Siebert's Net Income Halves Amid Soaring Expenses, Despite Revenue Growth

TL;DR

**SIEB's revenue growth is a mirage; ballooning expenses are crushing profits, making it a risky bet for now.**

AI Summary

Siebert Financial Corp. (SIEB) reported a significant decline in net income for the nine months ended September 30, 2025, falling to $5,566,000 from $11,568,000 in the prior year, a decrease of 51.8%. This was despite a 10.6% increase in total revenue, which rose to $70,640,000 from $63,879,000. The primary driver of the revenue growth was a substantial increase in stock borrow/stock loan income, which surged to $22,407,000 from $14,578,000, a 53.7% increase. However, this was offset by a sharp rise in expenses, particularly employee compensation and benefits, which increased by 27.9% to $41,670,000 from $32,569,000. Operating income consequently dropped by 55.9% to $6,852,000 from $15,520,000. The company also saw a decrease in cash and cash equivalents from $32,629,000 at December 31, 2024, to $19,649,000 at September 30, 2025. Strategic investments included $2,000,000 in FusionIQ and the acquisition of BMLG assets for $441,000, indicating a focus on technology and media expansion.

Why It Matters

Siebert's substantial drop in net income, despite revenue growth, signals potential margin pressures and operational inefficiencies that investors should scrutinize. The significant increase in employee compensation and benefits, alongside other rising expenses, suggests a competitive environment for talent or increased operational costs that are eroding profitability. For employees, this could indicate a period of increased hiring or compensation adjustments, while customers might see continued investment in services, as evidenced by the FusionIQ investment. In the broader market, this performance highlights the challenges smaller broker-dealers face in balancing growth initiatives with cost control in a dynamic financial services landscape.

Risk Assessment

Risk Level: high — The company's net income plummeted by 51.8% from $11,568,000 to $5,566,000 for the nine months ended September 30, 2025, despite a 10.6% increase in total revenue. This significant decline in profitability, coupled with a 27.9% increase in employee compensation and benefits to $41,670,000, indicates substantial operational challenges and cost control issues, posing a high risk to future earnings.

Analyst Insight

Investors should exercise caution and consider holding off on new investments in SIEB until there's clear evidence of improved cost management and a reversal in the declining net income trend. Current investors should evaluate their position, as the significant drop in profitability and rising expenses suggest potential further downside if these issues are not addressed effectively.

Financial Highlights

revenue

$70,640,000

net Income

$5,566,000

eps

$0.14

cash Position

$19,649,000

revenue Growth

+10.6%

Revenue Breakdown

Key Numbers

• $5,566,000 — Net income for nine months ended Sep 30, 2025 (Decreased by 51.8% from $11,568,000 in the prior year)
• $70,640,000 — Total Revenue for nine months ended Sep 30, 2025 (Increased by 10.6% from $63,879,000 in the prior year)
• $22,407,000 — Stock borrow / stock loan revenue for nine months ended Sep 30, 2025 (Increased by 53.7% from $14,578,000 in the prior year)
• $41,670,000 — Employee compensation and benefits for nine months ended Sep 30, 2025 (Increased by 27.9% from $32,569,000 in the prior year)
• $6,852,000 — Operating income for nine months ended Sep 30, 2025 (Decreased by 55.9% from $15,520,000 in the prior year)
• $19,649,000 — Cash and cash equivalents as of Sep 30, 2025 (Decreased from $32,629,000 as of Dec 31, 2024)
• $2,000,000 — Investment in FusionIQ (New investment made during the nine months ended Sep 30, 2025)
• $0.14 — Basic and diluted net income per share for nine months ended Sep 30, 2025 (Decreased from $0.29 in the prior year)
• 40,426,936 — Shares outstanding as of Sep 30, 2025 (Increased from 40,120,936 shares outstanding as of Dec 31, 2024)
• $4,304,000 — NFS business development credits (Positive change in cash flows from operating activities for nine months ended Sep 30, 2025)

Key Players & Entities

• Siebert Financial Corp. (company) — Registrant and holding company
• Muriel Siebert & Co., LLC (company) — Wholly-owned subsidiary providing retail brokerage and investment banking
• Siebert AdvisorNXT, LLC (company) — Wholly-owned subsidiary providing investment advisory services
• Gebbia Media, LLC (company) — Subsidiary providing management and promotion of sports and music talent, and in-house production
• FINRA (regulator) — Financial Industry Regulatory Authority
• SEC (regulator) — Securities and Exchange Commission
• Nasdaq Capital Market (market) — Exchange where SIEB common stock trades
• FusionIQ (company) — Company in which SIEB made a $2,000,000 investment
• BMLG (company) — Assets acquired by SIEB for $441,000
• J2 Financial (company) — Company involved in a transaction with SIEB

FAQ

Risk Factors

• Declining Net Income Despite Revenue Growth [high — financial]: Net income fell 51.8% to $5,566,000 from $11,568,000, while revenue grew 10.6% to $70,640,000. This indicates significant margin compression, primarily driven by a 27.9% increase in employee compensation and benefits to $41,670,000.
• Rising Operating Expenses [high — operational]: Employee compensation and benefits increased by 27.9% to $41,670,000, outpacing revenue growth and significantly impacting profitability. This led to a 55.9% drop in operating income to $6,852,000.
• Decreasing Cash Position [medium — financial]: Cash and cash equivalents decreased from $32,629,000 at the end of 2024 to $19,649,000 as of September 30, 2025, a reduction of over 39%. This could limit future investment or operational flexibility.
• Dependence on Stock Borrow/Loan Income [medium — market]: While stock borrow/stock loan revenue increased by 53.7% to $22,407,000, this segment's performance is subject to market volatility and interest rate fluctuations, posing a concentration risk.
• Diluted Earnings Per Share Decline [medium — financial]: Basic and diluted net income per share decreased to $0.14 from $0.29 in the prior year, reflecting the sharp decline in net income and potentially impacting shareholder value perception.

Industry Context

The financial services industry, particularly brokerage and clearing services, is highly competitive and sensitive to market volatility and interest rate environments. Companies like SIEB rely on diverse revenue streams, including transaction fees, interest income, and securities lending, to maintain profitability. Increased regulatory scrutiny and the ongoing push for technological innovation are key trends shaping the sector.

Regulatory Implications

As a financial services firm, SIEB is subject to stringent regulations from bodies like the SEC and FINRA. Changes in market regulations, capital requirements, or compliance standards can significantly impact operational costs and business strategies. The company's focus on technology investments may also bring new compliance considerations.

What Investors Should Do

1. Monitor expense growth, particularly employee compensation.
2. Analyze the sustainability of stock borrow/stock loan revenue.
3. Evaluate the strategic rationale and ROI of investments in FusionIQ and BMLG assets.
4. Assess the impact of the declining cash position.

Key Dates

• 2025-09-30: Nine months ended September 30, 2025 — Period marked by significant net income decline despite revenue growth, driven by increased expenses.
• 2025-09-30: Cash and cash equivalents as of September 30, 2025 — Represents a substantial decrease from the prior year-end, indicating cash outflow or investment.
• 2024-12-31: Cash and cash equivalents as of December 31, 2024 — Baseline for comparison of the significant cash reduction observed in the nine months of 2025.

Glossary

Stock borrow / Stock loan

Revenue generated from lending securities to other market participants, often short-sellers, and receiving fees or interest. (A key revenue driver for SIEB, showing significant growth but also potential volatility.)

Operating income

Profitability from a company's core business operations before interest and taxes. (Demonstrates a sharp decline, highlighting the impact of rising expenses on the company's primary activities.)

Basic and diluted net income per share

The portion of a company's profit allocated to each outstanding share of common stock, calculated with and without the effect of dilutive securities. (Shows a significant decrease, reflecting the overall decline in profitability on a per-share basis.)

FusionIQ

Likely a technology platform or company, indicated by the strategic investment made by SIEB. (Represents a strategic investment aimed at expanding the company's technological capabilities.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, SIEBERT FINANCIAL CORP. experienced a significant 51.8% decrease in net income, falling to $5,566,000 from $11,568,000, despite a 10.6% increase in total revenue to $70,640,000. This divergence was primarily driven by a substantial 27.9% rise in employee compensation and benefits expenses, which grew to $41,670,000, leading to a 55.9% drop in operating income. The company's cash position also weakened considerably, decreasing by over 39% from $32,629,000 at year-end 2024 to $19,649,000 as of September 30, 2025.

Key Financial Figures

• $0.01 — nge on which registered Common Stock - $0.01 par value SIEB The Nasdaq Capital Marke

Filing Documents

• ea0264461-10q_siebert.htm (10-Q) — 1088KB
• ea026446101ex31-1_siebert.htm (EX-31.1) — 10KB
• ea026446101ex31-2_siebert.htm (EX-31.2) — 10KB
• ea026446101ex32-1_siebert.htm (EX-32.1) — 5KB
• ea026446101ex32-2_siebert.htm (EX-32.2) — 5KB
• 0001213900-25-109356.txt ( ) — 7520KB
• sieb-20250930.xsd (EX-101.SCH) — 80KB
• sieb-20250930_cal.xml (EX-101.CAL) — 81KB
• sieb-20250930_def.xml (EX-101.DEF) — 338KB
• sieb-20250930_lab.xml (EX-101.LAB) — 643KB
• sieb-20250930_pre.xml (EX-101.PRE) — 365KB
• ea0264461-10q_siebert_htm.xml (XML) — 1048KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION 1

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS 1 CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION 1 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 2 CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY 3 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 4 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 5

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 25

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 34

CONTROLS AND PROCEDURES

ITEM 4. CONTROLS AND PROCEDURES 34

- OTHER INFORMATION

PART II - OTHER INFORMATION 35

LEGAL PROCEEDINGS

ITEM 1. LEGAL PROCEEDINGS 35

RISK FACTORS

ITEM 1A. RISK FACTORS 35

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 35

DEFAULTS UPON SENIOR SECURITIES

ITEM 3. DEFAULTS UPON SENIOR SECURITIES 35

MINE SAFETY DISCLOSURES

ITEM 4. MINE SAFETY DISCLOSURES 35

OTHER INFORMATION

ITEM 5. OTHER INFORMATION 35

EXHIBITS

ITEM 6. EXHIBITS 35

SIGNATURES

SIGNATURES 36 - i - Forward-Looking For purposes of this Quarterly Report on Form 10-Q ("Report"), the terms "Siebert," "Company," "we," "us" and "our" refer to Siebert Financial Corp., and its wholly-owned and majority-owned subsidiaries collectively, unless the context otherwise requires. The are "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking and Results of Operations." Forward-looking statements include statements preceded by, followed by or that include the words "may," "could," "would," "should," "believe," "expect," "anticipate," "plan," "estimate," "target," "project," "intend" and similar words or expressions. In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances are

forward-looking statements

forward-looking statements. These forward-looking statements, which reflect our beliefs, objectives, and expectations as of the date hereof, are based on the best judgement of management. All forward-looking statements speak only as of the date on which they are made. Such forward-looking statements are subject to certain risks, uncertainties and assumptions relating to factors that could cause actual results to differ materially from those anticipated in such statements, including the following: economic, social and political conditions, global economic downturns, including those resulting from extraordinary events; changes and volatility in tariffs and trade policies; securities industry risks; interest rate risks; liquidity risks; credit risk with clients and counterparties; risk of liability for errors in clearing functions; systemic risk; systems failures, delays and capacity constraints; network security risks; competition; reliance on external service providers; new laws and regulations affecting our business; net capital requirements; extensive regulation, regulatory uncertainties and legal matters; failure to maintain relationships with employees, customers, business partners or governmental entities; the inability to achieve synergies or to implement integration plans and other consequences associated with risks and uncertainties detailed in Part I, Item 1A – "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2024, ("2024 Form 10-K"), and our other filings with the Securities and Exchange Commission ("SEC"). We caution that the foregoing list of factors is not exclusive, and new factors may emerge, or changes to the foregoing factors may occur, that could impact our business. The forward-looking statements are based upon management's beliefs and assumptions and are made as of the date of this Report. You should not place undue reliance on these forward-looking statements. We undertake no obligation to publicly update or re

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