Executive Summary

Consolidated Q2 2024 showed a small-scale operating business with meaningful quarter volatility from investment marks: total revenue was $7.87M, operating loss was $(6.05)M, and GAAP EPS was $(0.22); management highlighted >$4M in annualized cost savings and a multi-step simplification plan underway .
Segment signals were mixed: Strong Global Entertainment (SGE) revenue grew 18.7% YoY to $8.1M with gross profit of $1.5M (18.8% margin), reinsurance generated $3.7M of premium revenue with ~$3.2M operating expenses, while asset management posted $(4.0)M of mark-to-market losses .
Strategic catalysts: combining Strong/MDI with FG Acquisition to form Saltire (targeted to close by end of Q3 2024), and merging SGE into Fundamental Global to remove redundancies; balance sheet stood at $98.4M assets, $60.4M equity, and $3.1M total debt at quarter-end .
No earnings call transcript or numeric guidance was available; S&P Global (CIQ) consensus EPS/revenue estimates were unavailable for comparison (SPGI mapping not found) .

What Went Well and What Went Wrong

What Went Well
- Cost actions and simplification: “over $4 million in annual cost savings” already executed with more to come; management reiterated intent to streamline and focus on high-ROIC opportunities .
- SGE momentum: revenue +18.7% YoY to $8.1M; gross profit up $0.6M to $1.5M (18.8% margin) on increased installations/services and contributions from the ICS acquisition; SGE operating loss improved to ~$0.7M vs. $1.6M YoY .
- Reinsurance contribution: $3.7M of premium revenue with ~$3.2M operating expenses (including $2.1M losses/LR adjustment and $0.9M DPAC amortization), indicating an underwriting contribution despite limited scale .
What Went Wrong
- Investment marks: $(4.0)M asset management mark-to-market losses drove consolidated losses and quarter-to-quarter revenue volatility (net investment flows run through the revenue line) .
- Consolidated profitability: operating loss of $(6.05)M and net loss to common of $(6.23)M; preferred dividends of $0.45M also weigh on the common line .
- Sequential softness in consolidated “Total revenue” (includes net investment): $7.87M in Q2 vs. $8.64M in Q1 as negative marks offset full-quarter reinsurance contributions .

Financial Results

Note: Due to the reverse merger and reclassification of discontinued operations, comparability to prior periods is limited. Q4’23 reflects legacy FG Financial; Q1’24 includes one month of reinsurance; Q2’24 is the first full quarter post-merger. “Total revenue” includes net investment income/(loss).

Metric (USD)	Q4 2023	Q1 2024	Q2 2024
Total Revenue ($M)	$6.952	$8.643	$7.874
Net Premiums Earned ($M)	$5.097	$0.775	$3.697
Net Investment Income (Loss) ($M)	$1.526	$(3.399)	$(4.011)
Loss from Operations ($M)	N/A	$(5.932)	$(6.053)
Net Loss Attributable to Common ($M)	$(0.657)	$(4.359)	$(6.229)
Basic & Diluted EPS ($)	$(0.06)	$(0.27)	$(0.22)
Weighted Avg Shares (M)	10.522	16.744	28.518

Segment/KPI details (Q2 2024):

SGE revenue: $8.1M; gross profit: $1.5M (18.8% margin); operating loss improved to ~$0.7M vs. $1.6M YoY .
Reinsurance: $3.7M premium revenue; ~$3.2M operating expenses including $2.1M claims/LR and $0.9M DPAC amortization .
Asset management: $(4.0)M investment losses (unrealized mark-to-market) .

Balance sheet (Q2 2024):

Total assets $98.4M; stockholders’ equity $60.4M; debt $3.1M .

Guidance Changes

No formal revenue/EPS/margin guidance was provided. Management outlined structural milestones and cost targets.

Metric	Period	Previous Guidance	Current Guidance	Change
Corporate cost savings (run-rate)	Ongoing	N/A	>$4M annualized savings achieved; more planned	New disclosure
Saltire/Strong-MDI transaction closing	By end of Q3 2024	Announced	“Expect these transactions to close by the end of the third quarter”	Maintained timing
Merge SGE into Fundamental Global	2H 2024 process	Announced	Proceeding to “remove redundant costs and streamline”	Maintained
Dividends (8% Series A Preferred)	Quarterly	Ongoing	Q2 dividends declared: $0.447M	Maintained

Earnings Call Themes & Trends

No Q2 2024 earnings call transcript was available; themes below draw from company 8-K/press releases.

Topic	Previous Mentions (Q4 2023)	Previous Mentions (Q1 2024)	Current Period (Q2 2024)	Trend
Portfolio simplification/cost-outs	Reinsurance/merchant banking drove FY net income; operating overhead targeted	Sale of Digital Ignition; merger completed; focus on scalable, high-ROIC businesses	>$4M annual cost savings; merging SGE into FGF; Saltire closing targeted by Q3-end	Accelerating
Reinsurance growth	Net premiums $5.1M in Q4	$0.8M in Q1 (one month post-merger)	$3.7M full-quarter premiums	Scaling
Asset management marks	4Q net investment income $1.5M	$(3.4)M investment loss	$(4.0)M investment loss	Volatile/negative
Cinema/SGE	N/A in FGF-only Q4	Strong Entertainment demand; integration of ICS	SGE revenue +18.7% YoY; margin 18.8%; op loss improved to $0.7M	Improving ops
Capital structure	Equity $42.5M at 12/31/23	Equity $66.6M at 3/31/24	Equity $60.4M at 6/30/24	Larger scale post-merger

Management Commentary

“We’re aggressively simplifying and enhancing our operations... over $4 million in annual cost savings, and we have plans for additional savings coming over the next few quarters.” — Chairman & CEO Kyle Cerminara .
“We’ve also announced the combination of Strong/MDI Screen Systems with FG Acquisition Corp., which will create Saltire Holdings, Ltd.... merging Strong Global Entertainment into Fundamental Global will remove redundant costs and streamline our structure. We expect these transactions to close by the end of the third quarter.” .
Q1 framing of the strategy: “simplify all of our operations, reduce public company costs and focus our efforts on accelerating growth in select scalable and high ROIC businesses” .

Q&A Highlights

No Q2 2024 earnings call transcript was available; no Q&A to report after searching the company document set [“Found 0 documents for FGF of type earnings-call-transcript”].

Estimates Context

We attempted to retrieve S&P Global consensus (EPS and revenue) for Q2 2024 and Q1 2024; no mapping exists for FGF in the CIQ dataset (tool error: missing CIQ mapping). As a result, Wall Street consensus was unavailable, and we cannot quantify beats/misses this quarter via S&P Global [SpgiEstimatesError].

Key Takeaways for Investors

The core story is simplification and cost takeout: >$4M annualized savings are already realized, with further efficiencies expected from merging SGE into FGF and closing the Saltire transaction—key potential rerating catalysts as the structure simplifies .
Segment performance is bifurcated: SGE operating metrics are improving (revenue +18.7% YoY, higher gross profit, better op loss), while asset management marks are the primary driver of consolidated loss volatility .
Reinsurance contributions are scaling (full-quarter $3.7M of premiums), offering a steadier counterweight to investment marks as the program matures .
Consolidated GAAP profitability remains challenged near term (Q2 operating loss $(6.05)M; EPS $(0.22)), and sequential revenue softness reflects negative marks despite operational progress; watch for mark-to-market swings quarter to quarter .
Balance sheet scale and low debt provide runway ($98.4M assets, $60.4M equity, $3.1M total debt), but equity volatility could persist with investment exposure .
Near-term trading setup: milestone headlines (Saltire close, SGE merger execution, additional cost actions) likely dominate; medium term, improved mix (reinsurance/SGE services) vs. mark-to-market dependency should be the focus for stabilization and valuation .

Appendix: Additional Detail

SGE (Q2 2024): revenue $8.1M (+18.7% YoY), gross profit $1.5M (18.8% margin), op loss improved to ~$0.7M vs. $1.6M YoY; drivers include increased digital equipment sales, services demand, laser upgrades, and ICS acquisition contribution .
Reinsurance (Q2 2024): premium revenue $3.7M; operating expenses $3.2M including $2.1M claims/LR and $0.9M DPAC amortization .
Asset management (Q2 2024): investment losses $(4.0)M due to unrealized mark-to-market on equity securities .
Consolidated cash flow YTD: operating cash outflow $(3.75)M, investing inflow $4.27M, financing outflow $(0.82)M; cash and equivalents at $5.85M at quarter-end .

Sources:

Q2 2024 8-K/Ex.99.1, condensed statements, balance sheet and narrative .
Q2 2024 press release with segment detail .
Q1 2024 8-K/Ex.99.1 statements and narrative .
Q4 2023 8-K/Ex.99.1 statements and narrative (legacy FG Financial) .

No S&P Global consensus was available for FGF this quarter due to missing mapping in the CIQ dataset.

Fundamental Global Inc. (FGF)·Q2 2024 Earnings Summary