B. Riley Financial (NASDAQ:RILY), which has rebranded as BRC Group Holdings (BRCGH), used its fourth-quarter and full-year 2025 earnings call to highlight a return to more normalized reporting and a year marked by divestitures, balance sheet deleveraging, and gains in its investment portfolio. Chairman Bryant Riley opened by noting the company’s Form 10-K was filed on time, calling it “an important milestone for our counterparties, shareholders, and organization as a whole.”
Riley said the last two years required the firm to “rebuild our balance sheet, shift operations, refocus parts of the platform,” and make difficult decisions, including selling businesses to strengthen the balance sheet. He described the company’s platform as a combination of advisory, capital markets, wealth management, principal investments, and recurring cash flow businesses. “As we sit here today, the model is intact, as exemplified by our recent results,” Riley said.
2025 results swing to profit on investment gains and lower expenses
For the full year, Yessner attributed the revenue increase primarily to higher trading gains, including $126 million of investment appreciation “primarily in Babcock & Wilcox,” and the comparison against a $325 million fair value loss on loans in 2024. Those increases were partially offset by lower service and fee revenues and lower interest income from securities lending, he said. Yessner also cited declines in communications subscription revenue due to “subscriber attrition and a divestiture of a Lingo wholesale business,” along with lower investment banking revenue.
Operating expenses fell meaningfully. Yessner said fourth-quarter operating expenses were $218 million versus $345 million in 2024, while full-year operating expenses were $892 million compared with $1.24 billion a year earlier. The reductions were driven by costs from exited businesses and the absence of goodwill impairments recorded in 2024, according to Yessner. He added that administrative costs had been elevated over the past two years, particularly professional fees, and said the company expects to reduce those costs as it returns to a “normalized operating cadence.”
The changes contributed to a significant earnings swing. Yessner reported fourth-quarter net income attributable to common shareholders of $85 million, compared with $900,000 in the prior-year quarter. Full-year net income attributable to common shareholders was $299 million, compared with a net loss of $772 million in 2024. Full-year earnings per share were $9.80, Riley said. Adjusted EBITDA was $104 million in the fourth quarter and $231 million for the full year, versus negative adjusted EBITDA in 2024.
Divestitures and rebranding reshape the platform
Co-CEO Tom Kelleher outlined several transactions completed in 2025 as part of the company’s deleveraging strategy:
- Atlantic Coast Recycling: sold in March 2025 for approximately $102 million, with net cash proceeds of about $69 million after adjustments.
- W2 wealth management: partial sale in April 2025 covering 36 financial advisors and roughly $4 billion in assets under management for net consideration of $26 million.
- GlassRatner Advisory & Capital Group and B. Riley Farber Advisory: sold in June 2025 for approximately $118 million in cash consideration.
Kelleher said the GlassRatner sale included a transition services agreement through the end of 2025, and a separate TSA tied to a 2024 partial sale of Great American was also completed at year-end 2025. He also said the company completed a multi-year effort to consolidate clearing arrangements for its wealth management business, which he said will streamline operations and “materially lower costs.”
Effective Jan. 1, 2026, the company rebranded as BRC Group Holdings to reflect what Kelleher described as an evolution from a financial services platform into “a diversified portfolio of distinct businesses spanning financial services, communications, retail, and investments across equity, debt, and venture capital.”
Segment performance: Communications exceeds expectations, Targus posts loss
Yessner said the company revised its segment presentation, including separating the former communications segment into four reportable segments that are aggregated as the “communications business group.” He said the capital markets segment now comprises solely B. Riley Securities.
In capital markets, fourth-quarter and full-year revenues were $93 million and $265 million, with segment income of $53 million and $89 million. However, Yessner noted that “core investment banking revenues were lower” in 2025, citing lower banker headcount and reduced client engagement “from, among other things, late SEC filings at the corporate parent.”
The Wealth segment posted fourth-quarter revenue of $47 million and full-year revenue of $176 million, with segment income of $8 million and $15 million. After the April 2025 sale of $4 billion in AUM, Yessner said wealth completed “a back-office integration and cost reduction program.” He added that wealth ended 2025 with $13 billion in assets under management and 197 registered representatives.
The communications business group (Lingo, magicJack, Marconi, and United Online) generated fourth-quarter and full-year revenues of $63 million and $250 million, with income of $13 million and $47 million. Yessner said results exceeded expectations, acknowledging a declining customer base but characterizing the business as “very profitable” with strong cash flow.
Targus, the consumer products segment, recorded fourth-quarter revenue of $49 million and full-year revenue of $182 million, but posted an operating segment loss of $4 million for the quarter and $16 million for the year. Yessner cited lower revenues, inventory write-downs, goodwill impairments, and tariff costs. He said tariff costs were approximately $4 million and had been submitted for reimbursement, with an update to come if reimbursement is realized. Yessner also flagged tariffs, conflicts, and chip shortages as risks in 2026, while noting sales had stabilized year over year in the fourth quarter of 2025 and into the first quarter of 2026.
Investment portfolio and debt reduction remain central themes
Yessner said “securities and other investments” increased $165 million to $447 million at year-end 2025, driven by a $129 million value increase in Babcock & Wilcox and a $28 million increase related to carried interest in funds that own SpaceX. At Dec. 31, 2025, Babcock & Wilcox was valued using a stock price of $6.34, and the company owned approximately 27.5 million shares at both Dec. 31, 2025 and March 31, 2026, Yessner said. The SpaceX carrying value was marked at $421 per share at year-end, according to Yessner.
Loans receivable at fair value declined $64 million to $26 million at Dec. 31, 2025, reflecting approximately $110 million of fundings and $170 million of repayments. Yessner said Acela Technologies represented $21 million of the remaining balance, with about $15 million due in 2026.
Equity measurement investments were $90 million at year-end 2025, up $5 million, with GA Group comprising $83 million of the balance. Yessner said GA Group performed well in 2025 and hired new executives, including a new CEO. He explained that because of GA Group’s capital structure, the company accounts for its stake using the Hypothetical Liquidation at Book Value method, meaning balance sheet valuation may not move significantly even if the business performs well.
On the balance sheet, Yessner said cash, restricted cash, and cash equivalents totaled $229 million at Dec. 31, 2025, down from $247 million a year earlier. Total debt was reduced by $347 million in 2025, and net debt declined $437 million to $627 million at year-end.
Looking to 2026, Yessner said three senior note series were scheduled to mature in 2026 totaling $457 million in principal, plus $16 million in scheduled paydowns on a subsidiary lending facility. He noted that on March 30, 2026, the RILYK senior notes were fully redeemed for about $96 million including accrued interest, and that the company announced $38 million in senior note reductions through exchanges and buybacks on March 12.
Specialty finance platform launched amid market dislocation
Riley and management also pointed to new business initiatives. Riley said the small- and mid-cap market is at an “inflection point” as traditional lenders pull back, and announced the launch of “BRC Specialty Finance,” a platform aimed at addressing short-term financing needs. In the Q&A, Riley described it as consistent with the firm’s long-standing role facilitating transactions, emphasizing a gap for shorter-duration loans where a lender can underwrite “not only the business, but the equity and all the assets of the estate.” He cited a recently completed $10 million receivables-backed loan to a public company, structured so receivables go directly to BRCGH and the loan is repaid in four months.
Riley said the company may syndicate some loans and described a relationship with a family office that could participate in larger transactions, while noting that whether loans are held on balance sheet would depend on timing, size, and syndication.
During the call, Riley also noted that the Delaware Court of Chancery dismissed in full the Marstons versus Riley derivative action, and said the company would not comment further on pending litigation.
Addressing a question on paying down remaining 2026 maturities, Riley and Yessner emphasized flexibility. Riley said the firm would consider a “combination of opportunities,” including bond swaps, buying bonds in the market, and selling investments, while Yessner said the company has “many different levers” including high cash flow businesses and capital actions.
About B. Riley Financial (NASDAQ:RILY)
B. Riley Financial, Inc, headquartered in Los Angeles, California, is a diversified financial services company offering a broad range of advisory and investment solutions to individual, corporate and institutional clients. Since its founding in 1997 by Bryant E. Riley, the firm has expanded its capabilities across two primary segments: financial solutions and operations solutions. Its financial solutions segment provides investment banking services, equity research, merger and acquisition advisory, corporate finance, restructuring advisory and private capital solutions.
In addition to traditional investment banking, B.
