Great Elm (GEG) - 2026 Q2 - Quarterly Results

Financial Performance - The company reported a net loss of $16.5 million for the second quarter, compared to a net income of $1.4 million in the prior-year period, primarily due to a significant unrealized loss of $14.4 million[10] - Total revenue for the second quarter was $3.0 million, down from $3.5 million in the prior-year period[7] - Revenues for Q2 2025 were $3,011,000, a decrease of 14.1% compared to $3,507,000 in Q2 2024[22] - Net loss attributable to Great Elm Group, Inc. stockholders was $15,754,000 for Q2 2025, compared to a net income of $1,176,000 in Q2 2024[22] - The company reported a net realized and unrealized loss of $11,361,000 in Q2 2025, contrasting with a gain of $2,428,000 in Q2 2024[22] - Basic net loss per share for Q2 2025 was $(0.50), compared to $0.04 in Q2 2024[22] - For the six months ended December 31, 2025, revenues increased to $13,799,000, up 84.5% from $7,499,000 in the same period of 2024[22] - Operating loss for the six months ended December 31, 2025 was $(7,959,000), compared to $(3,973,000) for the same period in 2024[22] - Adjusted EBITDA for Q2 2025 was $(1,628,000), a decline from $1,024,000 in Q2 2024[23] Asset Management - GEG's fee-paying assets under management (FPAUM) grew by 4% year-over-year to approximately $561 million, while total assets under management (AUM) decreased by 2% to $740 million[7] - GEG had approximately $51.2 million in cash and cash equivalents as of December 31, 2025, to support growth initiatives[10] Shareholder Actions - GEG repurchased approximately 1.1 million shares, or over 3% of shares outstanding, at an average price of $2.47 per share during the quarter[10] - GEG's stock repurchase program has a remaining capacity of approximately $12.3 million for future repurchases[12] Investments and Partnerships - The CoreWeave-related investment generated a realized gain of $2.2 million, with total distributions received to date amounting to $5.8 million, exceeding the original investment of $5 million[10] - Great Elm Real Estate Ventures, formed through a strategic partnership, consolidates three real estate subsidiaries, enhancing operational efficiency[10] Operational Changes - The Great Elm Credit Income Fund began an orderly wind-down in response to recent portfolio events and market conditions[10] - Total operating costs and expenses increased to $7,228,000 in Q2 2025, up 43.8% from $5,026,000 in Q2 2024[22] Interest and Shares - Interest expense remained relatively stable at $1,022,000 for Q2 2025, compared to $1,030,000 in Q2 2024[23] - The weighted average shares outstanding for basic shares increased to 31,624,000 in Q2 2025 from 27,983,000 in Q2 2024[22]