BRC Group Holdings (RILY) investor relations material

Executive summary

• Q3 total revenue was $33.0M as $161.3M of operating revenue was offset by $128.3M of investment losses; common-shareholder loss was $243.0M, primarily reflecting Babcock & Wilcox losses and a GA Group impairment.

• 9M revenue was $624.2M; net loss available to common shareholders was $13.2M, or $0.40 per diluted share, and Operating Adjusted EBITDA was $103.3M.

• Strategy shifted capital toward cash-generative operating businesses; the GA Group sale reduced debt and supported the planned Sangoma acquisition.

Financial highlights

• Q3 Adjusted EBITDA was negative $219.1M and Operating Adjusted EBITDA was $2.9M; 9M figures were $104.3M and $103.3M, respectively.

• Q3 operating loss was $139.7M versus operating income of $65.4M YoY; 9M operating income rose to $51.4M from $14.7M.

• Q3 operating expenses declined $39.7M YoY to $172.7M; 9M expenses fell $101.7M to $572.8M.

• Q3 realized and unrealized investment losses were $97.5M and net trading losses were $124.4M; 9M operating cash flow was $123.9M.

Outlook and guidance

• Sangoma is expected to close by early 2027, subject to approvals and closing conditions; management expects $35M-$40M of incremental EBITDA including synergies.

• Sangoma is expected to add $75M-$80M of cash flows in 2027 and 2028 and more than double communications revenues.

• The $164.0M senior-note maturity, term-loan principal and leases are expected to be funded with cash, operating cash flows, asset realizations and capital markets; refinancing terms remain uncertain.

• Management cited an active equity, debt and M&A advisory pipeline, rising restructuring demand, and communications operations tracking ahead of full-year budget.