Heritage Global (HGBL) investor relations material

Executive summary

• Q3 revenue rose to $14.6M from $11.4M YoY; net income was $1.0M, while operating income declined to $1.0M from $1.3M.

• Nine-month net loss was $14.1M, reflecting an $18.2M noncash impairment and credit-loss charges; management reported $4.0M of Adjusted EBITDA.

Financial highlights

• Q3 services revenue was $9.8M versus $7.5M YoY; asset sales were $4.8M versus $3.9M, and gross profit was $9.2M versus $7.3M.

• Q3 net income was $1.0M, or $0.03 per diluted share, versus $0.6M, or $0.02 per diluted share; Adjusted EBITDA was $1.4M versus $1.6M.

• Nine-month revenue was $39.6M versus $39.1M; operating loss was $18.9M versus income of $4.9M, and net loss was $14.1M versus net income of $3.3M.

• Nine-month gross profit rose to $25.9M from $23.7M; SG&A increased to $26.4M from $18.6M, primarily reflecting DebtX and Boston Note operations and higher auction commissions.

Outlook and guidance

• Management cited a strong auction pipeline for Q4 and 2027, including larger industrial opportunities across multiple sectors, and expects a strong Q4 close.

• DebtX is forecasting a stronger Q4; expanded sales coverage is intended to address slower-than-expected CRE asset monetization and uncertainty over transaction timing.

• Specialty Lending wind-down is expected to finish by end-2027; HGC operating expenses are expected to decline beginning in Q1, depending on remaining portfolio activity.

• Colorado real-estate monetization may contribute to P&L results starting in 2027, with completion potentially extending into 2028.

• Working capital, operating cash flow and the 2026 Credit Facility are expected to fund operations and debt service for 12 months from filing and beyond.