Q2 2026 BRC Group Holdings Inc Earnings Call

August 6, 2026

Speaker #1: Your line is muted.

Speaker #2: Good afternoon, and welcome to the BRC Group Holdings Q2 2026 earnings conference call. All participants will be in listen-only mode for the duration of the prepared remarks.

Operator: Good afternoon, and welcome to the BRC Group Holdings Q2 2026 Earnings Conference Call. All participants will be in listen-only mode for the duration of the prepared remarks. After the speaker's presentation, there will be a question and answer session. Please note that this event is being recorded. I would now like to turn the conference over to Bryant Riley, chairman, founder, and co-CEO. Mr. Riley, please go ahead.

Speaker #2: After the speaker's presentation, there will be a question-and-answer session. Please note that this event is being recorded. I would now like to turn the conference over to Bryant Riley, Chairman, Founder, and Co-CEO, Mr. Riley.

Speaker #2: Please go ahead.

Speaker #3: Thank you, everyone, for joining us today. Joining me on the call are Tom Kelleher, our Co-CEO, and Scott Yessner, our Chief Financial Officer. This quarter builds on the momentum for our platform.

Bryant Riley: Thank you to everyone for joining us today. Joining me on the call are Tom Kelleher, our co-CEO, and Scott Yessner, our chief financial officer. This quarter builds on the momentum for our platform we have demonstrated over the last 12 months. We reported Q2 net income available to common shareholders of $18.5 million and delivered $66 million in operating adjusted EBITDA, making this our best core operating quarter in nearly 3 years. These results demonstrate the underlying earnings power of our core operating units. Over the trailing 12 months, we generated net income attributable to common shareholders of $404 million and operating adjusted EBITDA of $182 million. Our execution strategy for B. Riley Securities and B. Riley Wealth remains straightforward, deepening client relationships and extending our reach, and we are executing on that front. During the quarter, we added 5 senior producers, including welcoming back B. Riley Securities alumni.

Speaker #3: We have demonstrated over the last 12 months we reported Q2 net income available to common shareholders of $18.5 million and delivered $66 million in operating adjusted EBITDA, making this our best core operating quarter in nearly 3 years.

Speaker #3: These results demonstrate the underlying earnings power of our core operating units. Over the trailing 12 months, we generated net income attributable to common shareholders of $404 million and operating adjusted EBITDA of $182 million.

Bryant Riley: These results demonstrate the underlying earnings power of our core operating units. Over the trailing 12 months, we generated net income attributable to common shareholders of $404 million and operating adjusted EBITDA of $182 million. Our execution strategy for B. Riley Securities and B. Riley Wealth remains straightforward, deepening client relationships and extending our reach, and we are executing on that front. During the quarter, we added 5 senior producers, including welcoming back B. Riley Securities alumni.

Speaker #3: Our execution strategy for B. Riley Securities and B. Riley Wealth remains straightforward. Deepening client relationships and extending our reach. And we are executing on that front.

Speaker #3: During the quarter, we added five senior producers, including welcoming back B. Riley Securities alumni. In my mind, there is no stronger validation of our culture than bringing experienced talent back.

Bryant Riley: In my mind, there's no stronger validation of our culture than bringing experienced talent back. During the quarter, we successfully reactivated several key institutional accounts that have been inactive over the past year, with positive engagement continuing into July. This, combined with higher secondary commission revenues, highlights our continued progress in further strengthening our franchise. Our relationship-driven execution is anchored by our long-tenured sales and trading team, who are traditional idea generators with decades of experience, and our publishing research analysts, who are the caretakers of our brand. In investment banking, favorable markets drove robust overall deal activity. In Q2, we participated in transactions representing $21 billion in aggregate deal value. While larger syndicates in a strong market naturally lower our average economic share per deal, the sheer volume of our participation, anchored by lead mandates, demonstrates our proven execution capabilities and our importance to the issuers.

Speaker #3: During the quarter, we successfully reactivated several key institutional accounts that have been inactive over the past year, with positive engagement continuing into July. This, combined with higher secondary commission During revenues, highlights our continued progress and further strengthening our franchise.

Speaker #3: Our relationship-driven execution is anchored by our long-tenured sales and trading team, who are traditional idea generators with decades of experience, and are publishing research analysts who are the caretakers of our brand.

Bryant Riley: Our relationship-driven execution is anchored by our long-tenured sales and trading team, who are traditional idea generators with decades of experience, and our publishing research analysts, who are the caretakers of our brand. In investment banking, favorable markets drove robust overall deal activity. In Q2, we participated in transactions representing $21 billion in aggregate deal value.

Speaker #3: And in investment banking, favorable markets drove robust overall deal activity. In Q2, we participated in transactions representing $21 billion in aggregate deal syndicates, and a strong market naturally lowered our average economic share per deal. This year, the volume of our participation, anchored by lead mandates, demonstrates our proven execution capabilities and our importance to issuers.

Bryant Riley: While larger syndicates in a strong market naturally lower our average economic share per deal, the sheer volume of our participation, anchored by lead mandates, demonstrates our proven execution capabilities and our importance to the issuers.

Speaker #3: Within that broader deal participation, we supported combined equity and debt issuances, totaling $8.5 billion. And served as an agent on new ATM filings, representing over $12 billion in aggregate value.

Bryant Riley: Within that broader deal participation, we supported combined equity and debt issuances totaling $8.5 billion and served as an agent on new ATM filings representing over $12 billion in aggregate value. We are also seeing our restructuring practice continuing to find meaningful in-court and out-of-court opportunities in this environment. Above all, a value ethos permeates every part of this organization. This is the most evident in our merchant banking approach. We built this firm to execute for the small and mid-cap market and to provide dedicated capital and advice to a space that remains structurally underserved. A core differentiator of our platform is our willingness to actively deploy our balance sheet to solve complex client needs. This includes facilitating structured financing products and driving new originations in our specialty finance direct lending group.

Speaker #3: our restructuring practice continuing to find meaningful in-court and out-of-court opportunities in this environment. Above all, a value ethos permeates every part of this organization.

Speaker #3: This is most evident in our merchant banking approach. We built this firm to execute for the small- and mid-cap market and to provide dedicated capital and advice to a space that remains structurally underserved.

Bryant Riley: We built this firm to execute for the small and mid-cap market and to provide dedicated capital and advice to a space that remains structurally underserved. A core differentiator of our platform is our willingness to actively deploy our balance sheet to solve complex client needs. This includes facilitating structured financing products and driving new originations in our specialty finance direct lending group.

Speaker #3: A core differentiator of our platform is our willingness to actively deploy our balance sheet to solve complex client needs. This We are also seeing includes facilitating structured financing products and driving new originations in our specialty finance direct lending group.

Speaker #3: We operate on the fundamental view that if we are not willing to commit our own capital alongside our clients, we cannot ask the same of our partners.

Bryant Riley: We operate on a fundamental view that if we are not willing to commit our own capital alongside our clients, we cannot ask the same of our partners. To that end, our cash and investment positions provide us flexibility to pursue opportunities in front of us, and our pipeline of actionable opportunities is substantial. Importantly, we have the capital base and partnerships to support our clients as those opportunities develop. Taken together, our Q2 performance, as well as our trailing 12-month results, are the same as what we have done since our firm's formation nearly 30 years ago, operating as idea generators and serving as trusted advisors to our clients. Our platform is performing as designed, and the alignment continues to drive our results today.

Speaker #3: To that end, our cash and investment positions provide us flexibility to pursue the opportunities in front of us, and our pipeline of actionable opportunities is substantial.

Speaker #3: Importantly, we have the capital base and partnerships to support our clients as those opportunities develop. Taken together, our Q2 performance, as well as our trailing 12-month results, are the same as what we have done since our firm's formation nearly 30 years ago.

Bryant Riley: Taken together, our Q2 performance, as well as our trailing 12-month results, are the same as what we have done since our firm's formation nearly 30 years ago, operating as idea generators and serving as trusted advisors to our clients. Our platform is performing as designed, and the alignment continues to drive our results today.

Speaker #3: Operating as idea generators and serving as trusted advisors to our clients. Our platform is performing as designed, and the alignment continues to drive our results today.

Speaker #3: Together, this translates to proven deal execution and capital markets, disciplined operating leverage and wealth management, reliable cash conversion within our communications portfolio, and steady operational progress in our consumer products portfolio.

Bryant Riley: Together, this translates to proven deal execution in capital markets, disciplined operating leverage in wealth management, reliable cash conversion within our communications portfolio, and steady operational progress in our consumer products portfolio. Our focus remains firmly on execution and disciplined capital allocation to deliver for our colleagues, clients, partners, and shareholders. As we look ahead, we believe we have the optionality and the discipline to maximize value, and we will work diligently to execute on all fronts. With that, I will now turn the call over to our CFO, Scott Yessner, to provide a detailed review of our financial performance. Scott?

Speaker #3: Our focus remains firmly on execution and disciplined capital allocation to deliver for our colleagues, clients, partners, and shareholders. As we look ahead, we believe we have the optionality and the discipline to maximize value, and we will work diligently to execute on all fronts.

Bryant Riley: Our focus remains firmly on execution and disciplined capital allocation to deliver for our colleagues, clients, partners, and shareholders. As we look ahead, we believe we have the optionality and the discipline to maximize value, and we will work diligently to execute on all fronts. With that, I will now turn the call over to our CFO, Scott Yessner, to provide a detailed review of our financial performance. Scott?

Speaker #3: With that, I'll now turn the call over to our CFO, Scott Yessner, to provide a detailed review of our financial performance. Scott?

Speaker #4: Thanks, Bryant. I'll share an update on our Q2 and Q1 2026 financial performance segment earnings, investment holdings, capital, and liquidity. Please refer to our earnings press release for the reconciliation tables and descriptions of non-gap calculations in my remarks.

Scott Yessner: Thanks, Bryant. I will share an update on our Q2 and H1 2026 financial performance, segment earnings, investment holdings, capital, and liquidity. Please refer to our earnings press release for the reconciliation tables and descriptions of non-GAAP calculations in my remarks, including an updated calculation and description to our operating adjusted EBITDA non-GAAP measurement. To start, I would like to walk through our financial performance for the Q2 and H1 of 2026. For the Q2, total revenues were $239 million, an increase of $14 million year over year. Included in total revenues was service and fee revenue of $174 million, which increased $27.8 million year over year, further comprised of increases of $5.7 million in investment banking and brokerage fees and of $30 million in management fees from carried interest in funds that own SpaceX. Partially offset by $5.8 million in lower telecom and other revenues.

Speaker #4: Including an updated calculation and description to our operating adjusted EBITDA, non-gap measurement. To start, I would like to walk through our financial performance for Q2 and Q1 of 2026.

Speaker #4: For Q2, total revenues were $239 million, an increase of $14 million year over year. Included in total revenues was service and fee revenue of $174 million, which increased $27.8 million year over year, further comprised of increases of $5.7 million in investment banking and brokerage fees, and of $30 million in management fees from carried interest in funds that owned SpaceX.

Scott Yessner: For the Q2, total revenues were $239 million, an increase of $14 million year over year. Included in total revenues was service and fee revenue of $174 million, which increased $27.8 million year over year, further comprised of increases of $5.7 million in investment banking and brokerage fees and of $30 million in management fees from carried interest in funds that own SpaceX. Partially offset by $5.8 million in lower telecom and other revenues.

Speaker #4: Partially offset by $5.8 million in lowered telecom and other revenues. Trading gains in Q2 were $12.9 million, lowered by $14.8 million year over year, primarily due to a lower fair value on the Babcock and Wilcox investment.

Scott Yessner: Trading gains in Q2 were $12.9 million, lower by $14.8 million year-over-year, primarily due to a lower fair value on the Babcock & Wilcox investment. H1 total revenues were $591 million, an increase of $180 million year-over-year. The increase in H1 total revenues was driven by higher trading gains of $146 million, primarily due to higher trading gains on Babcock & Wilcox investment of $131 million, and by a $21 million increase in service and fee income, which is further comprised of increases of $15 million in investment banking and brokerage fees, and of $36 million in SpaceX carried interest management fees, partially offset by $10 million in lower revenues from exited businesses and $12 million lower telecom and other fees. Q2 total operating expenses declined $13.6 million to $201 million.

Speaker #4: Month total revenues were $591 million, an increase of $180 million year over year. The increase in Q1 total revenues was driven by higher trading gains of $146 million, primarily due to higher trading gains on Babcock and Wilcox investment of $131 million, and by a $21 million increase in service and fee income which has further comprised of increases of $15 million in investment banking and brokerage fees, and a $36 million in SpaceX carried interest management fees, partially offset by $10 million in lowered revenues from exited businesses and $12 million lowered telecom and other fees.

Scott Yessner: The increase in H1 total revenues was driven by higher trading gains of $146 million, primarily due to higher trading gains on Babcock & Wilcox investment of $131 million, and by a $21 million increase in service and fee income, which is further comprised of increases of $15 million in investment banking and brokerage fees, and of $36 million in SpaceX carried interest management fees, partially offset by $10 million in lower revenues from exited businesses and $12 million lower telecom and other fees. Q2 total operating expenses declined $13.6 million to $201 million.

Speaker #4: Next, Q2 total operating expenses declined $13.6 million, to $201 million. The reduction was due to lower SG&A costs across occupancy legal and other expenses of $9 million, lower cost of goods sold and services of $7.6 million from lowered telecom sales, and lower consumer product cost of goods sold.

Scott Yessner: The reduction was due to lower SG&A costs across occupancy, legal, and other expenses of $9 million, lower cost of goods sold in services of $7.6 million from lower telecom sales, and lower consumer product cost of goods sold. H1 total operating expenses declined $62 million to $400 million for H1. The reduction was driven by lower SG&A costs across occupancy, legal, and other expenses of $29 million. Lower cost of goods sold and services of $9.3 million from telecom, $9.6 million from exited businesses, and $3.2 million from consumer products. Included in our Q2 and H1 results are restructuring charges related to the contemplated B. Riley Securities and Wealth combination of $1.9 million. Continuing down the income statement, Q2 other income excluding interest expense was $8 million, compared to $88 million in Q2 2025.

Speaker #4: Q1 total operating expenses declined $62 million, to $400 million, for Q1. The reduction was driven by lower SG&A costs across occupancy legal and other expenses of $29 million, lower cost of goods sold and services of $9.3 million from telecom, $9.6 million from exited businesses, and $3.2 million from consumer products.

Scott Yessner: Lower cost of goods sold and services of $9.3 million from telecom, $9.6 million from exited businesses, and $3.2 million from consumer products. Included in our Q2 and H1 results are restructuring charges related to the contemplated B. Riley Securities and Wealth combination of $1.9 million. Continuing down the income statement, Q2 other income excluding interest expense was $8 million, compared to $88 million in Q2 2025.

Speaker #4: Included in our Q2 and Q1 results are restructuring charges related to the contemplated B. Riley Securities and Wealth combination of $1.9 million. Continuing down the income statement, Q2 other income excluding interest expense was $8 million, compared to $88 million in Q2 2025.

Scott Yessner: Q2 2025 had $44 million in senior note exchange gains, $26 million in Joann liquidation gains, and $22 million in investment and financial instrument fair value increases comprising the difference year-over-year. H1 other income excluding interest expense was $114 million, driven by a $92 million increase in the B&W investment compared to $156 million H1 2025, which included $86 million in income in the sale and deconsolidation of businesses and $55 million in senior note exchange gains. Interest expense declined $6 million to $18 million in Q2 and declined $16 million to $38 million in H1 year-over-year. The interest expense decline has tracked our total debt reduction of $497 million from 31 December 2024, to the ending balance of $1.277 billion at 30 June 2026.

Speaker #4: Q2 2025 had $44 million in senior note exchange gains, $26 million in JoAnn's liquidation gains, and $22 million in investment and financial instrument fair value increases comprising the difference year over year.

Speaker #4: Q1 other income, excluding interest expense, was $114 million, driven by a $92 million increase in the B&W investment compared to $156 million in Q1 2025.

Speaker #4: Which included $86 million in income in the sale and deconsolidation of businesses, and $55 million in senior note exchange gains. Interest expense, declined $6 million, to $18 million in Q2, and declined $16 million, to $38 million in Q1 year over year.

Scott Yessner: Interest expense declined $6 million to $18 million in Q2 and declined $16 million to $38 million in H1 year-over-year. The interest expense decline has tracked our total debt reduction of $497 million from 31 December 2024, to the ending balance of $1.277 billion at 30 June 2026.

Speaker #4: The interest expense decline has tracked our total debt reduction of $497 million from December 31, 2024, to the ending balance of $1.277 billion at June 30, 2026.

Speaker #4: And concluding, the remaining difference in Q2 and Q1 year over year financial performance was $69 million and $73 million from income of a discontinued Glass-Ratner operation booked in 2025.

Scott Yessner: Concluding, the remaining difference in the Q2 and H1 year-over-year financial performance was $69 million and $73 million from income of a discontinued GlassRatner operation booked in 2025. These details culminate with Q2 2026 net income attributable to common shares of $19 million, diluted income per share of $0.45 per share, adjusted EBITDA of $61 million, and adjusted operating EBITDA of $66 million. In H1 2026, net income of $230 million with diluted income per share of $6.47. Adjusted EBITDA was $323 million and adjusted operating EBITDA of $100 million. I'll review our segment operating performance. Please note our former Communications segment has been separated into four reportable segments, which we aggregate and describe as the Communications Business Group. The Capital Market segment, which is comprised solely of B.

Speaker #4: These details culminate with Q2 2026 net income attributable to common shares of $19 million, diluted income per share of $45 cents per share, adjusted EBITDA of $61 million, and adjusted operating EBITDA of $66 million.

Speaker #4: And in Q1 2026, net income of $230 million with diluted income per share of $6.47, adjusted EBITDA was $323 million, and adjusted operating EBITDA of $100 million.

Scott Yessner: Adjusted EBITDA was $323 million and adjusted operating EBITDA of $100 million. I'll review our segment operating performance. Please note our former Communications segment has been separated into four reportable segments, which we aggregate and describe as the Communications Business Group. The Capital Market segment, which is comprised solely of B.

Speaker #4: Next, I'll review our segment operating performance. Please note our former Communications segment has been separated into four reportable segments, which we aggregate and describe as the Communications Business Group.

Speaker #4: The capital market segment, which is comprised solely of B. Riley Securities, had revenues of $54 million and income of $13 million, in Q2, and revenues of $226 million and income of $150 million in Q1 2026.

Scott Yessner: B. Riley Securities had revenues of $54 million and income of $13 million in Q2, and revenues of $226 million and income of $150 million in H1 2026. Segment revenue and income for H1 have been driven by a $22 million increase in investment banking and capital markets service and fee income and $136 million in trading gains, primarily from the Babcock & Wilcox investment in H1 2026. The Wealth segment had revenues of $58 million and income of $18 million in Q2, and revenues of $110 million and income of $34 million in H1 2026. The H1 2026 revenue and profit increases were driven by a $26.4 million increase in the market value of carried interest in a fund that owns SpaceX and an $18 million increase in trading income.

Speaker #4: Segment revenue and income for Q1 have been driven by a $22 million increase in investment banking and capital markets service and fee income, and $136 million in trading gains primarily from the Babcock and Wilcox investment in Q1 2026.

Speaker #4: Next, the wealth segment had revenues of $58 million and income of $18 million, in Q2, and revenues of $110 million and income of $34 million in Q1 2026.

Scott Yessner: The Wealth segment had revenues of $58 million and income of $18 million in Q2, and revenues of $110 million and income of $34 million in H1 2026. The H1 2026 revenue and profit increases were driven by a $26.4 million increase in the market value of carried interest in a fund that owns SpaceX and an $18 million increase in trading income.

Speaker #4: Q1 2026 revenue and profit increases were driven by a $26.4 million increase in the market value of carried interest in a fund that owns SpaceX, and an $18 million increase in trading income.

Speaker #4: The wealth segment ended Q2 with $12 billion in assets under management and $184 million in financial advice. The Communications business group had aggregate revenues of $58 million and income of $14 million in Q2, and revenues of $118 million and income of $27 million in Q1.

Scott Yessner: The Wealth segment ended Q2 with $12 billion in assets under management and 184 financial advisors. The Communications business group had aggregate revenues of $58 million and income of $14 million in Q2, and revenues of $118 million and income of $27 million in H1. H1 income increased $4.6 million despite a $9 million revenue reduction. Targus, our consumer product segment, had revenues of $44 million and a loss of $6 million in Q2, and revenues of $88 million and a loss of $8 million in H1 2026. Revenues are $2 million higher in H1 year-over-year. I'd like to provide an update on the company's investment holdings portfolio, which is reported on our balance sheet in securities and other investments, loans receivable at fair value, and equity investments.

Speaker #4: Q1 income increased by $4.6 million, despite a $9 million reduction in revenue. Targus, our consumer product segment, had revenues of $44 million and a loss of $6 million in Q2, and revenues of $88 million and a loss of $8 million in Q1 2026.

Scott Yessner: Targus, our consumer product segment, had revenues of $44 million and a loss of $6 million in Q2, and revenues of $88 million and a loss of $8 million in H1 2026. Revenues are $2 million higher in H1 year-over-year. I'd like to provide an update on the company's investment holdings portfolio, which is reported on our balance sheet in securities and other investments, loans receivable at fair value, and equity investments.

Speaker #4: Revenues are $2 million higher in Q1 year over year. Next, I'd like to provide an update on the companies' investment holdings portfolio. Which is reported on our balance sheet in Securities and Other Investments, Loans Receivable at Fair Value, and Equity Investments.

Speaker #4: Investments are held across consolidating, as we're evaluating changes. They are apparently booked as revenue in either trading gains or losses, or realized or unrealized gains and losses.

Scott Yessner: Investments are held across consolidating entities where valuation changes are primarily booked as revenue in either trading gains or losses, or realized or unrealized gains and losses. At 30 June 2026, securities and other investments increased $277 million to $724 million from 31 December 2025. The increase was primarily driven by a $213 million fair value increase in the Babcock & Wilcox investment and a $43 million increase in partnership interest related to our marked value of carried interest in funds that own SpaceX for all the BRC entities with portfolio trades and fair value changes comprising the remainder of the 6-month increase. Loan receivables at fair value increased $12 million in Q2 to an ending balance of $39 million at 30 June 2026. In the quarter, lending activity included approximately $24 million in new fundings.

Speaker #4: At June 30, 2026, Securities and Other Investments increased by $277 million to $724 million from December 31, 2025. The increase was primarily driven by a $213 million fair value increase in the Babcock & Wilcox investment, and a $43 million increase in partnership interest related to our marked value of carried interest in funds that own SpaceX. For all the BRC entities, portfolio trades and fair value changes comprised the remainder of the six-month increase.

Scott Yessner: The increase was primarily driven by a $213 million fair value increase in the Babcock & Wilcox investment and a $43 million increase in partnership interest related to our marked value of carried interest in funds that own SpaceX for all the BRC entities with portfolio trades and fair value changes comprising the remainder of the 6-month increase. Loan receivables at fair value increased $12 million in Q2 to an ending balance of $39 million at 30 June 2026. In the quarter, lending activity included approximately $24 million in new fundings.

Speaker #4: Continuing with investment holdings, Loan Receivables at Fair Value increased $12 million in Q2 to an ending balance of $39 million, at $630, 2026. In the quarter, lending activity included approximately $24 million in new fundings, additionally received a $1.9 million loan recovery recognized through the income statement in the fair value adjustments on loans.

Scott Yessner: We received a $1.9 million loan recovery recognized through the income statement and the fair value adjustment on loans. Equity method investments were $85 million at 30 June, a decline of $5.6 million from 31 December. The Great Elm Group investment comprises 77.89 of the 30 June balance, with a decline of $5.5 million due to lower seasonal income and retaining cash in lieu of distribution to equity holders. I'll provide an update on our liquidity and capital. At 30 June 2026, cash equivalents, and restricted cash had a total balance of $156 million compared to $229 million at 31 December 2025. In Q2 2026, B. Riley Financial, Inc. reduced debt by $22 million, which included $33 million of bond exchanges with a net $11 million increase in working capital borrowings.

Speaker #4: And concluding the investment holdings, Equity method investments were $85 million at June 30. A decline of 5.6 million from December 31. The GA Group investment comprises $77.8 million of the June 30 balance, with a decline of 5.5 million due to lower seasonal income and retaining cash in lieu of distribution to equity holders.

Speaker #4: Next, I'll provide an update on our liquidity and capital. At June 30, 2026, cash, cash equivalents, and restricted cash had a total balance of $156 million, compared to $229 million at December 31, 2025.

Scott Yessner: At 30 June 2026, cash equivalents, and restricted cash had a total balance of $156 million compared to $229 million at 31 December 2025. In Q2 2026, B. Riley Financial, Inc. reduced debt by $22 million, which included $33 million of bond exchanges with a net $11 million increase in working capital borrowings.

Speaker #4: In Q2 2026, B. Riley Corporation reduced debt by $22 million, which included $33 million of bond exchanges, with a net $11 million increase in working capital borrowings.

Speaker #4: At June 30, total debt was $1.3 billion, and net debt declined $87 million to $285 million. For the remainder of 2026, the company has two senior note serieses maturing, $142 million in principal amount of Riley N.

Scott Yessner: At 30 June, total debt was $1.3 billion, and net debt declined $87 million to $285 million. For the remainder of 2026, the company has two senior note series maturing, $142 million in principal amount of RILYN senior notes due 30 September, and $164 million in principal amount of RILYG senior notes due on 31 December. We also have $4.5 million in scheduled paydowns on a subsidiary lending facility. We will continue to use capital actions, cash generated from operations, and investment liquidations to fund market opportunities and operating companies while also redeeming the scheduled senior note paydowns. We've had a very strong Q2 and H1 of 2026. I'll turn the call over to Tom Kelleher, Co-Chief Executive Officer.

Speaker #4: senior notes due September 30, and $164 million in principal amount of Riley G. senior notes due on December 31. We also have $4.5 million in scheduled pay downs on a subsidiary lending facility.

Speaker #4: We will continue to use capital actions, cash generated from operations, and investment liquidations to fund market opportunities and operating companies, while also redeeming the scheduled senior note pay downs.

Scott Yessner: We will continue to use capital actions, cash generated from operations, and investment liquidations to fund market opportunities and operating companies while also redeeming the scheduled senior note paydowns. We've had a very strong Q2 and H1 of 2026. I'll turn the call over to Tom Kelleher, Co-Chief Executive Officer.

Speaker #4: We've had a very strong Q2 and Q1 2026. I'll turn the call over to Tom Kelleher, Co-Chief Executive Officer.

Speaker #2: Thanks, Scott. Our Q2 operational performance underscores the strength of our diversified platform and our deliberate execution across key segments. In capital markets, this quarter validated the strategy Bryant described.

Tom Kelleher: Thanks, Scott. Our Q2 operational performance underscores the strength of our diversified platform and our deliberate execution across key segments. In capital markets, this quarter validated the strategy Bryant described. A meaningful driver was the client-initiated reactivation of several key trading accounts, which contributed to secondary flow. Talent, both newly recruited and internally developed, remains the engine of our execution. Our recruiting pipeline is active, with multiple conversations underway with senior bankers and institutional sales professionals. We are also seeing a strong influx of senior producers interested in returning to the platform. These are professionals who know our culture, have watched our operational turnaround, and are choosing to rejoin. Operationally, what those returns give us is an immediate capacity. Seasoned veterans who need no ramp, arriving with relationships intact, widening our coverage across products and sectors from day one.

Speaker #2: A meaningful driver was the client-initiated reactivation of several key trading accounts, which contributed to secondary flow. Talent, both newly recruited and internally developed, remains the engine of our execution.

Speaker #2: Our recruiting pipeline is active, with multiple conversations underway with senior bankers and institutional sales professionals. We are also seeing a strong influx of senior producers interested in returning to the platform.

Tom Kelleher: Our recruiting pipeline is active, with multiple conversations underway with senior bankers and institutional sales professionals. We are also seeing a strong influx of senior producers interested in returning to the platform. These are professionals who know our culture, have watched our operational turnaround, and are choosing to rejoin. Operationally, what those returns give us is an immediate capacity. Seasoned veterans who need no ramp, arriving with relationships intact, widening our coverage across products and sectors from day one.

Speaker #2: These are professionals who know our culture, have watched our operational turnaround, and are choosing to rejoin. Operationally, what those returns give us is an immediate capacity, seasoned veterans who need no ramp, arriving with relationships intact, and widening our coverage across products and sectors from day one.

Speaker #2: In investment banking, equity and debt capital market activity increased year over year, particularly in small and mid-cap issuance. Our ATM franchise has re-accelerated, with ATM fees more than doubling sequentially.

Tom Kelleher: In investment banking, equity and debt capital market activity increased year-over-year, particularly in small and mid-cap issuance. Our ATM franchise has re-accelerated with ATM fees more than doubling sequentially. Increasingly, issuers are electing us to lead market equity rather than simply support it, and our follow-on conversion rate improved. We continue to see distinct pockets of strength in AI data center infrastructure, power, and BDC capital raising. Our recent financing deal in the AI data center space demonstrated B. Riley Securities' capabilities as a provider in AI infrastructure, and the forward pipeline we are seeing here is substantial. Our specialty financing direct lending practice continues to broaden its footprint with existing clients, allowing us to serve them across the full capital life cycle. Finally, our ability to convene the market remains a core differentiator.

Speaker #2: Increasingly, issuers are electing us to lead market equity rather than simply support it, and our follow-on conversion rate improved. We continue to see distinct pockets of strength in AI data center infrastructure, power, and BDC capital raising.

Speaker #2: Our recent financing deal in the AI data center space demonstrated B. Riley Securities' capabilities as a provider in AI infrastructure, and the forward pipeline we are seeing here is substantial.

Tom Kelleher: Our recent financing deal in the AI data center space demonstrated B. Riley Securities' capabilities as a provider in AI infrastructure, and the forward pipeline we are seeing here is substantial. Our specialty financing direct lending practice continues to broaden its footprint with existing clients, allowing us to serve them across the full capital life cycle. Finally, our ability to convene the market remains a core differentiator.

Speaker #2: Our specialty financing direct lending practice continues to broaden its footprint with existing clients, allowing us to serve them across the full capital lifecycle. Finally, our ability to convene the market remains a core differentiator.

Speaker #2: In May, our 26th annual institutional investor conference in Marina del Rey brought issuers and investors together around nearly 180 companies, alongside our 15th Big Fighters, Big Cause charity boxing gala with the Sugar Ray Leonard Foundation.

Tom Kelleher: In May, our 26th annual Institutional Investor Conference in Marina del Rey brought issuers and investors together around nearly 180 companies alongside our 15th Big Fighters, Big Cause charity boxing gala with the Sugar Ray Leonard Foundation. We also look forward to creating further connections for our institutional partners at our Consumer & TMT Conference in New York in September and our annual Convergence Conference in December. In wealth management, while a meaningful part of the H1 improvement reflected investment and carried interest activity, we have also stabilized the platform and permanently reset its cost base. The structural work is what positions the reoccurring fee-based business to grow more profitably from here. Operationally, we have delivered structural cost savings by completing key back-office integrations between B. Riley Securities and B. Riley Wealth, consolidating our accounting, finance, and in-market teams, executing a comprehensive firm-wide vendor rationalization.

Speaker #2: We also look forward to creating further connections for our institutional partners at our consumer TMT conference in New York in September, and our annual convergence conference in December.

Speaker #2: In wealth management, while a meaningful part of the first half improvement reflected investment and carried interest activity, we've also stabilized the platform and permanently reset its cost base.

Tom Kelleher: In wealth management, while a meaningful part of the H1 improvement reflected investment and carried interest activity, we have also stabilized the platform and permanently reset its cost base. The structural work is what positions the reoccurring fee-based business to grow more profitably from here. Operationally, we have delivered structural cost savings by completing key back-office integrations between B. Riley Securities and B. Riley Wealth, consolidating our accounting, finance, and in-market teams, executing a comprehensive firm-wide vendor rationalization.

Speaker #2: The structural work is what positions the reoccurring fee-based business to grow more profitably from here. Operationally, we have delivered structural cost savings by completing key back-office integrations between B.

Speaker #2: Riley Securities and B. Riley Wealth, consolidating our accounting, finance, and in-market teams, and executing a comprehensive firm-wide vendor rationalization. More broadly, across both organizations, we are executing a dedicated AI build-out for our teams, integrating AI tools across the platform and back-office to lift producer productivity and streamline daily workflows.

Tom Kelleher: More broadly, across both organizations, we are executing a dedicated AI build-out for our teams, integrating AI tools across the platform and back office to lift producer productivity and streamline daily workflows. In our communications business group, which includes Lingo, MagicJack, Marconi Wireless, and United Online, the portfolio continues to prove itself as a reliable engine of cash generation. Segment income grew nicely year-over-year despite a slight top-line decline in line with expected natural customer attrition. On a combined basis, the group came in ahead of budget for the quarter, driven by operational efficiencies across all units, and we expect the full year 2026 to finish ahead of budget. To provide some historical context, our communications portfolio began in mid-2016 with the acquisition of United Online. Our thesis was simple: buy mature, late-stage companies with predictable revenues, strong gross margins, and the potential for high cash flows.

Speaker #2: In our Communications business group, which includes Lingo, MagicJack, Marconi Wireless, and United Online, the portfolio continues to prove itself as a reliable engine of cash generation.

Speaker #2: Segment income grew nicely year over year, despite a slight top-line decline, in line with expected natural customer attrition. On a combined basis, the group came in ahead of budget for the quarter, driven by operational efficiencies across all units, and we expect the full year 2026 to finish ahead of budget.

Tom Kelleher: On a combined basis, the group came in ahead of budget for the quarter, driven by operational efficiencies across all units, and we expect the full year 2026 to finish ahead of budget. To provide some historical context, our communications portfolio began in mid-2016 with the acquisition of United Online. Our thesis was simple: buy mature, late-stage companies with predictable revenues, strong gross margins, and the potential for high cash flows.

Speaker #2: To provide some historical context, our communications portfolio began in mid-2016 with the acquisition of United Online. Our thesis was simple: by mature late-stage companies with predictable revenues, strong gross margins, and the potential for high cash flows.

Speaker #2: Through our selective approach and strict operational oversight, this group is delivered. Between United Online, Magic Jack, Marconi, Bullseye, and Lingo, we have generated over $1.5 billion in revenue and approximately $300 million in operating income since 2018.

Tom Kelleher: Through our selective approach and strict operational oversight, this group has delivered. Between United Online, MagicJack, Marconi, Bullseye, and Lingo, we have generated over $1.5 billion in revenue and approximately $300 million in operating income since 2018. A significant achievement considering the combined total enterprise value at acquisition was just under $280 million. Our communications group's operations remain lean, highly efficient, and continue to generate highly predictable cash flows, and we continue to look for companies with similar characteristics that can leverage our operational capabilities. Meanwhile, our B2B telecom businesses in the unified communication space remain stable and provide a natural platform for rolling up complementary assets where substantial cost synergies can be realized. Across the group, we generate over $200 million in annual revenues, giving us a meaningful scale to build from.

Speaker #2: A significant achievement considering the combined total enterprise value at acquisition was just under $280 million. Our communications group's operations remain lean, highly efficient, and continue to generate highly predictable cash flows, and we continue to look for companies with similar characteristics that can leverage our operational capabilities.

Tom Kelleher: Our communications group's operations remain lean, highly efficient, and continue to generate highly predictable cash flows, and we continue to look for companies with similar characteristics that can leverage our operational capabilities. Meanwhile, our B2B telecom businesses in the unified communication space remain stable and provide a natural platform for rolling up complementary assets where substantial cost synergies can be realized. Across the group, we generate over $200 million in annual revenues, giving us a meaningful scale to build from.

Speaker #2: Meanwhile, our B2B telecom businesses in the unified communication space remain stable and provide a natural platform for rolling up complementary assets where substantial cost synergies can be realized.

Speaker #2: Across the group, we generate over $200 million in annual revenues, giving us a meaningful scale to build from. Finally, in our consumer product segment, which is primarily Targus, we saw targeted distribution channel improvements that helped narrow our segment loss over the first half.

Tom Kelleher: Finally, in our consumer products segment, which is primarily Targus, we saw targeted distribution channel improvements that helped narrow our segment loss over the H1. We are also taking deliberate action on the cost side, streamlining operations and reducing structural expense to strengthen the underlying business. We remain highly focused on optimizing the long-term value of this asset. Overall, our business segments are execution-focused, generating strong cash flow, and are well-positioned for the H2 of 2026. Before we open the line, I want to take a moment to directly thank our colleagues. The underlying strength of this platform is a direct reflection of your hard work, resilience, and your unwavering dedication to our clients, both internal and external. You are the engine of this firm, and your efforts are what make our success possible. I will now hand the call back to open the line for questions.

Speaker #2: We are also taking deliberate action on the cost side, streamlining operations and reducing structural expense to strengthen the underlying business. We remain highly focused on optimizing long-term value of this

Speaker #1: This asset . Overall , our business segments are execution focused , generating strong cash flow and are well positioned for the second half of 2026 .

Tom Kelleher: Overall, our business segments are execution-focused, generating strong cash flow, and are well-positioned for the H2 of 2026. Before we open the line, I want to take a moment to directly thank our colleagues. The underlying strength of this platform is a direct reflection of your hard work, resilience, and your unwavering dedication to our clients, both internal and external. You are the engine of this firm, and your efforts are what make our success possible. I will now hand the call back to open the line for questions.

Speaker #1: Before we open the line , I want to take a moment to directly thank our colleagues . The underlying strength of this platform is a direct reflection of your hard work , resilience and your unwavering dedication to our clients , both internal and external .

Speaker #1: You are the engine of this firm and your efforts are what make our success possible I will now hand the call back to open the line for questions .

Speaker #2: Thank you . At this time , we will conduct a question and answer session . If you would like to ask a question , please press star one on your telephone keypad .

Tom Kelleher: Thank you. At this time, we will conduct a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad to enter the queue. Once again, if you'd like to ask a question, please press star one on your telephone keypad. We will pause here briefly. Our first question is from Kirk with Raymond James. Please go ahead.

Operator: Thank you. At this time, we will conduct a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad to enter the queue. Once again, if you'd like to ask a question, please press star one on your telephone keypad. We will pause here briefly. Our first question is from Kirk with Raymond James. Please go ahead.

Speaker #2: To enter the queue Once again , if you'd like to ask a question , please press star one on your telephone keypad . We'll pause here briefly Our first question is from Kirk with Raymond James Please go ahead

Speaker #3: Hello , Bryant . Tom Scott , thank you for the call . And congratulations on the quarter Just , you know , obviously the the , you know , the I mean , we'd all like to hear more about how you plan to address the the 2026 maturities .

[Analyst] (Raymond James): Hello, Bryant, Tom, Scott. Thank you for the call.

Tom Kelleher: Hi.

[Analyst] (Raymond James): Congratulations on the quarters. Obviously, we'd all like to hear more about how you plan to address the 2026 maturities. I think Scott mentioned that asset sales may be part of the solution. Curious if there are any other levers you plan to pull, like exchanges, equity offerings. Anything you can share on that front would be helpful.

Speaker #3: I think Scott mentioned that asset sales may be part of the solution . And curious if there are any other levers you plan to pull like exchanges , you know , equity offerings , anything , anything you can share on that front would be helpful

Speaker #4: Thanks , thanks . Thanks for the question , Scott . Why don't you take this one ? I'll follow up . If I have anything to add

Tom Kelleher: Thanks. Thanks, Kirk. Thanks for the question. Scott, why don't you take this one? I'll follow up if I have anything to add.

Speaker #5: Great . Thank you so much , Kirk , for joining the call . And your question ? Yeah . I think the way we think about it is , is creating optionality and options to fund our business .

Scott Yessner: Great. Thank you so much, Kirk, for joining the call and your question. Yeah, I think the way we think about it is creating optionality and options to fund our business and to pay down some of those debts. While we don't have an explicit set of tactics, we have a number of ways to go about the fundings. We have enough investments in cash to easily fund through the end of the year. The two debt maturities are just over $300 million. We also have to focus our capital towards supporting our investment banking and capital markets businesses. We sort of have in parallel an evaluation of our capital structure to allow our go-forward business and to also pay these down. Looking at our investments in securities, we have $723 million of those securities along with over $150 million of cash, with $300 million due.

Speaker #5: And the paydowns of those debts . And so while we don't have an explicit set of tactics , we have a number of ways to go to go about the fundings .

Speaker #5: We have enough investments in cash to easily fund through the end of the year. The two debt maturities are just over $300 million.

Speaker #5: We also have to focus our our capital towards supporting our investment banking and capital markets businesses . So we sort of have in parallel a re an evaluation of our capital structure to allow our go forward business and to also pay these down .

Scott Yessner: We also have to focus our capital towards supporting our investment banking and capital markets businesses. We sort of have in parallel an evaluation of our capital structure to allow our go-forward business and to also pay these down. Looking at our investments in securities, we have $723 million of those securities along with over $150 million of cash, with $300 million due.

Speaker #5: So looking at our other investments and securities , we have $723 million of of those securities , along with over $150 million of cash , with $300 million due , you know , we can we can clear the bar fairly comfortably on that .

Scott Yessner: We can clear the bar fairly comfortably on that. When we think through how we deploy capital, the bonds are definitely in line of sight, and we have clear plans to make that happen. We're also very much focused on optimizing our operating company's investment portfolio and getting cash deployed to the maximum benefit of our shareholders.

Speaker #5: And so when we think through , you know , how we deploy capital , you the bonds are definitely in line of sight .

Speaker #5: And we have , you know , clear plans to make that happen . But we're also very much focused on optimizing our operating companies investment portfolio and getting cash deployed to the maximum benefit of our shareholders

Speaker #6: Yeah , I think Kirk , that's that's right . I .

Bryant Riley: Yeah, I think, Kirk, that's right. I don't think I have anything else to add. I would just say that when we look at the big picture over the last couple of years, our net debt got as high as $1.2 billion, and as of Q2, at the end of Q2, and obviously positions move up and down, it's $286 million. Our trailing 12 months EBITDA is $180 million. By any metric, those leverage ratios are I think pretty good. Clearly, we have liquid investments. We have some less liquid investments, and we have cash, and we have really good opportunities to put that cash to work. All those things are balanced, but we have no issue on those maturities.

Speaker #4: I don't think I have anything else to add . I would just say that when we look at the big picture over the last couple of years , you know , our net debt got as high as 1.2 billion .

Speaker #4: And as of Q2 at the end of Q2 , and obviously positions move up and down , it's 286 million . And our trailing 12 months EBITDA is 180 million .

Speaker #4: So by any metric , those you know , those leverage ratios are are , you know , I think pretty good Clearly , we have liquid investments .

Bryant Riley: By any metric, those leverage ratios are I think pretty good. Clearly, we have liquid investments. We have some less liquid investments, and we have cash, and we have really good opportunities to put that cash to work. All those things are balanced, but we have no issue on those maturities.

Speaker #4: We have some less liquid investments and , and we have cash and we have really good opportunities to put that cash to work .

Speaker #4: So all those things are balanced . But , you know , we don't we don't we have no issue on those maturities .

Speaker #3: Okay . Thank you . That's that's great to hear So should we be do you expect to address them entirely with with cash and asset sales .

[Analyst] (Raymond James): Okay. Thank you. That's great to hear. Do you expect to address them entirely with cash and asset sales? You're not contemplating an exchange or any capital raises?

Speaker #3: You're not contemplating an exchange or any capital raises.

Speaker #4: Yeah . I mean , I think it would be appropriate . And I've said this on other calls . We we have our playbook .

Bryant Riley: Yeah. I think it would be inappropriate, and I've said this on other calls. We have our playbook. The playbook changes. We live in a very volatile world, and that playbook changes, we're not going to eliminate anything. As a team, we review our assets all the time, and we think through what is the most productive asset to liquidate or where to put our cash. I would tell you that we're going to utilize whatever we think makes sense, and I wouldn't eliminate or over-speculate on any of those things.

Speaker #4: The playbook changes based on we , we , we live in a very volatile world . And that playbook changes . And so we're not going to eliminate anything .

Speaker #4: We're we're going to be , you know , as a team , we review our assets all the time . And we think through what is the most productive asset to , to liquidate or to where to put our cash .

Speaker #4: And so I would tell you that we , you know , we're going to utilize whatever we think makes sense . And I wouldn't eliminate our , our over speculate on any of those things .

Speaker #3: Okay . That's that's helpful . I appreciate it . Move just as a with respect to the capital markets business , you mentioned the pipeline .

[Analyst] (Raymond James): Okay. That's helpful. Appreciate it. With respect to the capital markets business, you mentioned the pipeline. I know you don't provide guidance, but can you maybe elaborate on how the pipeline looked at 30 June versus, say, same time last year or Q1 or any kind of color as to where the pipeline is for the H2 and maybe if you could elaborate on the mix, like what type of business it is?

Speaker #3: I know you don't provide guidance , but can you maybe elaborate on how the pipeline looked at . At June 30th versus , you know , say , same time last year or March quarter or any kind of color as to , you know , where the pipeline is for the back half of the year .

Speaker #3: And maybe if you could elaborate on the mix, like what type of business it is.

Speaker #6: Sure . So

Bryant Riley: Sure. Let me comment a year ago. A year ago, the noise around our business was pretty loud. There were a number of accounts that had turned off, and we were grinding through that. I think our team was fighting with one hand behind their back. That is totally different now. We cited that a little bit in my comments. We are, I think, taking a much more aggressive approach. We're seeing a lot more activity. What I've really been excited about is during this whole process, our participation in deals was really high. I think we have a very loyal company base that we've been around for a long time. We did see some market share deterioration, and we're going to get that back.

Speaker #4: Let me comment . A year ago , a year ago , the noise around our business was was pretty loud . There were a number of accounts that had turned off , and we were grinding through that .

Speaker #4: And , you know , I think our team was was fighting with one hand behind their back That is totally different now . We cited that a little bit in my comments .

Speaker #4: We are , I think , taking a much more aggressive approach . We and so we're seeing a lot more activity . What I've really been excited about is during this whole process , our .

Bryant Riley: We are, I think, taking a much more aggressive approach. We're seeing a lot more activity. What I've really been excited about is during this whole process, our participation in deals was really high. I think we have a very loyal company base that we've been around for a long time. We did see some market share deterioration, and we're going to get that back.

Speaker #4: Are participation in deals was , was really high . We have a . I think we have a very loyal company base that we've been around for a long time .

Speaker #4: We did see some market share deterioration and we're going to get that back . We you know , we have a bought deal .

Bryant Riley: We have a bought deal I can't talk about today, but we're using our balance sheet to do a bought deal that we're excited about. We were involved in a $100 million deal yesterday. As you know, this is a little bit of at once business, and then there's whether it's M&A or longer-term deals. I think overall, I can't quantify it for you, so I'll just say qualitatively, I feel a lot better about the backlog and opportunities that we see than we did a year ago, and it's just a testament to our team and to, as we mentioned, we're seeing I don't want to under appreciate the people who've been here throughout this because they've been the most meaningful. We are also seeing really important people coming back, and that combination puts us in a better place.

Speaker #4: I can't talk about today , but , you know , we're using our balance sheet to do a bought deal that we're excited about .

Speaker #4: We're involved in a $100 million deal . Yesterday , we don't , as you know , this is a little bit of at once business .

Speaker #4: And then there's and then there's , you know , whether it's M&A or , or longer term deals . But but I think overall , I , I can't , I can't quantify it for you .

Bryant Riley: I think overall, I can't quantify it for you, so I'll just say qualitatively, I feel a lot better about the backlog and opportunities that we see than we did a year ago, and it's just a testament to our team and to, as we mentioned, we're seeing I don't want to under appreciate the people who've been here throughout this because they've been the most meaningful. We are also seeing really important people coming back, and that combination puts us in a better place.

Speaker #4: So I'll just say qualitatively , I feel a lot better about the backlog and opportunities that we see than we did a year ago .

Speaker #4: And it's just a testament to , to our team and to , as we mentioned , we're seeing some , you know , I don't want to I don't want to underappreciate the people who've been here .

Speaker #4: You know , throughout this because they've , they've been the most meaningful . But we also seeing , you know , really important people coming back .

Speaker #4: And so that combination puts us in a better place

Speaker #3: That's , that's , that's good to hear . Would you would you say that the , the , the sequential trends are look like , you know , if the market remains receptive , our are , you know , you think that they'll continue into the second half .

[Analyst] (Raymond James): That's good to hear. Would you say that the sequential trends look like if the market remains receptive, or you think that they'll continue into the H2?

Speaker #6: But you've you've been .

Bryant Riley: Look, you've been doing this a long time, and I've been doing this a long time, Markets can turn off and on, and it feels like right now, given the environment, can turn off in a week and turn back on in a week, and that's important to us. I think if there's a steady state, then I would feel like we would be higher quarter over quarter. It's awfully hard. When you're dealing with such a macro thing that you cannot control, it's hard. The way that we've always run the business is make sure you run it tight and you make sure that you have really good people, and when the markets are on, you go after it as hard as you can go after it, and the incremental margin of those revenues are meaningful, 50%.

Speaker #4: Doing this a long time and I've been doing this a long time . And markets can turn off and on . And it feels like right now , given the environment can turn off in a week and turn back on in a week .

Speaker #4: And that's important to us . So I would not , I think if there's a steady state that I would feel like we would be higher quarter over quarter .

Speaker #4: But I can't , you know , it's it's awfully hard to , you know , when you're dealing with such a macro thing that you cannot control .

Bryant Riley: It's awfully hard. When you're dealing with such a macro thing that you cannot control, it's hard. The way that we've always run the business is make sure you run it tight and you make sure that you have really good people, and when the markets are on, you go after it as hard as you can go after it, and the incremental margin of those revenues are meaningful, 50%.

Speaker #4: It's hard . So so what our , the way that we've always run the business is make sure you run it tight and you make sure that you have really good people .

Speaker #4: And when the markets are on , you go after it as hard as you can go after it . And the incremental margin of those revenues are meaningful , 50% .

Speaker #4: And that's that's the way we look at it . And , and so it would just be I'd be making things up if I could tell you with any certainty .

Bryant Riley: That's the way we look at it. I'd be making things up if I could tell you with any certainty quarter over quarter. I will say that I feel every quarter over the last two years, we are better positioned in the beginning of that quarter than we were the quarter before as we continue to be on a more normalized kind of operations, if that makes sense.

Speaker #4: Quarter over quarter . But I will say that I feel every quarter over the last two years , we are better positioned than the beginning of that quarter than we were the quarter before .

Speaker #4: As we continue , you know , to to be on a more normalized kind of operations , if that makes sense

Speaker #3: Got it . I appreciate it . Thank you . Sounds like sounds all sounds good on the preferred . Are you what ? How are you thinking about the the dividends on the cash Restoring cash dividends on the preferred

[Analyst] (Raymond James): Got it. I appreciate it. Thank you. All sounds good. On the preferred, how are you thinking about restoring cash dividends on the preferred?

Speaker #7: So .

Speaker #4: You know , we are all equity holders and we are all here for the equity you know , to to go as high as we as it deserves to go based on our earnings .

Bryant Riley: We are all equity holders, and we are all here for the equity to go as high as it deserves to go based on our earnings. The preferred is senior to that. We understand that. At this point, I think the best use of our capital are utilizing it for other things. We appreciate that we are behind on those dividends, and we understand that. At this point, we're going to utilize our capital where we think we're just going to have higher returns on that capital for now.

Speaker #4: The preferred is senior to that . So we understand that at this point I think the best the best use of our capital are doing utilizing it for other things .

Speaker #4: We appreciate that . You know , we are behind on those dividends . And we we understand that . But but at this point , we're , you know , we're going to we're going to utilize our capital where we think we're just going to have kind of higher , higher returns on that capital for now

Speaker #3: Okay . Thank you . And then last topic , the principal investments , at least some of them are , are down a bit .

[Analyst] (Raymond James): Okay. Thank you. Last topic. The principal investments, at least some of them are down a bit Q3 to date. Are you hedged in any way on those?

Speaker #3: Third quarter to date . Are you hedged it in any way on those

Speaker #7: No .

Bryant Riley: No.

Speaker #3: Okay . Got it . That's all I have . I appreciate it thank you

[Analyst] (Raymond James): Okay. Got it. That's all I have. I appreciate it. Thank you.

Speaker #4: Okay . Thank you .

Bryant Riley: Okay, thank you.

Speaker #5: Thanks .

Scott Yessner: Thanks, Kirk.

Speaker #2: Thank you Kirk . And once again , ladies and gentlemen , if you'd like to ask a question , please press star one on your telephone keypad to enter the Q Our next question is from This concludes the Q&A .

Scott Yessner: Thank you, Kirk. Once again, ladies and gentlemen, if you'd like to ask a question, please press star one on your telephone keypad to enter the queue. This concludes the Q&A. I'll turn the call back over to management for closing remarks.

Operator: Thank you, Kirk. Once again, ladies and gentlemen, if you'd like to ask a question, please press star one on your telephone keypad to enter the queue. This concludes the Q&A. I'll turn the call back over to management for closing remarks.

Speaker #2: I will turn it the call back over to management for closing remarks

Speaker #7: Great . Well .

Bryant Riley: Great. Well, again, appreciate. I think we laid it out, our appreciation for, number one, all of our partners at the firm. The loyalty of our client base. We appreciate them for really coming back, we're really excited about the quarters to come and look forward to reporting on them. Thank you very much, we'll talk to you in 90 days. Thank you, operator.

Speaker #4: Again , appreciate I think we we we laid it out our appreciation for , you know , number one , all of our partners at the firm , you know , the loyalty of our client base .

Speaker #4: We appreciate them for , you know , really coming back . And we're really excited about the , the quarters to come and look forward to reporting on them .

Speaker #4: So thank you very much . And we'll talk to you in 90 days . Thank you . Operator .

Speaker #2: Thank you . Mr. Riley . Before we conclude today's call , I would like to provide the company's safe harbor statement . Please note that today's call contains forward looking statements within the meaning of the private securities Litigation Reform Act of 1995 .

Bryant Riley: Thank you, Mr. Riley. Before we conclude today's call, I would like to provide the company's Safe Harbor statement. Please note that today's call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and beliefs concerning future developments and their potential effect on the company. Forward-looking statements involve risk and uncertainties, actual results may differ materially from those expressed or implied. We encourage you to review the company's recent filings with the SEC, including the annual report on Form 10-K and quarterly reports on Form 10-Q, for a more detailed discussion of the risk factors that could impact performance. The company assumes no obligation to update any forward-looking statements made during this call, except as required by law. Additionally, non-GAAP financial measures may have been discussed during this call.

Operator: Thank you, Mr. Riley. Before we conclude today's call, I would like to provide the company's Safe Harbor statement. Please note that today's call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and beliefs concerning future developments and their potential effect on the company.

Speaker #2: These statements are based on management's current expectations and beliefs concerning future developments and their potential effect on the company . Forward looking statements involve risks and uncertainties and actual results may differ materially from those expressed or implied .

Operator: Forward-looking statements involve risk and uncertainties, actual results may differ materially from those expressed or implied. We encourage you to review the company's recent filings with the SEC, including the annual report on Form 10-K and quarterly reports on Form 10-Q, for a more detailed discussion of the risk factors that could impact performance. The company assumes no obligation to update any forward-looking statements made during this call, except as required by law. Additionally, non-GAAP financial measures may have been discussed during this call.

Speaker #2: We encourage you to review the company's recent filings with the SEC , including the annual Report on Form 10-K and quarterly reports on Form 10-q .

Bryant Riley: Reconciliations to the most directly comparable GAAP measures are included in the earnings release, which is available on the investor relations section of the BRC Group Holdings website. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Operator: Reconciliations to the most directly comparable GAAP measures are included in the earnings release, which is available on the investor relations section of the BRC Group Holdings website. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Operator: The host has ended this call. Goodbye.

Q2 2026 BRC Group Holdings Inc Earnings Call

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