internal push different than some of our other peers who are at December 31. All that's the positive fact patterns. The negative fact patterns is unfortunately, I think for most of calendar 2022, our expectations starting in the beginning of the month, were always a bit optimistic relative where we ended up at the end of the month. In contrast, just the opposite happened in calendar 2021. Just don't have enough conviction yet to say, "Oh, yeah, we have finally, you know, brought down the expectations of our internal bankers in the marketplace is heading us to a brighter future." Net-net, we think things are, I'd say, slightly better moving forward, but just haven't had enough, I'd say consistent months where we would say, "Yeah, we've hit that inflection point and things should definitely be growing from here." I guess as much clarity we can give ourselves and you, at this juncture. Okay. Thanks for, thanks for giving it a shot. Appreciate it, Scott. Okay. With no other questions in queue, I would now like to turn the call back over to Scott Beiser for any additional or closing remarks. Well, I want to thank you all for participating in our Q3 fiscal year 2023 earnings call. We look forward to updating everyone on our progress when we discuss our Q4 and full year results for fiscal 2023 this coming spring.