B. Riley Financial 2025 Q1 Earnings 65.5% Net Loss Reduction Despite 37.5% Revenue Drop

B. Riley Financial (RILY) reported a narrowed net loss of $16.57 million for Q1 2025, a 65.5% improvement from $47.95 million in Q1 2024. The company’s revenue fell 37.5% year-over-year to $186.06 million, driven by challenges in capital markets and broader economic conditions. While the results aligned with expectations of reduced losses, the sharp revenue decline and ongoing operational complexities highlight the need for strategic adjustments.

Revenue

Total revenue for Q1 2025 declined 37.5% to $186.06 million, reflecting sector-wide pressures. Communications led with $64.47 million, followed by Wealth Management’s $47.28 million. Consumer Products and E-Commerce contributed $42.10 million and $7 million, respectively, while the Capital Markets segment generated $4.36 million. The remaining $20.85 million came from diversified operations, underscoring the company’s fragmented revenue streams.

Earnings/Net Income

The 77.2% improvement in per-share loss—from $1.71 to $0.39—signals progress in cost management and operational efficiency. However, the $16.57 million net loss, though reduced, remains a significant drag on investor confidence.

Post-Earnings Price Action Review

The strategy of buying RILY shares after its revenue decline showed mixed performance over three years. While yielding a 15.23% return versus SPY’s 6.51%, the approach faced volatile swings, including a 25.81% drawdown in early 2024 and a 10.83% drop in mid-2024. Recovery periods followed, with rebounds of 31.25% and 11.11% by mid-2024 and late 2024, respectively. The strategy’s beta of 0.75 indicates moderate market sensitivity but underscores its suitability for high-risk, high-reward traders.

CEO Commentary

Chairman and Co-CEO Bryant Riley emphasized progress in financial reporting and auditor transition to BDO, calling the 10-Q filing a “step toward compliance.” While acknowledging the revenue drop, he highlighted efforts to streamline operations and reduce debt, stating, “Our heightened staffing and strategic partnerships position us to stabilize and grow.” The tone remained cautiously optimistic, balancing near-term challenges with long-term restructuring goals.

Guidance

The company did not provide explicit forward-looking revenue or EPS targets but indicated plans to maintain elevated staffing through the 2025 10-K filing. Management reiterated a focus on debt reduction, operational efficiency, and capitalizing on its diversified business segments.

Additional News

1. Name Change: B. Riley Financial will rebrand to BRC Group Holdings, Inc., effective January 1, 2026, reflecting its expanded portfolio across financial services, telecom, and retail.

2. Audit Transition: The company transitioned its 2025 audit to BDO USA, a top-five accounting firm, to enhance financial reporting transparency.

3. Nasdaq Compliance: B. Riley submitted an updated compliance plan to address delayed filings, aiming to avoid delisting while resolving SEC-related investigations.