Great Elm 2025 Q3 Earnings Record Revenues Despite Wider Net Loss

Great Elm (GEG) reported its fiscal 2025 Q3 earnings on May 7th, 2025. The total revenue increased by 15.1% to $3.21 million, while losses widened to $0.17 per share. Despite the increased net loss of $4.50 million, representing a 56.1% increase from the previous year, the company set a new record for fiscal Q3 net income, the highest in 17 years. The stock edged up 0.53% during the latest trading day. Great Elm provided guidance for continued growth in core businesses and an expectation for GECC to pay meaningful incentive fees in future quarters.

Revenue
Great Elm's total revenue for 2025 Q3 rose by 15.1% to $3.21 million, up from $2.79 million in 2024 Q3. This growth was driven by management fees generating $1.81 million, while incentive fees contributed $169,000. Additionally, administration and service fees amounted to $424,000, property management fees brought in $307,000, project management fees added $365,000, and real estate rental income totaled $136,000.

Earnings/Net Income
Great Elm's losses deepened to $0.17 per share in 2025 Q3 from a loss of $0.10 per share in 2024 Q3, reflecting a 70.0% wider loss. The company's net loss expanded to $4.50 million in 2025 Q3, a 56.1% increase from the $2.88 million loss recorded in 2024 Q3. The earnings per share performance indicates financial challenges for the company.

Price Action
The stock price of Great Elm has edged up 0.53% during the latest trading day, has increased by 1.05% over the most recent full trading week, and has risen 1.59% month-to-date.

Post-Earnings Price Action Review
The strategy of purchasing Great Elm (GECC) shares following a quarter-over-quarter revenue increase and holding for 30 days has yielded robust results over the past five years. From January 2020 to April 2025, this approach achieved an annualized return of 21.46%, with 66.88% of months experiencing positive returns. The strategy also demonstrated resilience, with the maximum drawdown of 23.55% being recovered within 18 months, suggesting potential stability and recovery in market downturns. This backtested performance highlights the strategy's potential to generate strong returns while managing risk, offering a noteworthy approach for investors seeking both growth and stability. However, past performance is not indicative of future results, and investing always carries some level of risk.

CEO Commentary
Jason Reese, Chief Executive Officer of Great Elm Group, expressed confidence in the company's performance during the fiscal third quarter of 2025, emphasizing growth in assets under management and achievements in the credit and real estate sectors. He highlighted the record total investment income delivered by Great Elm Capital Corp. and the successful launch of Monomoy Construction Services, enhancing their real estate platform. Reese also acknowledged the ongoing share repurchase program at attractive discounts and reiterated the commitment to pursuing compelling investment opportunities to maximize long-term shareholder value.

Guidance
Great Elm Group expects to continue expanding its core businesses and leveraging its growing project pipeline. The company anticipates that GECC will pay meaningful incentive fees to GEG in the upcoming quarters. Management is focused on driving growth through strategic investments and maintaining a robust project and property pipeline, positioning the company for future success despite current market challenges.

Additional News
In February 2025, Great Elm Group acquired the assets of Greenfield CRE and formed Monomoy Construction Services, LLC, integrating Greenfield's assets with Monomoy BTS Construction Management. This acquisition aims to bolster Great Elm's real estate verticals. Additionally, Great Elm's Board of Directors approved a stock repurchase program authorizing up to $20 million in stock repurchases. As of May 6, 2025, the company repurchased approximately 4.8 million shares at an average cost of $1.84 per share. GECC also launched a $100 million At-the-Market equity program, providing additional capital flexibility post-quarter end.