How did HGBL's revenue and expenses shift in Q4 2024 compared to previous quarters?

Heritage Global Inc. (HGBL) experienced a decline in revenue and a shift in expenses in Q4 2024 compared to previous quarters.

1. Revenue Decline: The total revenue for Q4 2024 was $10.77 million, which is a significant decrease from the previous quarter's revenue of $12.02 million. This decline of 29.6% can be attributed to various factors such as economic challenges, competitive pressures, or market conditions. Analysts had expected revenue to be $12.30 million, so the actual figure fell short of expectations.

2. Expense Shift: There are no available data on HGBL's expenses for Q4 2024. However, the company's financial results for Q3 2024 show operating income of $1.479 million and net income of $1.089 million. Comparing this to Q2 2024, where the company reported consolidated operating income of $3.5 million and adjusted EBITDA of $4 million, it indicates a decrease in operational income and profitability.
3. Profitability Impact: The net income for Q4 2024 was $1.09 million, which is a 45% decrease from the net income of $2.0 million in Q3 2023. The EPS also decreased to $0.03, down from $0.054 in the previous year's same quarter. This suggests that not only was revenue lower, but the company's profitability margins were also under pressure.
4. Market Challenges: Heritage Global has been navigating challenges in its financial assets division, with loans in nonaccrual status increasing to $24.6 million as of June 30, 2024, up from no loans in nonaccrual status as of December 31, 2023. This indicates potential credit risks that could have impacted revenue and profitability.

In summary, HGBL faced a challenging quarter with revenue declining and profitability margins under pressure due to various internal and external factors. The company's ability to navigate these challenges and adapt to market conditions will be crucial for future performance.