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

B. Riley Financial (RILY) reported a narrower net loss of $16.57 million ($0.39/share) for Q1 2025, a 65.5% improvement from the $47.95 million ($1.71/share) loss in Q1 2024. The company also outlined guidance for revenue stabilization in Q2 2025, signaling cautious optimism amid ongoing restructuring efforts.

Revenue

Total revenue declined 37.5% year-over-year to $186.06 million, with the Capital Markets segment contributing $4.36 million and Wealth Management generating $47.28 million. Communications and Consumer Products segments accounted for $64.47 million and $42.10 million, respectively, while E-Commerce and other segments added $7 million and $20.85 million. The revenue contraction reflects ongoing market volatility and reduced client activity.

Earnings/Net Income

The company’s net loss narrowed significantly, with a 65.5% reduction in losses year-over-year. This improvement underscores progress in cost optimization and strategic adjustments, though the loss per share remains a critical area for further enhancement.

Post-Earnings Price Action Review

A backtest of buying RILY shares after its Q1 2025 earnings report and holding for 30 days showed mixed performance over three years. While the strategy outperformed the SPY ETF by 15.25% versus 12.38%, quarterly results were inconsistent, with underperformance in Q1 2023 (-2.76%) and flat returns in Q4 2023. Annual performance improved, with 14.78% in 2024 and 16.67% in 2025 Q3, but volatility remains high. This suggests the strategy may appeal to short-term traders but lacks consistency for long-term investors.

CEO Commentary

Jeffrey Herman emphasized digital transformation and alternative asset management as growth drivers, while acknowledging near-term challenges. The CEO highlighted cost-cutting measures and operational efficiency as key priorities for 2025.

Guidance

Management expects revenue stabilization in Q2 2025, with a 5-

Additional News

1. Auditor Transition: B. Riley Financial transitioned to BDO for its 2025 audit, enhancing financial reporting reliability.

2. Corporate Name Change: The firm announced a rebranding to BRC Group Holdings, effective January 1, 2026, to reflect its diversified portfolio.

3. Debt Reduction: A private bond exchange reduced total debt by $18 million, with $25 million in new secured notes issued to refinance existing obligations.

Key Metrics Summary

• Revenue: $186.06M (Q1 2025 vs. $297.59M Q1 2024)

• Net Loss: $16.57M ($0.39/share) vs. $47.95M ($1.71/share)

• Stock Performance: 2.02% gain (1D), -11.58% (1W), 0.80% (MTD)

• Market Cap: $153.6M

Forward-Looking Challenges

• Ongoing SEC compliance risks amid delayed filings.

• Uncertain macroeconomic environment impacting investment banking and wealth management segments.

• Need for sustained operational efficiency to maintain profitability improvements.