Breaking Down B. Riley Financial, Inc. (RILY) Financial Health: Key Insights for Investors

You're looking at B. Riley Financial, Inc. (RILY) and seeing a stock that's trading around $4.37 with a market capitalization of just over $133.77 million, and honestly, the financial picture is a puzzle you need to solve before making a move. We just got the long-delayed Q1 2025 results, which showed a revenue drop of 37.5% year-over-year to $186.06 million, resulting in a GAAP earnings per share (EPS) loss of ($0.39). Still, management is projecting a much stronger first half of 2025, with estimated revenue between $405 million and $425 million and net income available to common shareholders ranging from $125 million to $145 million. The real near-term risk, though, is the compliance tightrope: the company is working to meet Nasdaq deadlines for its remaining quarterly filings, plus they are carrying an estimated total debt of $1.46 billion as of June 30, 2025. You defintely need to understand how they plan to bridge that gap between recent losses, the debt load, and their ambitious forward guidance.

Revenue Analysis

You're looking at B. Riley Financial, Inc. (RILY) and wondering where the money is actually coming from, especially with the volatility in the broader financial markets. The direct takeaway is that B. Riley Financial, Inc.'s revenue streams are highly diversified but faced a significant contraction in the first quarter of 2025, driven by a sharp drop in its core financial services segments.

For Q1 2025, B. Riley Financial, Inc. reported total revenue of $186.06 million. This number is defintely a head-turner because it represents a year-over-year revenue decline of 37.5%. That kind of drop is a clear signal of sector-wide pressures, but also points to specific challenges within their business mix, particularly in areas like trading income, interest income, and loan valuation adjustments.

Here's the quick math on where that $186.06 million came from, showing the company's fragmented (diversified) revenue streams:

• Communications: This segment, which includes internet and cloud services, was the largest contributor at $64.47 million (about 34.7% of total revenue).
• Wealth Management: This segment brought in $47.28 million (about 25.4%).
• Consumer Products: Selling items like laptop accessories, this segment generated $42.10 million (about 22.6%).
• Capital Markets: The core investment banking and corporate finance segment generated only $4.36 million (about 2.3%), highlighting the impact of market challenges.

The company's structure is complex, with five main reportable segments-Capital Markets, Wealth Management, Communications, Consumer Products, and E-Commerce-plus a chunk from diversified operations. The heavy reliance on Communications and Wealth Management to offset the weakness in Capital Markets is a critical point for investors to watch.

To be fair, the biggest change investors need to map is the strategic shift underway. B. Riley Financial, Inc. is actively selling off its Wealth Management and Financial Consulting businesses. This is not a minor adjustment; it's a major restructuring that will fundamentally alter the revenue mix going forward, likely shrinking the contribution from the Wealth Management segment that accounted for over a quarter of Q1 2025 revenue. You should anticipate this sale to have a major effect on operations, as detailed in our full analysis on the company's outlook: Breaking Down B. Riley Financial, Inc. (RILY) Financial Health: Key Insights for Investors.

This revenue decline, coupled with the business sales, means B. Riley Financial, Inc. is pivoting, but still operating in a high-risk, high-reward environment.

Profitability Metrics

You want to know if B. Riley Financial, Inc. (RILY) is a profitable business, and the short answer is that while the core operations still generate a healthy gross margin, the overall picture is one of significant losses, albeit with a notable recent trend toward improvement.

The company's profitability ratios, especially the bottom-line net margin, are firmly in the negative territory, reflecting the costs of its diversified structure and ongoing restructuring efforts following financial issues at a key investment. Still, the first quarter of 2025 showed a clear, positive shift in loss reduction.

Gross, Operating, and Net Margins

The first place to look is the gross profit margin, which tells us how efficiently B. Riley Financial, Inc. (RILY) delivers its core services before factoring in overhead like corporate salaries and interest. The recent gross margin stands at approximately 61.86%. That's a solid number, suggesting that the cost of revenue-the direct costs tied to generating revenue from its Capital Markets, Wealth Management, and other segments-is well-managed.

However, the picture darkens quickly as you move down the income statement. Here's the quick math for Q1 2025:

• Q1 2025 Revenue: $186.1 million
• Q1 2025 Total Operating Expenses: $247.5 million

This gap results in a substantial operating loss. The recent trailing twelve months (TTM) operating margin is a deeply negative -29.81%, meaning the company is spending roughly $1.30 in total operating expenses for every $1.00 of revenue it brings in. The net profit margin-the final take-home percentage after all costs, interest, and taxes-is also severely negative, with a TTM figure of -63.41%.

Profitability Trends and Operational Efficiency

While the TTM figures are a harsh reality check, the near-term trend is the critical data point. For the first quarter of 2025, B. Riley Financial, Inc. (RILY) reported a net loss of $16.57 million on revenue of $186.1 million. Here's the good news: this net loss was a 65.5% improvement from the loss reported in Q1 2024. That's a significant step toward operational efficiency.

The improvement in the net loss, despite a 37.5% year-over-year revenue decline, points directly to aggressive cost management. The total operating expenses in Q1 2025 fell to $247.5 million from $313.6 million in Q1 2024. This is the company's management showing they can cut costs when the top line shrinks. This focus on operational streamlining is a clear action item for them, and it's paying off in loss reduction.

Industry Comparison: A Sobering View

To put B. Riley Financial, Inc. (RILY)'s performance in perspective, we have to look at its peers in the diversified financial services and asset management space. The company's recent 61.86% gross margin is respectable, but it still lags the industry average for Asset Management firms, which sits around 77.5%, and Diversified Banks at 97.5%.

The real challenge is the bottom line. Most established financial institutions operate with healthy net margins. For context, here is how B. Riley Financial, Inc. (RILY)'s recent performance stacks up against industry averages as of November 2025:

The massive disparity in the net profit margin is the single most important metric here. The company's negative margins show it's nowhere near the typical 22% to 29.9% net profitability of its peers. This comparison underscores that the current profitability issues are not simply a cyclical downturn, but a deep, company-specific challenge that is defintely tied to managing its complex, non-core assets and overall cost structure. You can dive deeper into the ownership structure and market sentiment in Exploring B. Riley Financial, Inc. (RILY) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

You need a clear picture of how B. Riley Financial, Inc. (RILY) funds its operations, and the short answer is: it relies heavily on debt, which is a significant risk factor right now. The company's debt-to-equity ratio is in deep negative territory, a signal of financial distress that demands your attention.

As of the first half of 2025, B. Riley Financial, Inc. reported an estimated total debt of around $1.46 billion, a reduction of $600 million from late 2024, which is a positive step. However, the balance sheet shows a critical issue: total shareholder equity is negative, hovering between -$456.0 million and -$488 million. This means the company's total liabilities exceed its total assets, a situation that is defintely a red flag for any investor.

• Total Debt (Est. H1 2025): $1.46 billion
• Total Equity (Latest): -$456.0 million
• Debt-to-Equity Ratio (Latest): Approximately -4.10

Here's the quick math on the Debt-to-Equity (D/E) ratio: A negative equity figure automatically pushes the D/E ratio into a negative value, with the latest reading around -4.10. To be fair, the average D/E ratio for the Diversified Financial Services industry is about 1.021, meaning most peers have a dollar of debt for every dollar of equity. B. Riley Financial, Inc.'s ratio is an aggressive outlier, indicating extreme leverage and a capital structure that is currently upside down.

The company has been actively trying to manage its debt load in 2025 through a series of tactical maneuvers. Through five private bond exchanges completed up to July 2025, B. Riley Financial, Inc. cumulatively reduced its total outstanding debt by approximately $126 million. For instance, a July 2025 exchange reduced debt by about $18 million by swapping $43 million in outstanding Senior Notes for $25 million in newly issued 8.00% Senior Secured Second Lien Notes due January 2028, plus warrants.

This debt-to-equity balancing act involves a clear trade-off. The company is managing its short-term debt maturities, like the full redemption of its 6.375% Senior Notes due February 2025, but it's simultaneously issuing new, more secured debt with a higher coupon (like the 8.00% notes) and warrants, which is a form of equity dilution. They are also temporarily suspending cash dividends on preferred stock to conserve capital, a move that prioritizes debt servicing over equity returns. The shift shows a focus on securing the balance sheet by pushing out maturities and increasing the security of its debt, even at a higher interest cost. For a deeper dive into the firm's strategic direction, you can review its Mission Statement, Vision, & Core Values of B. Riley Financial, Inc. (RILY).

The key takeaway is that B. Riley Financial, Inc. is in a capital restructuring phase, using a mix of debt exchanges and equity-like warrants to manage its negative equity position. This is an aggressive strategy, but it's the only path when your capital structure is this leveraged.

Liquidity and Solvency

You need to know if B. Riley Financial, Inc. (RILY) can cover its near-term obligations while navigating its ongoing restructuring. The short answer is: the company has bought itself time through aggressive asset sales and debt management, but the fundamental solvency picture remains stressed.

Looking at the most recent Q1 2025 filing, the liquidity ratios suggest moderate short-term health. The Mission Statement, Vision, & Core Values of B. Riley Financial, Inc. (RILY). point to a focus on financial services, but the balance sheet tells a story of a diversified holding company under pressure.

Assessing B. Riley Financial, Inc.'s Liquidity Position

The standard liquidity metrics for B. Riley Financial, Inc. are above the critical 1.0 threshold, which is a necessary but not sufficient condition for comfort. Here's the quick math from Q1 2025 financial data:

• Current Ratio: At 1.44, this means B. Riley Financial, Inc. has $1.44 in current assets for every $1.00 in current liabilities.
• Quick Ratio: At 1.24, this removes less-liquid assets like inventory, showing a still-healthy cushion.

These ratios, on their own, indicate the company has adequate liquidity to meet its obligations over the next year. Management even stated they expect their cash, investments, and credit facilities to be sufficient for working capital requirements for at least the next 12 months.

Working Capital and Cash Flow Trends

The real story is in the working capital trends, which are heavily influenced by strategic, non-core actions. B. Riley Financial, Inc. has been actively de-leveraging and selling assets to manage its balance sheet, especially following the bankruptcy of Franchise Group.

The most significant trend is debt reduction, a major financing cash flow activity. The company estimates a total debt reduction of approximately $600 million between September 30, 2024, and June 30, 2025. This significantly eases the near-term maturity schedule. Plus, they redeemed all their 6.375% Senior Notes due February 2025, eliminating an immediate debt hurdle.

On the investing side, they realized cash proceeds of approximately $187 million from the sales of businesses like GlassRatner and Atlantic Coast Recycling. This cash injection has directly boosted liquidity.

For operating cash flow, the picture is mixed. While the company is working to improve its financial reporting-even appointing BDO as its new auditor for the 2025 audit-the core profitability remains a concern. The company is defintely relying on these strategic asset sales and debt exchanges to manage its cash position.

Here is a snapshot of the estimated near-term balance sheet impact:

Potential Liquidity Concerns

While the ratios look okay, you need to be a trend-aware realist. The Altman Z-Score-a measure of bankruptcy risk-is a flashing red light at -1.32, placing B. Riley Financial, Inc. in the distress zone. This score maps the high level of leverage, with a concerning debt-to-equity ratio of -3.77. The negative ratio stems from accumulated losses eroding shareholder equity.

The company's ability to 'kick the can down the road' on debt maturities is a strength, but it's not a fundamental recovery. The temporary suspension of cash dividends on preferred stock in January 2025 is a clear signal of cash preservation efforts. The key risk now shifts to the quality of the loan portfolio and the need to refinance major debt maturities in 2027-2028. The equity is still dependent on market confidence, not just core earnings improvement.

Valuation Analysis

You are defintely looking at a complex valuation picture with B. Riley Financial, Inc. (RILY). The direct takeaway is that while the stock appears significantly undervalued on a Price-to-Sales (P/S) basis, the company's negative earnings for the 2025 fiscal year make traditional metrics like Price-to-Earnings (P/E) useless for a clear 'Buy' signal. It's a situation where deep value meets high risk.

Because B. Riley Financial, Inc. (RILY) reported a loss per share of -$25.52 over the last twelve months and a Q1 2025 EPS of -$0.50, the Price-to-Earnings (P/E) ratio is effectively at a loss, or negative -0.17. This means you can't use the standard P/E comparison. Instead, we have to look at Price-to-Sales (P/S) and Price-to-Book (P/B) to get a sense of relative value. Here's the quick math on the key ratios, using data as of November 2025:

The Price-to-Sales ratio of 0.2x is compelling when compared to the industry average, but the negative Price-to-Book ratio of -0.36 and a concerning debt-to-equity ratio of -3.77 tell you the balance sheet is under significant pressure. This is why the stock is trading at a low price. You can dive deeper into the ownership structure and institutional sentiment by Exploring B. Riley Financial, Inc. (RILY) Investor Profile: Who's Buying and Why?

Looking at the stock price trend, the last 52 weeks have been a rollercoaster. The stock traded between a low of $2.67 and a high of $7.90. As of November 20, 2025, the price is around $4.37, which is a +5.40% increase over the full 52-week period, but the near-term trend is negative, with a loss of about -13.45% in the two weeks leading up to mid-November 2025. Volatility is high, with a Beta of 1.48, meaning it moves more sharply than the overall market. It's a high-wire act.

On the income side, B. Riley Financial, Inc. (RILY) has historically been a strong dividend payer, but the sustainability is questionable. The annual dividend is around $2.00 per share, giving an attractive yield of about 11.68% as of November 2025. But here's the rub: the payout ratio, based on reported earnings, is 100%, or even higher when considering the negative earnings. This means the company is paying out everything it earns, or more, to maintain the dividend, which is not a long-term sustainable practice. It suggests the dividend is funded by cash flow from other sources or debt, not net income.

Finally, the analyst consensus is cautious. Despite the low P/S ratio, the overall sentiment is a 'Sell' or a 'negative evaluation.' Specifically, for the current month, analysts have issued 0 Buy ratings, 8 Hold ratings, and 0 Sell ratings, suggesting a general wait-and-see approach, but the prevailing market sentiment leans bearish due to the financial challenges. The high insider ownership of 57.19% is a positive counterpoint, but it doesn't erase the profitability issues. Your next step should be to model a sensitivity analysis on the dividend's cash flow source to assess its safety over the next four quarters.

Risk Factors

You're looking for a clear-eyed view of B. Riley Financial, Inc. (RILY), and honestly, the immediate risks are less about market competition and more about financial housekeeping and regulatory compliance. The biggest near-term threat isn't a competitor; it's the clock on their SEC filings.

The company is grappling with significant operational and financial stress, highlighted by its recent financial reporting. For the first quarter of 2025 (Q1 2025), B. Riley Financial reported total revenue of just over $186.1 million, a sharp drop year-over-year, leading to a net loss attributable to the company of nearly $10 million. That kind of loss, along with an operating loss that widened to $61.5 million in the quarter, shows the core business is under pressure. It's a tough spot to be in.

Regulatory and Compliance Headwinds

The most immediate and severe risk is the threat of delisting from the Nasdaq. B. Riley Financial received a delinquency notice because they were late filing several Quarterly Reports on Form 10-Q. While they did file the Q1 2025 10-Q on November 18, 2025, they must file the Q2 2025 report by December 23, 2025, and the Q3 2025 report by January 20, 2026. Miss one of those deadlines, and the stock will be delisted-it's that simple.

• Nasdaq Delisting Risk: Conditional listing on meeting two hard filing deadlines.
• SEC Scrutiny: Ongoing civil subpoenas related to past dealings add a layer of legal uncertainty.
• Internal Controls: The mid-year transition to BDO as the new auditor for the 2025 audit, plus the need for heightened external staffing, signals that internal financial controls are defintely still under scrutiny.

Financial and Liquidity Stress

The financial risks are substantial, and they flow from the company's high leverage (debt-to-equity ratio of -3.77) and a challenging liquidity profile. The Altman Z-Score, a measure of insolvency risk, sits in the distress zone at around -1.32, which suggests a non-trivial risk of bankruptcy within two years. Here's the quick math on the debt: the firm still has approximately $1.46 billion in unresolved liabilities, and a significant chunk-around $470 million-matures in 2026.

This is a lot of debt coming due, so liquidity is key. You can see the company is actively trying to manage this, but it's a tightrope walk.

Here is a snapshot of the core financial vulnerabilities:

Operational and Strategic Risks

B. Riley Financial's investment banking and wealth management operations are highly sensitive to reputation, but that reputation has taken a hit from the delayed filings and regulatory probes. The firm's financials were also delayed by problems with a key investment, Franchise Group, which filed for bankruptcy last November. This kind of operational fragility, plus the reputational fallout, can lead to an employee exodus and make it harder to win new business.

Mitigation Actions

To be fair, management is taking clear steps to stabilize things. They've been focused on asset monetization, like the $80.8 million gain from business divestitures recognized in Q1 2025, which helps bolster liquidity. Plus, they've executed debt restructuring with Oaktree, which extended some obligations out to 2028. These are stopgaps, not cures, but they buy time. You can read more about the company's long-term view here: Mission Statement, Vision, & Core Values of B. Riley Financial, Inc. (RILY).

The key action for investors is to monitor those Nasdaq filing deadlines. If they meet the December 23rd and January 20th deadlines, it shows a real commitment to fixing their internal operations.

Growth Opportunities

You're looking for where B. Riley Financial, Inc. (RILY) will find its next gear, and honestly, the immediate future is less about massive revenue leaps and more about smart balance sheet de-risking that sets up real growth later.

The core strategy for 2025 is fortifying the balance sheet to free up capital for their most profitable businesses, which is a necessary step after a challenging 2024. The firm's diversified platform remains its key competitive advantage, allowing it to deploy capital opportunistically across different market cycles.

Here's the quick math on the near-term outlook:

• H1 2025 Revenue Estimate: Expected to range from $405.0 million to $425.0 million.
• H1 2025 Net Income Projection: Projected between $125.0 million and $145.0 million.
• H1 2025 Diluted EPS: Expected to be in the range of $4.08 to $4.74.

This projected net income includes significant one-time gains from asset sales, like the estimated $53 million from Atlantic Coast Recycling and $66 million from GlassRatner, which is how they're generating liquidity. What this estimate hides is that the underlying operating adjusted EBITDA from continuing operations is a much tighter range of $20.0 million to $26.0 million for the same period.

Strategic Initiatives: Capital Markets and AI Focus

The most important strategic initiative for future growth is the carve-out of B. Riley Securities (BRS) in March 2025. This move is about aligning capital and management to better serve clients in the Capital Markets segment, which is RILY's bread and butter.

BRS is specifically targeting emerging client priorities, particularly in AI investments. This isn't just buzzword-compliant talk; it means BRS is actively positioning itself to be a capital provider for the next wave of tech growth, evidenced by its role as a lead left book-runner on an AI infrastructure provider's initial public offering (IPO) in the first half of 2025. That's a clear, actionable growth driver.

Also, the firm is successfully monetizing non-core assets to pay down debt. They realized approximately $187 million in cash proceeds from the sales of GlassRatner and Atlantic Coast Recycling. This focus on debt reduction is defintely a precursor to sustainable growth, with an estimated total debt reduction of $600 million between September 30, 2024, and June 30, 2025. They've also paid off their 6.375% Senior Notes due February 28, 2025.

Competitive Edge: The Diversified Platform

B. Riley Financial, Inc.'s enduring competitive advantage is its unique, diversified financial services platform. They are not just an investment bank; they offer end-to-end solutions for small-cap and middle-market companies across the entire business life cycle.

This cross-platform expertise means they can move a client from investment banking to financial consulting to asset disposition (liquidation) all in-house, which is a powerful differentiator, especially in volatile markets. Their willingness to invest their own capital (Principal Investments) in opportunistic ventures that originate from their platform helps maximize returns and provides a stability to their revenue base that pure-play firms lack.

The various segments that contribute to this robust platform include:

• Capital Markets (Investment Banking, Institutional Brokerage).
• Wealth Management and Financial Planning.
• Financial Consulting (Restructuring and Turnaround Management).
• Principal Investments (Opportunistic capital deployment).

For a deeper dive into their long-term vision, you should review the Mission Statement, Vision, & Core Values of B. Riley Financial, Inc. (RILY).