B. Riley Swings to Profit on Trading Gains, Reduced Expenses

TL;DR

**RILYT is back in the black, but watch those asset sales and debt moves closely – it's a calculated recovery, not pure organic growth.**

AI Summary

B. Riley Financial, Inc. (RILYT) reported a significant turnaround in its financial performance for the six months ended June 30, 2025, achieving a net income of $124.43 million, a stark contrast to the net loss of $481.74 million in the prior year period. Total revenues increased to $411.37 million from $392.48 million, primarily driven by a substantial improvement in trading gains, which swung from a net loss of $48.99 million in 2024 to a gain of $11.51 million in 2025. Fair value adjustments on loans also improved, moving from a loss of $187.78 million to a loss of $7.30 million. The company's operating expenses decreased significantly to $462.03 million from $641.07 million, largely due to reduced direct cost of services and selling, general and administrative expenses. Income from discontinued operations also contributed positively, rising to $72.71 million from $28.72 million. The company's total assets decreased to $1.55 billion from $1.78 billion, while total liabilities decreased to $1.85 billion from $2.24 billion, reflecting a reduction in senior notes payable by over $200 million. Net cash provided by investing activities saw a substantial increase to $289.22 million from $6.70 million, driven by proceeds from the sale of businesses and discontinued operations.

Why It Matters

This dramatic swing to profitability for B. Riley Financial is a critical signal for investors, indicating a potential stabilization and recovery after a challenging prior year. The significant reduction in operating expenses and improved trading performance suggest more disciplined financial management and potentially better market conditions for its investment activities. For employees, this could mean greater job security and potential for growth. Customers might see a more stable and reliable partner in B. Riley. In the broader market, this turnaround could position B. Riley more competitively against other diversified financial services firms, especially given the substantial gains from asset sales and debt management.

Risk Assessment

Risk Level: medium — While B. Riley Financial reported a net income, the company still operates with a total deficit of $309.30 million as of June 30, 2025, though this is an improvement from $456.02 million at December 31, 2024. The significant gains on sale and deconsolidation of businesses ($86.21 million) and senior note exchange ($54.99 million) were crucial to the positive net income, suggesting that a portion of the turnaround is driven by one-time events rather than solely core operational improvements. The 'No' mark for filing all required reports in the preceding 12 months also indicates potential regulatory compliance issues.

Analyst Insight

Investors should scrutinize the sustainability of B. Riley's profitability, focusing on recurring revenue streams and core business segment performance rather than one-time gains. Monitor future filings for continued debt reduction and organic growth in services and fees. Consider the impact of the 'No' mark on SEC filing compliance as a potential red flag.

Financial Highlights

debt To Equity

N/A

revenue

$411.37M

operating Margin

N/A

total Assets

$1.55B

total Debt

$1.85B

net Income

$124.43M

eps

N/A

gross Margin

N/A

cash Position

$267.39M

revenue Growth

+4.8%

Revenue Breakdown

Key Numbers

• $124.43M — Net Income (Swung from a $481.74M loss in the prior year, indicating a significant financial turnaround.)
• $411.37M — Total Revenues (Increased from $392.48M in the prior year, showing revenue growth.)
• $11.51M — Trading Gains, net (A substantial improvement from a $48.99M net loss in the prior year, driving revenue growth.)
• $462.03M — Total Operating Expenses (Decreased significantly from $641.07M in the prior year, contributing to profitability.)
• $86.21M — Gain on Sale and Deconsolidation of Businesses (A major contributor to other income, highlighting strategic asset divestitures.)
• $54.99M — Gain on Senior Note Exchange (A significant one-time gain from debt restructuring efforts.)
• $1.55B — Total Assets (Decreased from $1.78B at December 31, 2024, reflecting asset sales and balance sheet adjustments.)
• $1.85B — Total Liabilities (Decreased from $2.24B at December 31, 2024, primarily due to reduced senior notes payable.)
• $289.22M — Net Cash Provided by Investing Activities (Increased substantially from $6.70M in the prior year, driven by proceeds from sales of businesses and discontinued operations.)
• $309.30M — Total Deficit (Improved from $456.02M at December 31, 2024, but still represents a negative equity position.)

Key Players & Entities

• B. Riley Financial, Inc. (company) — Registrant
• NASDAQ Global Market (regulator) — Exchange for RILY, RILYP, RILYL, RILYG, RILYK, RILYN, RILYZ, RILYT
• $124.43 million (dollar_amount) — Net income for six months ended June 30, 2025
• $481.74 million (dollar_amount) — Net loss for six months ended June 30, 2024
• $411.37 million (dollar_amount) — Total revenues for six months ended June 30, 2025
• $392.48 million (dollar_amount) — Total revenues for six months ended June 30, 2024
• $86.21 million (dollar_amount) — Gain on sale and deconsolidation of businesses for six months ended June 30, 2025
• $54.99 million (dollar_amount) — Gain on senior note exchange for six months ended June 30, 2025
• $309.30 million (dollar_amount) — Total deficit as of June 30, 2025
• $456.02 million (dollar_amount) — Total deficit as of December 31, 2024

FAQ

Risk Factors

• Market Volatility and Trading Losses [medium — financial]: The company's financial performance is sensitive to market conditions, as evidenced by the swing in trading gains from a $48.99 million loss in the prior year to an $11.51 million gain. Significant fluctuations in trading activities can materially impact profitability.
• Fair Value Adjustments on Loans [medium — financial]: The company experienced a loss of $7.30 million from fair value adjustments on loans for the six months ended June 30, 2025, an improvement from a $187.78 million loss in the prior year. However, continued volatility in loan valuations poses a risk.
• Significant Debt Load [high — financial]: Total liabilities decreased to $1.85 billion from $2.24 billion, largely due to a reduction in senior notes payable by over $200 million. Despite this reduction, the company still carries substantial debt obligations, including $1.32 billion in senior notes payable as of June 30, 2025.
• Dependence on Discontinued Operations and Asset Sales [medium — operational]: Income from discontinued operations was $72.71 million, a significant contributor to the turnaround. Net cash from investing activities increased to $289.22 million, driven by sales of businesses and discontinued operations. Reliance on these activities for cash flow and profitability presents a risk if such opportunities diminish.
• Negative Equity Position [high — financial]: The company reported a total deficit of $309.30 million, an improvement from $456.02 million at December 31, 2024. However, this negative equity position indicates a substantial deficit in stockholders' equity, which could impact financial flexibility and investor confidence.
• Regulatory Compliance [medium — regulatory]: As a financial services company, B. Riley Financial is subject to extensive regulation. Changes in regulatory requirements or failure to comply could result in fines, sanctions, or reputational damage.
• Interest Rate Sensitivity [medium — market]: Changes in interest rates can affect the company's borrowing costs, investment returns, and the valuation of its loan portfolio. The company has $124.58 million in term loans and $1.32 billion in senior notes payable, making it sensitive to interest rate fluctuations.
• Integration of Acquisitions and Divestitures [medium — operational]: The company has engaged in sales of businesses and discontinued operations. The successful integration of past acquisitions and the management of ongoing divestitures are critical for realizing strategic goals and avoiding operational disruptions.

Industry Context

B. Riley Financial operates in the diversified financial services sector, encompassing investment banking, capital markets, wealth management, and financial consulting. The industry is characterized by intense competition, regulatory scrutiny, and sensitivity to macroeconomic conditions, including interest rates and market volatility. Recent trends show a focus on strategic divestitures and consolidation to streamline operations and enhance profitability.

Regulatory Implications

As a financial services firm, B. Riley Financial is subject to stringent regulations from bodies like the SEC and FINRA. Compliance with capital requirements, anti-money laundering laws, and consumer protection regulations is critical. Any failure to adhere to these rules can lead to significant penalties, operational restrictions, and reputational damage.

What Investors Should Do

1. Monitor debt reduction and equity improvement
2. Analyze sustainability of revenue drivers
3. Evaluate risk management strategies
4. Assess impact of discontinued operations

Key Dates

• 2025-06-30: Six months ended June 30, 2025 — Reported a significant turnaround with $124.43M net income, compared to a $481.74M loss in the prior year period. Total revenues increased to $411.37M.
• 2024-12-31: As of December 31, 2024 — Reported total assets of $1.78B and total liabilities of $2.24B, with a total deficit of $456.02M.
• 2024-06-30: Six months ended June 30, 2024 — Reported a net loss of $481.74M and total revenues of $392.48M. Trading activities resulted in a net loss of $48.99M.

Glossary

Accumulated deficit

The cumulative net losses of a company that have not been offset by net income or additional paid-in capital. (Indicates the company's historical unprofitability, with a current accumulated deficit of $941.24M as of June 30, 2025.)

Assets of discontinued operations

Assets of a business segment that the company has decided to sell or dispose of. (The company had $2.22M in assets of discontinued operations as of June 30, 2025, contributing to the overall balance sheet adjustments.)

Liabilities of discontinued operations

Liabilities of a business segment that the company has decided to sell or dispose of. (The company had $0.83M in liabilities of discontinued operations as of June 30, 2025.)

Noncontrolling interests

The portion of equity of a subsidiary that is not attributable to the parent company. (Represents $42.40M of equity as of June 30, 2025, indicating ownership stakes in subsidiaries held by third parties.)

Senior notes payable

Unsecured debt obligations that rank higher in priority than other unsecured debt in the event of bankruptcy. (A significant component of the company's debt, totaling $1.32B as of June 30, 2025, with a reduction of over $200M from the prior year.)

Goodwill

An intangible asset that arises when one company acquires another for a price greater than the fair market value of its net assets. (The company holds $392.69M in goodwill as of June 30, 2025, reflecting past acquisitions.)

Other intangible assets, net

Intangible assets such as patents, trademarks, and customer lists, net of amortization. (The company has $131.32M in other intangible assets as of June 30, 2025.)

Fair value

The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. (Used to value securities and loans, with significant fair value adjustments impacting the income statement.)

Year-Over-Year Comparison

B. Riley Financial has demonstrated a significant financial turnaround in the six months ended June 30, 2025, compared to the same period in 2024. Total revenues increased by 4.8% to $411.37 million, driven by a substantial improvement in trading gains and reduced losses from fair value adjustments on loans. Most notably, net income swung from a substantial loss of $481.74 million to a profit of $124.43 million. This improvement was also aided by a significant reduction in operating expenses and positive contributions from discontinued operations. The balance sheet reflects a reduction in total assets to $1.55 billion from $1.78 billion and total liabilities to $1.85 billion from $2.24 billion, primarily due to debt paydowns. The company's total deficit also improved, though it remains negative.

Key Financial Figures

• $0.0001 — ich registered Common Stock, par value $0.0001 per share RILY NASDAQ Global Market De

Filing Documents

• rily-20250630.htm (10-Q) — 4278KB
• ex106_brpiacxfirstamendmen.htm (EX-10.6) — 87KB
• ex107_brpiacxsecondamendme.htm (EX-10.7) — 85KB
• ex108_babcockaxosjune2025a.htm (EX-10.8) — 23KB
• ex109_tiger-creditandsecur.htm (EX-10.9) — 1931KB
• ex1010_targus-amendmentno1.htm (EX-10.10) — 2076KB
• ex1011_targus-amendmentno2.htm (EX-10.11) — 1915KB
• ex1012_targus-amendmentno3.htm (EX-10.12) — 2111KB
• ex1013_targus-amendmentno4.htm (EX-10.13) — 1949KB
• ex1014_targus-amendmentno5.htm (EX-10.14) — 1970KB
• ex1015_targus-keepwellagre.htm (EX-10.15) — 72KB
• ex1016_targus-amendmentno1.htm (EX-10.16) — 33KB
• ex1017_targus-amendmentno2.htm (EX-10.17) — 34KB
• ex1018_braves-warrantvr.htm (EX-10.18) — 138KB
• ex1019_braves-registration.htm (EX-10.19) — 139KB
• ex1020_braves-warrantafggr.htm (EX-10.20) — 137KB
• ex1021_braves-registration.htm (EX-10.21) — 143KB
• rily-20250630xexx311.htm (EX-31.1) — 10KB
• rily-20250630xexx312.htm (EX-31.2) — 10KB
• rily-20250630xexx313.htm (EX-31.3) — 10KB
• rily-20250630xexx321.htm (EX-32.1) — 5KB
• rily-20250630xexx322.htm (EX-32.2) — 5KB
• rily-20250630xexx323.htm (EX-32.3) — 4KB
• 0001464790-25-000029.txt ( ) — 39430KB
• rily-20250630.xsd (EX-101.SCH) — 125KB
• rily-20250630_cal.xml (EX-101.CAL) — 180KB
• rily-20250630_def.xml (EX-101.DEF) — 972KB
• rily-20250630_lab.xml (EX-101.LAB) — 1383KB
• rily-20250630_pre.xml (EX-101.PRE) — 1207KB
• rily-20250630_htm.xml (XML) — 5004KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1. Unaudited Condensed Consolidated Financial Statements 1 Unaudited Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024 1 Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2025 and 2024 3 Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2025 and 2024 5 Unaudited Condensed Consolidated Statements of Equity (Deficit) for the three and six months ended June 30, 2025 and 2024 6 Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024 8 Notes to Unaudited Condensed Consolidated Financial Statements 11 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 79 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 102 Item 4.

Controls and Procedures

Controls and Procedures 103

OTHER INFORMATION

PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 107 Item 1A.

Risk Factors

Risk Factors 108 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 110 Item 3. Defaults Upon Senior Securities 110 Item 4. Mine Safety Disclosures 110 Item 5. Other Information 110 Item 6. Exhibits 111

SIGNATURES

SIGNATURES 115 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. B. RILEY FINANCIAL, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Dollars in thousands, except par value) June 30, 2025 December 31, 2024 (Unaudited) ASSETS Assets: Cash and cash equivalents (1) $ 267,388 $ 146,852 Restricted cash 1,255 100,475 Due from clearing brokers 45,380 30,713 Securities and other investments owned (includes $ 172,135 and $ 215,225 at fair value as of June 30, 2025 and December 31, 2024, respectively (1) 242,352 282,325 Securities borrowed 72,320 43,022 Accounts receivable, net of allowance for credit losses of $ 6,022 and $ 6,100 as of June 30, 2025 and December 31, 2024, respectively 61,233 68,653 Due from related parties 185 189 Loans receivable, at fair value (includes $ 19,370 and $ 51,902 from related parties as of June 30, 2025 and December 31, 2024, respectively) 48,980 90,103 Prepaid expenses and other assets (includes $ 75 and $ 3,449 from related parties as of June 30, 2025 and December 31, 2024, respectively) (1) 219,972 242,916 Operating lease right-of-use assets 40,178 51,509 Property and equipment, net 18,452 18,679 Goodwill 392,687 392,687 Other intangible assets, net 131,320 146,446 Deferred income taxes 1,300 13,598 Assets held for sale (Note 4) — 84,723 Assets of discontinued operations (Note 4) 2,221 70,373 Total assets $ 1,545,223 $ 1,783,263 LIABILITIES AND EQUITY (DEFICIT) Liabilities: Accounts payable $ 35,081 $ 51,238 Accrued expenses and other liabilities (1) 175,144 185,745 Deferred revenue 53,499 58,148 Deferred income taxes 2,264 5,462 Due to related parties and partners 1,198 3,404 Securities sold not yet purchased 12,347 5,675 Securities loaned 54,588 27,942 Operating lease liabilities 48,714 58,499 Notes payable — 28,021 Loan participations sold 10,475 6,000 Revolving credit facility 12,075 16,329 Term loans, net 124,584 199,429 Senior notes payable, net 1,323,727 1,530,561 Liabilities held for sale (Note 4) — 41,50

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