BRC Group Holdings, Inc. Reports Third Quarter 2026 Financial Results

The GA Group sale and related financing reduced Oaktree term loans to $43.7 million while adding $36.5 million of liquidity.

Rhea-AI Summary

BRC Group Holdings (Nasdaq: RILY) reported a third-quarter net loss available to common shareholders of $243.0 million, driven primarily by investment losses. The loss was $6.04 per diluted share, versus income of $2.91 a year earlier. Revenue fell to $33.0 million from $277.9 million. Results included $226.7 million of pre-tax losses on Babcock & Wilcox and a $14.6 million GA Group impairment.

Nine-month revenue was $624.2 million, with a $13.2 million net loss available to common shareholders. Net debt declined to $562.3 million from $627.0 million at year-end. On November 3, BRC completed its remaining GA Group stake sale for $62.3 million, adding $36.5 million of liquidity net of the closing fee through related transactions. Its pending $203.7 million enterprise-value Sangoma acquisition is expected to close no later than early 2027, subject to shareholder, court and regulatory approvals.

Positive

• Total debt fell to $1.14 billion at September 30, 2026, from $1.43 billion at year-end.
• Net debt declined 10%, or $64.7 million, to $562.3 million from December 31, 2025.
• GA Group sale and related transactions added $36.5 million of liquidity, net of the closing fee.
• Oaktree term loans fell to $43.7 million from $65.6 million after the GA Group transactions.
• Amended Oaktree credit agreement eliminated future prepayment premiums.
• Sangoma acquisition agreement values the business at $203.7 million; BRC expects added Communications scale and recurring revenue.
• Sangoma acquisition has no financing condition and is expected to close no later than early 2027.
• Nine-month operating adjusted EBITDA, an adjusted operating earnings measure, rose to $103.320 million from $93.207 million.
• Other investments excluding Babcock & Wilcox generated $4.8 million net gains in the third quarter.
• Wealth Management nine-month revenue increased to $134.455 million from $128.302 million.
• Wealth Management nine-month segment income increased to $29.767 million from $7.595 million.
• Lingo segment income rose to $4.558 million in Q3 and $13.641 million year-to-date, from $3.964 million and $9.290 million.
• Marconi Wireless segment income rose to $2.736 million in Q3 and $8.810 million year-to-date, from $2.559 million and $6.108 million.
• UOL Q3 segment income rose to $1.700 million from $1.477 million; nine-month income fell to $4.662 million from $4.881 million.
• Communications combined income growth reflected cost reductions that more than offset declining revenue.

Negative

• Q3 net loss available to common shareholders reached $243.018 million, versus $89.068 million income a year earlier.
• Q3 diluted result fell to a $6.04 loss per share from $2.91 income a year earlier.
• Nine-month net loss available to common shareholders was $13.226 million, versus $214.534 million income a year earlier.
• Nine-month diluted result fell to a $0.40 loss per share from $7.02 income a year earlier.
• Q3 revenue fell to $33.028 million from $277.871 million; nine-month revenue fell to $624.205 million from $689.236 million.
• Operating revenue fell to $161.325 million in Q3 and $617.876 million year-to-date, from $244.136 million and $666.014 million.
• Investment results swung to a $128.297 million Q3 loss; nine-month gains fell to $6.329 million from $23.222 million.
• Babcock & Wilcox investment generated $226.7 million of Q3 pre-tax losses; its September 30 value was $160.3 million.
• GA Group investment incurred a $14.6 million non-cash impairment to match its subsequent sale price.
• Adjusted EBITDA, an adjusted earnings measure, fell to negative $219.142 million in Q3 from positive $112.204 million.
• Nine-month adjusted EBITDA fell to $104.259 million from $126.902 million.
• Q3 operating adjusted EBITDA fell to $2.908 million from $54.862 million.
• Q3 operating adjusted EBITDA absorbed a $17.4 million reduction from a financing-gain reversal and SpaceX carried-interest markdown.
• Cash, cash equivalents and restricted cash fell to $145.7 million from $229.3 million at year-end.
• Total investments fell to $408.6 million from $520.5 million at year-end.
• Sangoma financing entails $212.3 million of committed senior secured term loans, creating $140.8 million of incremental subsidiary debt.
• Sangoma acquisition requires expected equity contributions of $54 million: $38 million from BRC and $16 million from telecommunications subsidiaries.
• Sangoma shareholders will receive cash and BRC stock, with expected ownership of approximately 4% of pro forma shares.
• Sangoma acquisition remains subject to Sangoma shareholder, court and regulatory approvals.
• Oaktree amendment added a $26.5 million term loan and a $3.3 million transaction fee paid in kind.
• Capital Markets revenue fell to negative $90.213 million in Q3 from positive $108.732 million.
• Capital Markets nine-month revenue fell to $135.610 million from $172.124 million.
• Capital Markets Q3 segment loss was $120.040 million, versus $54.779 million income; nine-month income fell to $30.313 million from $36.256 million.
• Wealth Management Q3 revenue fell to $24.327 million from $42.403 million.
• Wealth Management Q3 segment result swung to a $3.735 million loss from $7.190 million income.
• Lingo revenue fell to $36.185 million in Q3 and $115.763 million year-to-date, from $39.690 million and $121.150 million.
• magicJack revenue fell to $8.529 million in Q3 and $25.879 million year-to-date, from $9.331 million and $28.909 million.
• magicJack segment income fell to $4.168 million in Q3 and $12.592 million year-to-date, from $4.608 million and $14.314 million.
• Marconi Wireless revenue fell to $7.132 million in Q3 and $22.037 million year-to-date, from $8.128 million and $26.847 million.
• UOL revenue fell to $2.790 million in Q3 and $8.492 million year-to-date, from $3.217 million and $10.137 million.
• Consumer Products revenue fell to $39.255 million in Q3 and $126.907 million year-to-date, from $46.967 million and $132.354 million.
• Consumer Products segment losses widened to $4.345 million in Q3 and $12.678 million year-to-date, from $1.330 million and $12.375 million.

News Explained

If completed, Sangoma sellers would hold about four percent of pro forma shares, while subsidiary debt rises by 140.8 million dollars.

The Sangoma acquisition remains subject to approvals; if completed, sellers would receive cash and BRC Group common stock and are expected to hold about 4% of pro forma shares, while the telecommunications subsidiaries would take on $140.8 million of incremental debt.

Issuing the stock would reduce existing holders’ percentage ownership absent offsetting changes; the release says the acquisition is expected to use $212.3 million of committed senior secured loans, replacing $71.5 million of existing facilities, and has no financing condition.

The completed GA Group sale brought $62.3 million in cash, of which $51.7 million repaid Oaktree term debt; the amended agreement added a $26.5 million term loan in exchange for a $3.3 million fee paid in kind. After these transactions, Oaktree term loans were $43.7 million, down from $65.6 million. Third-quarter Operating Adjusted EBITDA was $2,908 thousand, versus an Adjusted EBITDA loss of $219,142 thousand; under the release’s definitions, the operating measure further excludes investment-related gains and losses.

The company says it will file unaudited pro forma financial information for the GA Group sale by amendment to its Form 8-K no later than November 9, 2026.

Key Figures

Q3 total revenues: $33.0 million Q3 net loss: $(243.0) million Q3 diluted loss per share: $(6.04) +5 more

Q3 total revenues

$33.0 million

Operating revenues were offset by $128.3 million of investment losses

Q3 net loss

$(243.0) million

Available to common shareholders

Q3 diluted loss per share

$(6.04)

Three months ended September 30, 2026

Net debt

$562.3 million

At September 30, 2026; down 10%, or $64.7 million, from December 31, 2025

GA Group sale consideration

$62.3 million

Cash received for the remaining equity interest

Liquidity added

$36.5 million

Net of the closing fee after the GA Group sale and related transactions

Sangoma enterprise value

$203.7 million

Definitive acquisition agreement

Incremental acquisition debt

$140.8 million

At the telecommunications subsidiaries after replacing existing credit facilities

Previous Earnings Reports

1 past event · Latest: Aug 06

Same Type 1 event

1. Aug 06

   Q2 earnings

   24h Move

   -1.1%

   Reported $18.5 million net income, $239.1 million revenue, and positive adjusted EBITDA.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

carried interest, enterprise value, term loan, non-gaap

4 terms

carried interest financial

"net markdown of the SpaceX carried interest"

Carried interest is a share of the profits earned by investment managers from the investments they oversee, serving as their reward for successful performance. It functions like a bonus that motivates managers to maximize returns for investors, similar to earning a commission based on performance. This income is often taxed at a lower rate than regular income, making it a significant aspect of investment compensation.

enterprise value financial

"for a total enterprise value of $203.7 million"

Enterprise value is the total worth of a company, reflecting what it would cost to buy the entire business. It includes the company's market value plus any debts, minus its cash holdings, offering a comprehensive picture of its true value. Investors use it to compare companies regardless of their capital structures, helping them assess how much they would need to pay to acquire the business.

View in glossary

term loan financial

"GA Group sale further reduced Oaktree term-loan indebtedness"

A term loan is a type of loan that is borrowed for a set period of time, with a fixed schedule for repaying the money, usually in regular payments. It matters to investors because it represents a company's borrowing costs and financial stability; reliable repayment of these loans can indicate strong financial health, while difficulties may signal potential risks.

non-gaap financial

"The Company has updated its Operating Adjusted EBITDA calculation"

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

View in glossary

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Completes Sale of Remaining Equity Interest in GA Group

LOS ANGELES, Nov. 5, 2026 /PRNewswire/ -- BRC Group Holdings, Inc. (Nasdaq: RILY) ("BRC Group" or the "Company"), a diversified holding company, today released its financial results for the three and nine months ended September 30, 2026.

Third Quarter and Nine Months Ended September 30, 2026 Highlights and Recent Developments

• Revenues: Year-to-date total revenues of $624.2 million, including Operating Revenues⁽¹⁾ of $617.9 million. Q3 revenues of $33.0 million, as Operating Revenues⁽¹⁾ of $161.3 million were offset by Investment Losses⁽²⁾ of $128.3 million.
• Net Loss: Year-to-date net loss available to common shareholders of $(13.2) million, or $(0.40) per diluted share. Q3 net loss available to common shareholders of $(243.0) million, or $(6.04) per diluted share, primarily reflecting $(226.7) million of pre-tax losses on the Company's investment in Babcock & Wilcox and a $14.6 million non-cash impairment of its investment in GA Group; the Company's other securities positions generated modest net gains.
• Operating Adjusted EBITDA⁽⁴⁾: Year-to-date Operating Adjusted EBITDA of $103.3 million. Q3 Operating Adjusted EBITDA was reduced by $17.4 million, reflecting the reversal of an unrealized gain recognized in Q2 on structured equity financings and a net markdown of the SpaceX carried interest. Adjusted EBITDA⁽³⁾ of $104.3 million year-to-date, and $(219.1) million in Q3.
• Balance Sheet: Fully redeemed $238.1 million of senior notes year-to-date, including $142.1 million in September. Subsequent to quarter end, the GA Group sale further reduced Oaktree term-loan indebtedness.
• Strategic Actions: Sold its remaining interest in GA Group to affiliates of Oaktree, reducing debt and adding liquidity (November 3); restored 100% ownership of B. Riley Securities Holdings (October 22); and entered into a definitive agreement to acquire Sangoma Technologies to scale its Communications platform (September 28).

Bryant Riley, Chairman and Co-Chief Executive Officer, commented:
"Through the first nine months of the year, our operating businesses demonstrated the resilience of our diversified platform, despite third-quarter declines in the value of our investment portfolio. Over the past several months, we have taken key strategic actions to strengthen our core franchises and allocate capital toward our strongest near-term cash flow opportunities. Earlier this week, we completed the sale of our remaining interest in GA Group. This legacy business generated significant value for our shareholders over more than a decade, and its sale sharpens our strategic focus, reduces debt, and enhances liquidity, supporting our operating businesses and a long-term approach to our investments through market dislocations. Consistent with that focus, we agreed to acquire Sangoma, a business with predictable cash flows that will bring meaningful scale and recurring revenue to our Communications platform and is highly complementary to our existing operations, creating opportunities for operating synergies. We also restored full ownership of B. Riley Securities and continue to advance its integration with B. Riley Wealth."

"The third quarter was a challenging period for small- and mid-cap issuers, as rising rates and wider credit spreads weighed on transaction activity and equity capital markets issuance concentrated in the largest issuers. Against that backdrop, B. Riley Securities and B. Riley Wealth remain focused on delivering for all of our clients and partners. Whether that is helping navigate dislocation, creating capital markets opportunities, or providing strategic advisory, our platform is built to support our clients across every cycle. Even as smaller average deal sizes tempered underwriting fee revenue in the quarter, we saw rising demand for our restructuring and advisory services, added two senior bankers, and expanded institutional research coverage to more than 430 companies. Across our segments, we benefited from expanding recurring advisory fees in Wealth Management and growing income in our Communications portfolio, while we remain focused on improving margins and profitability in Consumer Products."

"We enter year-end with an active pipeline across equity, debt, and M&A advisory, and look forward to showcasing the full capabilities of our platform at our upcoming Convergence Conference in December."

Third Quarter and Nine Months Ended September 30, 2026 Financial Summary

		Three Months Ended September 30,				Nine Months Ended September 30,
	(Dollars in thousands, except for per share data)	2026		2025		2026		2025
	Net (loss) income available to common shareholders	$    (243,018)		$        89,068		$      (13,226)		$     214,534
	Basic (loss) income per common share	$          (6.04)		$           2.91		$          (0.36)		$           7.02
	Diluted (loss) income per common share	$          (6.04)		$           2.91		$          (0.40)		$           7.02

		Three Months Ended September 30,				Nine Months Ended September 30,
	(Dollars in thousands)	2026		2025		2026		2025
	Operating Revenues (1)	$       161,325		$       244,136		$       617,876		$       666,014
	Investment Gains (Losses) (2)	(128,297)		33,735		6,329		23,222
	Total Revenues	$         33,028		$       277,871		$       624,205		$       689,236
	Adjusted EBITDA (3)	$      (219,142)		$       112,204		$       104,259		$       126,902
	Operating Adjusted EBITDA (4)	$           2,908		$         54,862		$       103,320		$         93,207

• Net (loss) income available to common shareholders: Third quarter 2026 results primarily reflected $(226.7) million of pre-tax losses on the Company's investment in Babcock & Wilcox. The investment in Babcock & Wilcox was valued at $160.3 million at September 30, 2026. Excluding Babcock & Wilcox, trading and realized and unrealized results on the Company's other investments were net gains of $4.8 million in the quarter. The Company also recorded a $14.6 million non-cash impairment to reduce the carrying value of its investment in GA Group to the subsequent sale price. For the nine months, the net loss reflected these third-quarter items and the absence of prior-year gains on the sale and deconsolidation of businesses and senior note exchanges, as well as prior-year income from discontinued operations.
• Revenues: Third quarter revenues primarily reflected trading losses in Capital Markets, lower ATM, private placement and underwriting revenues, partially offset by higher M&A and advisory revenues, and lower carried interest and commissions in Wealth Management. Nine-month revenues declined 9%, driven by lower Capital Markets trading gains, lower revenues in Corporate and All Other as result of prior-year divestitures, and lower service revenue in the Communications Business Group.
• Adjusted EBITDA⁽³⁾: Third quarter Adjusted EBITDA decreased primarily due to losses on the Company's investments largely driven by Babcock & Wilcox. For the nine months, Adjusted EBITDA reflected lower services and fees, and lower income from equity investments, partially offset by lower SG&A expenses.
• Operating Adjusted EBITDA⁽⁴⁾: Third quarter Operating Adjusted EBITDA was reduced by $17.4 million, reflecting the reversal of an unrealized second-quarter gain on structured equity financings, as well as a net markdown of the SpaceX carried interest. For the nine months, Operating Adjusted EBITDA was supported by a net year-to-date increase in the value of carried interest associated with investment funds holding positions in SpaceX, and lower selling, general and administrative expenses.
• Debt and Leverage: Net Debt⁽⁵⁾ declined 10%, or $64.7 million, to $562.3 million at September 30, 2026 from $627.0 million at December 31, 2025. Total Debt was reduced to $1.14 billion from $1.43 billion over the same period, driven primarily by debt paydowns and senior note exchanges. Subsequent to quarter end, the GA Group sale further reduced term-loan indebtedness, as described below.
• Cash: Cash, cash equivalents, and restricted cash totaled $145.7 million at September 30, 2026, compared to $229.3 million at December 31, 2025.
• Total Investments⁽⁶⁾: Total Investments⁽⁶⁾ decreased to $408.6 million at September 30, 2026, down from $520.5 million at December 31, 2025, with securities and other investments owned of $369.8 million, down from $446.8 million. The decrease included the $14.6 million impairment of the Company's investment in GA Group.

Segment Operations Third Quarter and Nine Months Ended September 30, 2026 Financial Results Summary

		Three Months Ended September 30,				Nine Months Ended September 30,
	(Dollars in thousands)	2026		2025		2026		2025
	Segment Revenues
	Capital Markets	$       (90,213)		$        108,732		$       135,610		$       172,124
	Wealth Management	24,327		42,403		134,455		128,302
	Lingo	36,185		39,690		115,763		121,150
	magicJack	8,529		9,331		25,879		28,909
	Marconi Wireless	7,132		8,128		22,037		26,847
	UOL	2,790		3,217		8,492		10,137
	Consumer Products	39,255		46,967		126,907		132,354
	Segment Income (Loss)
	Capital Markets	$      (120,040)		$          54,779		$        30,313		$        36,256
	Wealth Management	(3,735)		7,190		29,767		7,595
	Lingo	4,558		3,964		13,641		9,290
	magicJack	4,168		4,608		12,592		14,314
	Marconi Wireless	2,736		2,559		8,810		6,108
	UOL	1,700		1,477		4,662		4,881
	Consumer Products	(4,345)		(1,330)		(12,678)		(12,375)

• Capital Markets: Third quarter results primarily reflected trading losses of $(125.7) million, primarily on Babcock & Wilcox. Year-to-date results reflected lower trading gains and lower ATM, private placement and underwriting revenues amid smaller average deal sizes across the small- and mid-cap market, partially offset by higher M&A and advisory revenues.
• Wealth Management: Year-to-date growth was driven primarily by trading activity and carried interest. Third quarter results reflected a decrease in carried interest, lower trading gains, and lower commissions, partially offset by higher advisory fees. B. Riley Wealth had approximately $12.8 billion of client assets under management at September 30, 2026.
• Communications Business Group ("CBG") (Lingo, magicJack, Marconi Wireless, and UOL Reportable Segments): Income growth, on a combined basis, reflected successful cost-reduction initiatives, which more than offset a revenue decline driven by expected customer attrition.
• Consumer Products: Lower revenue reflected weaker consumer demand, partially offset by lower sales allowances and customer programs. The wider segment loss primarily reflected lower sales volume.

Pending Acquisition of Sangoma
On September 28, 2026, the Company entered into a definitive agreement to acquire Sangoma Technologies Corporation (TSX: STC; Nasdaq: SANG), a business communications solutions provider, for a total enterprise value of $203.7 million. Sangoma shareholders will receive cash and the Company's common stock, and are expected to hold approximately 4% of the Company's pro forma outstanding shares. The transaction is expected to be funded with $212.3 million of committed senior secured term loans at the Company's telecommunications subsidiaries, which will replace their existing credit facilities ($71.5 million outstanding at September 30, 2026), resulting in $140.8 million of incremental debt at those subsidiaries. Total equity contributions are expected to be $54 million, comprising $38 million from the Company and $16 million from its telecommunications subsidiaries. The transaction is not subject to a financing condition and is expected to close no later than early 2027, subject to Sangoma shareholder, court and regulatory approvals and other customary conditions.

Sale of Remaining GA Group Interest
On November 3, 2026, the Company completed the sale of its remaining equity interest in Great American Holdings, LLC ("GA Group") to affiliates of Oaktree Capital Management, L.P. ("Oaktree"). The Company received total cash consideration of $62.3 million, of which $51.7 million was used to repay term-loan indebtedness owed to Oaktree affiliates. Concurrently, the Company amended its Oaktree credit agreement to add an incremental $26.5 million term loan and to eliminate any future prepayment premium, in exchange for a $3.3 million transaction fee paid in kind. After giving effect to these transactions, outstanding Oaktree term loans were reduced to $43.7 million from $65.6 million, and the Company added $36.5 million of liquidity, net of the closing fee. In the third quarter, the Company recorded a $14.6 million non-cash impairment to reduce the carrying value of its investment in GA Group to the sale price. Unaudited pro forma financial information will be filed by amendment to the Company's Current Report on Form 8-K no later than November 9, 2026.

Change in Non-GAAP Measures Presentation
The Company has updated its Operating Adjusted EBITDA calculation with adjustments that management believes better bifurcate the results of its investment activities from those of its operating businesses. The updated calculation, applied consistently across all comparable periods, now excludes income and loss related to the Company's equity investment in Great American Holdings, LLC, as well as the noncontrolling interest associated with investment gains and losses attributable to B. Riley Securities Holdings, Inc. and its subsidiaries.

Earnings Call
Management will discuss the Company's financial performance and operational highlights, followed by a question-and-answer session with analysts and investors.

Date: Thursday, November 5, 2026
Time: 4:30 p.m. ET (1:30 p.m. PT)
Link: https://ir.brcgh.com/events-and-presentations

Investors may access the call via the Company's website at ir.brcgh.com under "Events and Presentations." A replay of the call will be available at the same location until Thursday, November 19, 2026.

About BRC Group Holdings, Inc.
BRC Group Holdings, Inc. (Nasdaq: RILY) is a diversified holding company with operations in financial services, communications, and retail, alongside investments in equity, debt, and venture capital. Its core financial services platform provides small-cap and middle-market companies with customized end-to-end solutions at every stage of the enterprise life cycle. Its investment banking business offers comprehensive services in capital markets, sales, trading, research, merchant banking, M&A, and restructuring. Its wealth management business provides financial planning services, including brokerage, investment management, insurance, and tax preparation. Its communications businesses provide consumer and business services including traditional, mobile, and cloud phone, internet and data, security, and email. Its consumer products and retail businesses provide mobile computing accessories and home furnishings. BRC Group deploys capital inside and outside its core financial services platform to generate shareholder value through opportunistic investments. For more information, please visit www.brcgh.com.

Note Regarding Use of Non-GAAP Financial Measures
Certain of the information set forth herein, including Operating Revenues, Investment Gains (Losses), Adjusted EBITDA, Operating Adjusted EBITDA, Total Investments, and Net Debt, may be considered non-GAAP financial measures, which are measures that differ from the most directly comparable measures calculated and presented in accordance with U.S. generally accepted accounting principles ("GAAP"). BRC Group Holdings, Inc. believes these measures are useful to investors as follows: Operating Revenues and Investment Gains (Losses) separate revenues generated by the Company's operating businesses from gains and losses on its investment portfolio; Adjusted EBITDA and Operating Adjusted EBITDA are performance measures that exclude items management does not consider indicative of ongoing results, with Operating Adjusted EBITDA further excluding investment-related gains and losses; and Total Investments and Net Debt provide a basis for evaluating the Company's capital resources and leverage.

As used herein, each measure is calculated as follows: (i) Operating Revenues includes services and fees, interest income - loans, interest income - securities lending, fixed income spread, trading gains attributable to variable rate transaction spread, and sale of goods; (ii) Investment Gains (Losses) includes trading gains (losses), net and fair value adjustments on loans, less fixed income spread and trading gains attributable to variable rate transaction spread; (iii) Adjusted EBITDA excludes (loss) income from discontinued operations, net interest expense, provisions for or benefit from income taxes, depreciation, amortization, restructuring charge, gain or loss on extinguishment of debt, gain on bargain purchase, gain on sale and deconsolidation of businesses, gain on senior note exchange, impairment of goodwill, tradenames and equity method investments, share-based payments, and transaction related and other costs; (iv) Operating Adjusted EBITDA excludes the aforementioned adjustments for Adjusted EBITDA as well as trading gains (losses), net, net of fixed income and variable rate transaction spread, fair value adjustments on loans, realized and unrealized gains (losses) on investments net of variable rate transaction spread, gains (losses) on investments attributable to noncontrolling interest, and income (loss) related to the Company's equity investment in Great American Holdings, LLC; (v) Total Investments includes securities and other investments owned net of (a) securities sold not yet purchased, at fair value and (b) noncontrolling interest related to investments from continuing operations, loans receivable, at fair value net of loan participations sold, equity investments, and other investments reported in prepaid and other assets; and (vi) Net Debt includes term loans, net, senior notes payable, net, revolving credit facility, and notes payable, net of (a) cash and cash equivalents, (b) restricted cash, (c) due from clearing brokers net of due to clearing brokers, and (d) Total Investments.

In addition, the Company's management uses these non-GAAP financial measures along with the most directly comparable GAAP financial measures in evaluating the Company's operating performance, management compensation, capital resources, and cash flow. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as reported by the Company may not be comparable to similarly titled amounts reported by other companies.

Footnotes
See "Note Regarding Use of Non-GAAP Financial Measures" for further discussion of these non-GAAP terms. A reconciliation of Operating Revenues, Investment Gains (Losses), Adjusted EBITDA, Operating Adjusted EBITDA, Total Investments, and Net Debt to the comparable GAAP financial measures is included in the financial statements portion of this press release.

1. Operating Revenues is defined as the sum of (i) services and fees, (ii) interest income - loans, (iii) interest income - securities lending, (iv) fixed income spread, (v) trading gains attributable to variable rate transaction spread, and (vi) sale of goods.
2. Investment Gains (Losses) is defined as the sum of (i) trading gains (losses), net and (ii) fair value adjustments on loans, less fixed income spread and trading gains attributable to variable rate transaction spread.
3. Adjusted EBITDA includes earnings from continuing operations attributable to BRC Group Holdings, Inc. before interest, taxes, depreciation, amortization, restructuring charge, share-based payments, gain or loss on extinguishment of debt, gain on bargain purchase, gain on sale and deconsolidation of businesses, gain on senior note exchange, impairment of goodwill, tradenames and equity method investments, and transaction related and other costs.
4. Operating Adjusted EBITDA is defined as Adjusted EBITDA excluding (i) trading gains (losses), net, net of fixed income and variable rate transaction spread, (ii) fair value adjustments on loans, (iii) realized and unrealized gains (losses) on investments net of variable rate transaction spread, (iv) gains (losses) on investments attributable to noncontrolling interest, and (v) income (loss) from the Company's equity investment in Great American Holdings, LLC ("GA Group").
5. Net Debt is defined as the sum of (a) term loans, net, (b) senior notes payable, net, (c) revolving credit facility, and (d) notes payable, net of (i) cash and cash equivalents, (ii) restricted cash, (iii) due from clearing brokers net of due to clearing brokers, and (iv) Total Investments.
6. Total Investments is defined as the sum of (a) securities and other investments owned net of (i) securities sold not yet purchased, at fair value and (ii) noncontrolling interest related to investments from continuing operations, (b) loans receivable, at fair value net of loan participations sold, (c) equity investments, and (d) other investments reported in prepaid and other assets.

Forward-Looking Statements
Statements made in this press release that are not descriptions of historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our expected future financial and operational results; our capital markets pipeline and the conversion of mandates into completed transactions; the expected timing, completion, financing and benefits of the pending acquisition of Sangoma Technologies Corporation; the integration of B. Riley Wealth and B. Riley Securities; the anticipated effects of the sale of our interest in GA Group; and our ability to execute on disciplined capital allocation and further debt reduction. These statements are based on management's current expectations and assumptions and are subject to risks and uncertainties, many beyond the Company's control, that could cause the Company's performance and actual results to differ materially. Such risks include, but are not limited to: macroeconomic conditions, including interest rate fluctuations and inflation; market volatility and its direct impact on our Capital Markets and Wealth Management segments and on the value of our investment portfolio, including carried interest; the episodic nature of our capital markets business and the unpredictable timing of transaction closings; the risk that the Sangoma acquisition is not completed on the expected terms or timeline, or at all; our ability to successfully execute our merchant banking strategies and the impact of market conditions on our investment portfolio; changes in regulatory and legal environments affecting our operating units; and the risks described from time to time in the Company's periodic filings with the SEC, including, without limitation, the risks described in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, as amended, its Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, its Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, and its Quarterly Report on Form 10-Q for the quarter ended September 30, 2026. Forward-looking statements speak only as of the date of this press release, and the Company undertakes no obligation to update them, except as required by law.

BRC GROUP HOLDINGS, INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands, except share and par value)
	September 30, 2026		December 31, 2025
	(Unaudited)
Assets
Assets:
Cash and cash equivalents	$        144,072		$        226,601
Restricted cash	1,651		2,676
Due from clearing brokers	19,402		51,000
Securities and other investments owned ($307,830 and $382,461 at fair value)	369,818		446,843
Securities borrowed	235,009		114,937
Accounts receivable, net of allowance for credit losses of $5,560 and $6,108	59,062		55,473
Loans receivable, at fair value ($1,086 and $2,835 from related parties)	10,798		26,303
Equity investments	68,059		90,433
Prepaid expenses and other assets	117,961		128,650
Operating lease right-of-use assets	36,252		32,109
Property and equipment, net	18,268		17,606
Goodwill	392,687		392,687
Other intangible assets, net	94,599		118,290
Deferred income taxes	793		763
Assets of discontinued operations	2,221		2,221
Total assets	$      1,570,652		$      1,706,592
Liabilities and Deficit
Liabilities:
Accounts payable	$          34,929		$          41,463
Accrued expenses and other liabilities ($190 and $6,400 at fair value)	125,198		154,780
Deferred revenue	45,030		49,907
Deferred income taxes	4,409		4,109
Securities sold not yet purchased, at fair value	7,897		9,809
Securities loaned	217,125		97,321
Operating lease liabilities	43,773		40,902
Revolving credit facilities	32,285		6,638
Term loans, net	115,421		119,297
Senior notes payable, net	988,328		1,301,798
Liabilities of discontinued operations	830		830
Total liabilities	1,615,225		1,826,854
Commitments and contingencies
BRC Group Holdings, Inc. stockholders' deficit:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 4,563 shares issued and outstanding and liquidation preference of $128,187 and $122,142	—		—
Common stock, $0.0001 par value; 100,000,000 shares authorized; 40,199,755 and 30,597,066 issued and outstanding	4		3
Additional paid-in capital	680,912		598,022
Accumulated deficit	(770,467)		(763,286)
Accumulated other comprehensive loss	(8,167)		(6,272)
Total BRC Group Holdings, Inc. stockholders' deficit	(97,718)		(171,533)
Noncontrolling interests	53,145		51,271
Total deficit	(44,573)		(120,262)
Total liabilities and deficit	$      1,570,652		$      1,706,592

BRC GROUP HOLDINGS, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
(Dollars in thousands, except share and per share data)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Revenues:
Services and fees ($206 and $1,319 for the three months and $13,105 and $9,168 for the nine months ended September 30, 2026 and 2025 from related parties, respectively)	$   112,451		$   170,668		$   438,168		$   475,279
Trading (losses) gains, net	(124,401)		53,012		33,534		64,521
Fair value adjustments on loans ($50 and $(49) for the three months and $106 and $(3,185) for the nine months ended September 30, 2026 and 2025 from related parties, respectively)	1,215		1,299		12,005		(5,997)
Interest income - loans ($— and $647 for the three months and $— and $1,818 for the nine months ended September 30, 2026 and 2025 from related parties, respectively)	1,509		2,094		5,394		9,143
Interest income - securities lending	2,004		2,523		4,887		5,487
Sale of goods	40,250		48,275		130,217		140,803
Total revenues	33,028		277,871		624,205		689,236
Operating expenses:
Direct cost of services	27,120		31,291		88,186		107,207
Cost of goods sold	28,893		35,001		92,619		106,847
Selling, general and administrative expenses	114,409		143,892		382,134		453,649
Restructuring charge	20		184		1,934		505
Impairment of tradename	1,200		—		5,200		1,500
Interest expense - Securities lending and loan participations sold	1,100		2,094		2,723		4,781
Total operating expenses	172,742		212,462		572,796		674,489
Operating (loss) income	(139,714)		65,409		51,409		14,747
Other income (expense):
Interest income	241		1,491		938		3,469
Dividend income	198		564		1,000		821
Realized and unrealized (losses) gains on investments	(97,485)		32,756		19,707		28,472
Change in fair value of financial instruments and other	(245)		(3,314)		(3,126)		9,492
Gain on sale and deconsolidation of businesses	—		—		—		86,213
Gain on senior note exchange	—		12,222		—		67,208
(Loss) income from equity investments	(14,492)		9,193		(18,625)		34,244
(Loss) gain on extinguishment of debt	—		(950)		1,607		(21,643)
Interest expense	(17,842)		(18,769)		(55,652)		(72,685)
(Loss) income from continuing operations before income taxes	(269,339)		98,602		(2,742)		150,338
Benefit from (provision for) income taxes	24,048		(1,183)		1,207		(1,194)
(Loss) income from continuing operations	(245,291)		97,419		(1,535)		149,144
(Loss) income from discontinued operations, net of income taxes	(2,401)		(1,866)		(2,401)		70,841
Net (loss) income	(247,692)		95,553		(3,936)		219,985
Net (loss) income attributable to noncontrolling interests	(6,689)		4,470		3,245		(594)
Net (loss) income attributable to BRC Group Holdings, Inc.	$  (241,003)		$     91,083		$     (7,181)		$   220,579
Preferred stock dividends	2,015		2,015		6,045		6,045
Net (loss) income available to common shareholders	$  (243,018)		$     89,068		$    (13,226)		$   214,534
Basic net income (loss) per common share:
Continuing operations	$       (5.98)		$        2.97		$       (0.29)		$        4.70
Discontinued operations	(0.06)		(0.06)		(0.07)		2.32
Basic (loss) income per common share	$       (6.04)		$        2.91		$       (0.36)		$        7.02
Diluted net income (loss) per common share:
Continuing operations	$       (5.98)		$        2.97		$       (0.33)		$        4.70
Discontinued operations	(0.06)		(0.06)		(0.07)		2.32
Diluted (loss) income per common share	$       (6.04)		$        2.91		$       (0.40)		$        7.02
Weighted average basic common shares outstanding	40,232,819		30,597,066		36,683,700		30,541,169
Weighted average diluted common shares outstanding	40,232,819		30,597,066		36,837,593		30,541,169

BRC GROUP HOLDINGS, INC.
Operating Revenues Reconciliation
(Unaudited)
(Dollars in thousands)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Total revenues	$       33,028		$      277,871		$      624,205		$      689,236
Operating revenues adjustments:
Trading losses (gains), net	124,401		(53,012)		(33,534)		(64,521)
Fair value adjustments on loans	(1,215)		(1,299)		(12,005)		5,997
Fixed income and trading gains attributable to variable rate transactions spread	5,111		20,576		39,210		35,302
Total operating revenue adjustments	128,297		(33,735)		(6,329)		(23,222)
Operating revenues	$      161,325		$      244,136		$      617,876		$      666,014

BRC GROUP HOLDINGS, INC.
Adjusted EBITDA and Operating Adjusted EBITDA Reconciliations
(Unaudited)
(Dollars in thousands)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Net (loss) income attributable to BRC Group Holdings, Inc.	$     (241,003)		$        91,083		$        (7,181)		$      220,579
(Loss) income from discontinued operations, net of income	(2,401)		(1,866)		(2,401)		70,841
Net loss (income) attributable to noncontrolling interests	6,689		(4,470)		(3,245)		594
(Loss) income from continuing operations	(245,291)		97,419		(1,535)		149,144
EBITDA Adjustments:
Net loss (income) from continuing operations attributable to noncontrolling interests	6,689		(4,470)		(3,245)		594
(Benefit from) provision for income taxes	(24,048)		1,183		(1,207)		1,194
Interest expense	17,842		18,769		55,652		72,685
Interest income	(241)		(1,491)		(938)		(3,469)
Share based payments	1,584		2,401		7,250		9,981
Depreciation and amortization	7,368		8,434		22,505		27,079
Restructuring charge	20		184		1,934		505
Gain on sale and deconsolidation of businesses	—		—		—		(86,213)
Gain on senior note exchange	—		(12,222)		—		(67,208)
Loss (gain) on extinguishment of debt	—		950		(1,607)		21,643
Impairment of tradename	1,200		—		5,200		1,500
Impairment of equity method investment	14,552		—		14,552		—
Transactions related costs and other	1,183		1,047		5,698		(533)
Total EBITDA adjustments	26,149		14,785		105,794		(22,242)
Adjusted EBITDA	$     (219,142)		$      112,204		$      104,259		$      126,902
Operating EBITDA Adjustments:
Trading losses (gains), net	124,401		(53,012)		(33,534)		(64,521)
Fair value adjustments on loans	(1,215)		(1,299)		(12,005)		5,997
Realized and unrealized losses (gains) on investments	97,485		(32,756)		(19,707)		(28,472)
Fixed income and variable rate transaction spread	9,609		32,244		55,407		52,353
Loss attributable to equity method investment in Great American Holdings, LLC	1,042		(6,410)		6,547		(2,771)
(Losses) gains on investments attributable to noncontrolling interest	(9,272)		3,891		2,353		3,719
Total Operating EBITDA Adjustments	222,050		(57,342)		(939)		(33,695)
Operating Adjusted EBITDA	$         2,908		$        54,862		$      103,320		$        93,207

BRC GROUP HOLDINGS, INC.
Total Investments and Net Debt Reconciliation
(Unaudited)
(Dollars in thousands)
	September 30, 2026		December 31, 2025
Cash, cash equivalents, and restricted cash	$        145,723		$        229,277
Due from clearing brokers	19,402		51,000
Securities and other investments owned	369,818		446,843
Securities sold not yet purchased, at fair value	(7,897)		(9,809)
Loans receivable, at fair value	10,798		26,303
Equity investments	68,059		90,433
Noncontrolling interest	(32,194)		(33,305)
Total investments	408,584		520,465
Revolving credit facilities	32,285		6,638
Term loans, net	115,421		119,297
Senior notes payable, net	988,328		1,301,798
Total debt	1,136,034		1,427,733
Net debt	$        562,325		$        626,991

Contacts

Mike Frank | Investor Relations | ir@brcgh.com | (212) 409-2424
Jo Anne McCusker | Media Relations | press@brcgh.com

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SOURCE BRC Group Holdings, Inc.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

Why did BRC Group Holdings report a third-quarter 2026 loss?

BRC's $243.0 million net loss available to common shareholders primarily reflected $226.7 million of pre-tax losses on its Babcock & Wilcox investment and a $14.6 million non-cash impairment of GA Group. Investments excluding Babcock & Wilcox generated net gains of $4.8 million during the quarter.

How will BRC Group Holdings finance the Sangoma acquisition?

The acquisition is expected to use $212.3 million of committed senior secured term loans at BRC's telecommunications subsidiaries and $54 million of equity contributions. The loans will replace facilities with $71.5 million outstanding at September 30, 2026, resulting in $140.8 million of incremental subsidiary debt. Equity contributions are expected to comprise $38 million from BRC and $16 million from its telecommunications subsidiaries.

What changed in BRC Group Holdings' ownership of B. Riley Securities?

BRC restored 100% ownership of B. Riley Securities Holdings on October 22, 2026. The company also said it continues to advance the business's integration with B. Riley Wealth.