Great Elm (GEG) - 2025 Q3 - Quarterly Results

Financial & Operational Highlights Great Elm Group's Q3 FY2025 saw 15% revenue growth to $3.2 million, but net loss widened to ($4.5) million, while FPAUM increased 15% to $565 million Key Financial Metrics | Financial Metric | Q3 FY2025 | Q3 FY2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $3.2 million | $2.8 million | +15% | | Net Loss from Continuing Operations | ($4.5) million | ($2.9) million | Increased Loss | | Adjusted EBITDA | $0.5 million | $1.2 million | -58.3% | Assets Under Management | Metric | As of March 31, 2025 | YoY Growth | | :--- | :--- | :--- | | Fee-Paying AUM (FPAUM) | ~$565 million | +15% | | Assets Under Management (AUM) | ~$768 million | +12% | - In February 2025, Great Elm acquired the assets of Greenfield CRE and formed Monomoy Construction Services, LLC (MCS), creating an integrated, full-service construction business for its real estate verticals[5] - As of May 6, 2025, the company has repurchased approximately 4.8 million shares for $8.7 million, at an average price of $1.84 per share, through its share repurchase program[5] - The company maintained a strong liquidity position with approximately $32 million of cash on its balance sheet as of March 31, 2025, to support growth initiatives[5] Management Commentary CEO Jason Reese highlighted solid quarterly performance with expanding AUM, strong credit and real estate businesses, and strategic initiatives like Monomoy Construction Services - GECC achieved record total investment income in the first calendar quarter of 2025 and is expected to pay significant incentive fees to GEG in upcoming quarters[4] - The launch of Monomoy Construction Services (MCS) in February, through the acquisition of Greenfield CRE, adds specialized construction experience to the company's real estate platform[4] - The company continued its share repurchase program during the quarter, buying back shares at an attractive discount to its book value of $2.14 per share (as of March 31, 2025)[5][6] Business & Strategic Updates Great Elm executed key strategic initiatives, including the acquisition of Greenfield CRE to form Monomoy Construction Services and an active stock repurchase program - In February 2025, Great Elm acquired Greenfield CRE's assets and combined them with Monomoy BTS Construction Management to launch MCS, a full-service construction business offering project management, procurement, and other services[10] - The Board of Directors approved an incremental $20 million stock repurchase program. As of May 6, 2025, the company has utilized $8.7 million of this authorization to repurchase 4.8 million shares[11] GEG Managed Vehicle Highlights GEG's managed vehicles, including GECC and Monomoy real estate platforms, demonstrated strong operational performance and strategic advancements - GECC Highlights: - Generated record Total Investment Income (TII) of $12.5 million for the quarter - Increased its quarterly distribution by 5.7% to $0.37 per share - Launched a $100 million At-the-Market (ATM) equity program to provide capital flexibility[12] - Monomoy Real Estate Highlights: - Monomoy BTS closed on a land purchase for its third build-to-suit property - Monomoy REIT acquired a property for approximately $3.0 million and maintains a strong transaction pipeline[12] - The Great Elm Credit Income Fund delivered a return of approximately 13.9% (net of fees) from its inception on November 1, 2023, through March 31, 2025[12][18] Financial Statements The financial statements detail the company's financial position and performance, showing revenue growth but an increased net loss and decreased Adjusted EBITDA Condensed Consolidated Balance Sheets As of March 31, 2025, total assets decreased to $137.2 million, primarily due to lower cash, while total stockholders' equity declined to $65.3 million Condensed Consolidated Balance Sheet Data | Balance Sheet Item | March 31, 2025 (Thousands USD) | June 30, 2024 (Thousands USD) | | :--- | :--- | :--- | | Cash and cash equivalents | $31,528 | $48,147 | | Total assets | $137,190 | $140,446 | | Total liabilities | $71,875 | $70,251 | | Total stockholders' equity | $65,315 | $70,195 | Condensed Consolidated Statements of Operations Q3 FY2025 revenues grew 15% to $3.2 million, but net loss from continuing operations widened to ($4.5) million, resulting in a ($0.17) loss per share Condensed Consolidated Statements of Operations Data | Income Statement Item | Q3 FY2025 (Thousands USD) | Q3 FY2024 (Thousands USD) | | :--- | :--- | :--- | | Revenues | $3,209 | $2,787 | | Operating loss | ($2,555) | ($1,869) | | Net (loss) from continuing operations | ($4,501) | ($2,883) | | Basic & Diluted EPS | ($0.17) | ($0.10) | Reconciliation to Adjusted EBITDA Adjusted EBITDA for Q3 FY2025 significantly decreased to $0.5 million from $1.2 million, primarily due to unrealized investment losses and other adjustments Adjusted EBITDA Reconciliation | Item | Three months ended March 31, 2025 (Thousands USD) | Three months ended March 31, 2024 (Thousands USD) | | :--- | :--- | :--- | | Net (loss) from continuing operations - GAAP | $(4,501) | $(2,883) | | Adjusted EBITDA | $472 | $1,228 |