B. Riley Financial, Inc. (RILY): BCG Matrix [Dec-2025 Updated]

You're looking at B. Riley Financial's current state, and honestly, it's a classic case of high-flying success mixed with serious baggage. The Capital Markets division is clearly the Star, pulling in $109.1 million in Q3 2025 revenue, while steady businesses like Telecom and Auction keep the lights on as Cash Cows. But, you can't ignore the Dogs, like the legacy investments that cost $772.3 million in write-downs last year, or the Question Marks surrounding the recent SEC filing delays and the big bet on the newly carved-out B. Riley Securities. Let's break down where B. Riley Financial needs to invest, hold, or finally sell off these pieces based on the BCG Matrix below.

Background of B. Riley Financial, Inc. (RILY)

You're looking at B. Riley Financial, Inc. (RILY), which, as of late 2025, is in a period of significant transition, even announcing a corporate name change to BRC Group Holdings, Inc.

The company operates as a diversified financial services firm through several key segments: Capital Markets, Wealth Management, Financial Consulting, Communications, Consumer, and E-Commerce. Honestly, the recent focus has been on streamlining operations following major asset sales and restructuring moves.

For context on the recent year, B. Riley Financial reported revenue of $186.06 million for the first quarter ended March 31, 2025, which was a drop from the $297.59 million seen in the year-ago quarter. This Q1 performance resulted in a basic/diluted loss per share from continuing operations of -$0.50.

A major strategic move was the carve-out of its B. Riley Securities ('BRS') business in March 2025. This subsidiary showed strong momentum; for the three months ended September 30, 2025, BRS reported total revenue of approximately $109.1 million and GAAP net income of approximately $41.8 million.

The balance sheet saw notable changes, too. As of June 30, 2025, the company estimated total debt had decreased by about $600 million since September 30, 2024, landing estimated net debt between $809 million and $839 million, with cash, cash equivalents, and restricted cash estimated at $268 million.

To get current with its reporting, B. Riley Financial filed its Q1 2025 Form 10-Q in November 2025, after facing a delinquency notice from Nasdaq. This filing followed the monetization of non-core assets, including the sale of GlassRatner for $118M and brand assets for $236M.

Finance: review the Q3 2025 BRS results against the H1 2025 guidance by end of day Monday.

B. Riley Financial, Inc. (RILY) - BCG Matrix: Stars

The Capital Markets segment, operating as B. Riley Securities, represents the Star quadrant for B. Riley Financial, Inc. (RILY), demonstrating high growth and significant market share within its specialized areas. B. Riley Securities delivered a highly profitable Q3 2025, reporting total revenue of approximately $109.1 million. This performance built upon momentum from Q2 2025, where the segment reported total revenue of $60.9 million.

Robust deal activity in Q3 2025 underscores this high market share, with the segment facilitating equity and debt financings totaling approximately $10.5 billion in capital raised for clients. This activity reflects a strategic focus on emerging client priorities, such as investments related to Artificial Intelligence, which has been a key driver. The segment is clearly a leader, but the high growth rate necessitates continued investment to maintain its market position.

You can see the sequential jump in performance between the second and third quarters of 2025 in the table below:

The commitment to high-growth sectors is evidenced by the firm's success in capturing mandates in areas experiencing rapid expansion. This focus is what keeps the market share high, even as the market itself is growing quickly, which is the definition of a Star in the matrix. The sequential improvements in Investment Banking and Institutional Brokerage revenues from Q2 2025 were significant, driven by increased client activity.

Key indicators supporting the Star classification for B. Riley Securities include:

• Capital raised for clients in Q3 2025 reached approximately $10.5 billion.
• Over the past year (as of Q2 2025), the firm helped clients raise over $8 billion for AI-driven investments.
• Q3 2025 Total Revenue of $109.1 million represents a substantial sequential increase over Q2 2025's $60.9 million.
• The Board approved a Q3 2025 dividend of $0.40 per common share, totaling approximately $7.4 million.

B. Riley Financial, Inc. (RILY) - BCG Matrix: Cash Cows

Telecom businesses provide consistent cash flows that facilitate momentum in core financial services. The B. Riley Securities subsidiary, which encompasses significant capital markets activity, reported preliminary third quarter 2025 total revenue of approximately $109.1 million and adjusted net revenue of approximately $75.7 million. This unit also supported equity and debt financings totaling approximately $10.5 billion in capital raised for clients during that quarter.

The Auction and Liquidation segment holds a strong market position, historically generating steady EBITDA. While specific 2025 segment EBITDA is not isolated, the company realized cash proceeds of approximately $187 million from business sales, including GlassRatner and Atlantic Coast Recycling, through June 30, 2025, indicating monetization of assets from these operations.

The Financial Consulting segment offers specialized, non-cyclical services like restructuring and appraisal. The company's overall financial health, as of June 30, 2025, included estimated cash, cash equivalents, and restricted cash of $268.0 million, supporting operations amidst a total debt reduction of approximately $600 million since September 30, 2024.

Stable Wealth Management business provides recurring revenue from high-net-worth clients. The B. Riley Securities board approved a dividend of $0.40 per common share, representing an approximately $7.4 million distribution, signaling confidence in the underlying, recurring cash generation capabilities of the core businesses.

Here's a quick look at key 2025 financial estimates and actuals:

The cash flow generation supports broader corporate needs:

• Cash and securities at B. Riley Securities totaled $145.9 million as of September 30, 2025.
• BRS continues to operate with no outstanding debt at the subsidiary level.
• Estimated cash, cash equivalents, and restricted cash for the parent company was $268.0 million as of June 30, 2025.
• The company realized approximately $187 million in cash proceeds from business sales through July 2025.

The focus remains on maintaining productivity in these established areas. Investments into supporting infrastructure, such as adding resources to support SEC filings, help maintain this cash flow.

B. Riley Financial, Inc. (RILY) - BCG Matrix: Dogs

You're looking at the parts of B. Riley Financial, Inc. that aren't driving growth or generating significant cash right now. These are the units that tie up capital without a clear path to market leadership, fitting the classic BCG Dog profile.

The Consumer Products segment, specifically tied to Targus, clearly falls into this category. This area is low-growth, and the market impact was evident in 2024. The company expected to record an impairment charge of approximately $28 million for the quarter ended June 30, 2024, tied primarily to Targus goodwill. That kind of write-down signals a market where share is low and future growth prospects are dim.

The Legacy Principal Investments portfolio represents a major cash drain and performance drag. For the full year 2024, this portfolio drove a preliminary net loss available to common shareholders of $772.3 million. This substantial loss was due to significant write-downs, including an estimated $510.0 million related to the equity investment in Freedom VCM Holdings LLC and Vintage Capital Management, plus an impairment of goodwill and other intangible assets totaling $105.4 million. Expensive turn-around plans are rarely worth it here; divestiture is the logical next step.

The move to exit the Great American businesses supports this strategy of minimizing Dogs. B. Riley Financial agreed to divest a majority stake in its Great American Group to Oaktree Capital Management in a deal valued at $386 million. The transaction closed on Nov. 15, 2024, with B. Riley receiving approximately $203 million in cash and retaining a 47% stake in the new entity, Great American NewCo. This signals a clear move away from this mature asset base.

Here's a quick look at the financial markers associated with these challenged areas:

Finally, the overall firm's financial structure is a drag, making it harder to support any underperforming unit. The overall firm's high leverage is a concern. As of June 30, 2025, the estimated total debt stood at $1.46 billion. To be fair, this is down from an estimated $1.84 billion at the end of December 2024, but that high debt load still requires cash flow that could be better used elsewhere. The focus must be on shedding these low-return assets.

The characteristics pointing to the Dog quadrant for these units include:

• Impairment charge for Targus goodwill in Q2 2024.
• Significant 2024 net loss from Principal Investments.
• Strategic divestiture of the Great American Group.
• High total debt of $1.46 billion as of mid-2025.

Finance: draft 13-week cash view by Friday.

B. Riley Financial, Inc. (RILY) - BCG Matrix: Question Marks

You're looking at the segments of B. Riley Financial, Inc. (RILY) that are consuming cash now but hold the promise of future market leadership-the classic Question Marks. These are businesses in high-growth areas where the company has not yet secured a dominant position. For B. Riley Financial, Inc., the most prominent example as of late 2025 is the recently carved-out B. Riley Securities.

The parent company's reputation has faced significant strain due to regulatory hurdles. B. Riley Financial, Inc. received a delinquency notification from Nasdaq on November 21, 2025, related to the delayed filing of its third-quarter 2025 Form 10-Q. This was not the first notice; previous notifications occurred on April 3, 2025, May 21, 2025, and August 20, 2025. The Nasdaq Hearings Panel granted an exception, setting deadlines for the second quarter 10-Q by December 23, 2025, and the third quarter 10-Q by January 20, 2026. The company intends to change its name to BRC Group Holdings, Inc. on January 1, 2026. This environment of delayed filings definitely impacts the perception of new ventures.

The carve-out of B. Riley Securities in March 2025 is the quintessential high-growth, low-market-share play. The goal is to establish B. Riley Securities as an independent, pure-play investment bank focused on the small cap and middle markets, a segment expected to see robust activity. However, B. Riley Financial, Inc. retains an approximately 89% ownership stake, meaning the unit still heavily relies on the parent for strategic alignment and capital access, even as it implements its own governance structure. The investment required to rapidly scale B. Riley Securities to challenge established players places it squarely in the Question Mark quadrant.

To fuel these growth initiatives, B. Riley Financial, Inc. secured enhanced flexibility via an amendment to its senior secured credit agreement with Oaktree Capital Management, L.P. in July 2025. This move provided the necessary dry powder. Here's a quick look at the new capital deployment options:

• New investment basket enabling an incremental $100 million deployment.
• Parent company investment basket upsized by 50% to $30 million.
• Ability to deploy up to $25 million for debt reduction.
• Outstanding balance on the Term Loan Facility reduced to $62.5 million.

These new baskets represent opportunistic capital deployments aimed at quickly gaining market share in high-growth areas, which is the textbook strategy for a Question Mark. The firm is actively hiring in Research, Investment Banking, and Sales Trading to support this growth.

The financial performance for the first half of 2025 highlights the cash-consuming nature and the reliance on non-recurring events to meet headline profitability targets. The preliminary unaudited estimates for H1 2025 net income available to common shareholders were projected to range from $125.0 million to $145.0 million. The dependency on asset sales to achieve this is stark when you look at the components:

The projected net income from continuing operations, ranging from $52.4 million to $72.4 million, is significantly lower than the total projected net income range of $125.0 million to $145.0 million. This heavy reliance on non-operating gains from asset sales-like the $66 million gain from the GlassRatner sale-to meet the overall net income goal is characteristic of a Question Mark that needs to convert its growth potential into sustainable operating returns quickly, or risk becoming a Dog.

For context on the carved-out B. Riley Securities, its first full quarter results post-carve-out (ended June 30, 2025) showed preliminary GAAP net income of $12.5 million on total revenue of $60.9 million. This unit is growing, but the parent company needs to see that growth translate into a larger, more sustainable operating profit contribution to justify the investment and avoid being divested.