B. Riley Financial, Inc. 6.00% Senior Notes Due 2028

First-quarter 2026 total revenues were $352 million versus $186 million in the prior year. Net income attributable to common shareholders was $211 million, or $6.57 diluted EPS, compared with a net loss of $12 million, or a diluted loss of $0.39, in Q1 2025. Adjusted EBITDA was $262 million versus a loss of $45 million last year, and operating adjusted EBITDA was $34.6 million, up close to 40% sequentially. Total operating expenses were $199 million versus $247.5 million a year ago. The increase in revenue was driven by $161 million of higher trading gains on investments, including $130 million related to Babcock & Wilcox appreciation, while service and fee income was $152 million, down $6.7 million year over year. Looking ahead, management said the business is on a normal operating cadence and expects continued momentum, but it did not give formal next-quarter or full-year financial guidance. It did say total debt fell by $129 million in the quarter to $1.3 billion, net debt ended at $372 million, and two senior note series remain to be addressed in 2026, with principal amounts of $167 million due in September and $170 million due in December, both reduced by Section 3(a)(9) exchanges after quarter-end.

Bryant Riley said the firm is more enthusiastic about its position than at any point in recent years, pointing to balance sheet repair, operating discipline, and strong client activity. He emphasized that the company is using flexibility across investments, debt buybacks, and business reinvestment to create optionality rather than following a fixed playbook. He also framed B. Riley’s long-term edge as its focus on underserved small and mid-cap companies and said momentum should continue.

Scott Yessner highlighted the financial rebound, noting revenues of $352 million, operating expenses of $199 million, net income of $211 million, and adjusted EBITDA of $262 million. He said the largest revenue driver was a $229 million total increase in the Babcock & Wilcox investment across trading and unrealized gains, while interest expense fell to $20 million from $30 million a year ago due to lower borrowings. He also noted cash, cash equivalents, and restricted cash of $178 million, total debt of $1.3 billion, and net debt of $372 million, and said the company will keep using capital actions, operating cash flow, and investment liquidations to fund opportunities and scheduled debt paydowns.

Analysts pressed management on how it plans to use investment gains, and Bryant Riley said the company will keep making case-by-case decisions on bond buybacks, bond exchanges, asset sales, and reinvestment based on what best serves shareholders and bondholders. On the planned merger of B. Riley Securities with B. Riley Wealth, management said it had not yet quantified synergies, but expects revenue and cost benefits and said the move should help client connectivity and simplify operations. Analysts also asked why BRS is being recombined after previously being carved out; management said the landscape has changed, the structure has proven operationally challenging, and the company can now achieve better cost of capital and operating efficiency internally. On the recovery from delinquent-filer status, Bryant Riley said client re-onboarding has been strong and dramatic over the quarter.