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GE

Great Elm Group, Inc. (GEG)·Q4 2025 Earnings Summary

Executive Summary

  • Record quarter: Net income from continuing operations was $15.7M, diluted EPS was $0.37, and adjusted EBITDA was $1.48M, with revenue of $5.61M; net income strength was driven primarily by unrealized gains tied to the CoreWeave-related investment and GECC stock appreciation, alongside record management and incentive fees from GECC .
  • Real estate platform acceleration: Strategic partnership with Kennedy Lewis provides up to $150M of leverageable capital to Monomoy REIT; $100M drawn at close, consolidating Monomoy’s real estate subsidiaries and positioning IOS-focused platform for scale .
  • Additional growth capital: Woodstead invested $9.0M in GEG common stock and received long-term warrants; an affiliate of Booker Smith invested $15.0M in GECC, with Smith joining GEG’s Board, adding credit/real estate expertise .
  • Balance sheet and capital return: Cash and marketable securities were ~$31M at quarter-end; repurchases reached ~5.1M shares for $9.3M at $1.85 average, with program expanded to $25M and ~$15.7M remaining capacity; book value per share rose to $2.65 (pro forma $2.58 after July/August transactions) .
  • Stock reaction catalyst: Narrative centers on durable fee growth from GECC, the KLIM financing “game changer” for Monomoy platform, and CoreWeave-driven gains; management flagged MCS’s expected revenue to “more than double” in FY26, a potential upward estimate driver for real estate services .

What Went Well and What Went Wrong

What Went Well

  • “Record Fourth Quarter Net Income…$15.7 Million,” with book value per share up 24% YoY to $2.65; operational drivers included growth in FPAUM and record GECC management and incentive fees .
  • Credit engine strong: GECC delivered record Total Investment Income ($14.3M) with >90% cash income; net investment income exceeded the dividend and GECC increased its quarterly distribution to $0.37 per share .
  • Real estate scaling: Launch of Monomoy Construction Services added $0.5M Q4 and $0.9M FY revenue; KLIM partnership committed up to $150M to Monomoy REIT and consolidated Monomoy CRE, BTS, and MCS into a vertically integrated platform .

What Went Wrong

  • Reported revenue fell 37% YoY to $5.61M due to the prior-year quarter’s $6.6M MBTS build-to-suit property sale; excluding that sale, revenue grew >140%, but headline optics still show a YoY decline .
  • Quarter’s profitability heavily reliant on unrealized gains (CoreWeave-related, SPVs, GECC appreciation), elevating volatility risk if marks reverse; management noted such investment-driven impacts in Q3 as well .
  • Adjusted EBITDA of $1.48M rose YoY but remains modest relative to reported net income, highlighting dependence on fair value movements vs. recurring operating profitability .

Financial Results

Income Statement Summary vs Prior Periods

MetricQ2 2025Q3 2025Q4 2025
Revenue ($USD Millions)$3.51 $3.21 $5.61
Net Income (Loss) from Continuing Ops ($USD Millions)$1.35 $(4.50) $15.72
Net Income Attributable to GEG ($USD Millions)$1.18 $(4.50) $13.57
Diluted EPS ($)$0.04 $(0.17) $0.37
Adjusted EBITDA ($USD Millions)$1.02 $0.47 $1.48

Margins vs Prior Periods

MetricQ2 2025Q3 2025Q4 2025
EBITDA Margin %29.2%*14.7%*26.4%*
Net Income Margin %38.6%*(140.1%)*280.5%*

Values marked with * retrieved from S&P Global.

Segment/Contribution Snapshot (Q4 2025)

Contribution ItemAmount ($USD Millions)
GECC Management + Incentive Fees$3.8
Monomoy Construction Services (MCS)$0.5
Prior-year Q4 MBTS Property Sale (for reference)$6.6

KPIs and Capital

KPIQ2 2025Q3 2025Q4 2025
FPAUM ($USD Millions)~$538 ~$565 ~$553
AUM ($USD Millions)~$751 ~$768 ~$759
Cash & Marketable Securities ($USD Millions)~$44 ~$32 ~$31
Book Value per Share ($)$2.30 $2.14 $2.65 (pro forma $2.58)
Share Repurchases (Cumulative)4.1M shares; $7.4M 4.8M shares; $8.7M 5.1M shares; $9.3M (avg $1.85)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
MCS Revenue OutlookFY 2026NoneManagement expects MCS revenue to “more than double” in FY26 Raised/Initiated
GECC Dividend per Share (Managed Vehicle)Q1–Q4 FY 2025$0.35 (pre-Q1 CY2025)$0.37 per share; maintained thereafter Raised (Q1 CY2025); Maintained
Share Repurchase AuthorizationOngoing$20M (FQ1) Expanded to $25M in July; ~$15.7M remaining capacity Raised

No formal quantitative revenue/EPS guidance was provided for GEG in Q4 2025 .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2025 and Q3 2025)Current Period (Q4 2025)Trend
Credit platform performance & feesQ2: GECC raised $13.2M at NAV; increased dividend; strong investment gains . Q3: Record TII; ATM program launched; fees building .GECC record TII $14.3M; >90% cash income; NII > dividend; record management/incentive fees to GEG .Strengthening; durable fee engine
Real estate platform build-out (MCS, MBTS, REIT)Q2: MCS formed via Greenfield acquisition; BTS progressing on projects; REIT acquired properties . Q3: MCS integration; BTS property pipeline; REIT acquisitions continue .MCS contributed $0.5M Q4, $0.9M FY; REIT capital facility expanded; KLIM partnership consolidates and funds platform .Scaling and capitalized
Strategic capital & partnershipsQ2/Q3: ATM program (GECC); ongoing repurchases; liquidity stable .KLIM partnership (up to $150M; $100M drawn); Woodstead $9M at $2.25; Booker Smith joins Board; GECC $15M equity .Transformational financing
CoreWeave-related investmentQ3: Unrealized losses across some positions, expectation of reversal .CoreWeave-related unrealized gains added >$11M; example of balance sheet-driven value creation .Positive mark-to-market impact
Capital return / book valueQ2/Q3: Repurchases at discount to BV; BV $2.30 → $2.14 .Expanded authorization; cumulative repurchases 5.1M shares; BV $2.65; pro forma $2.58 .Accretive buybacks; BV rising

Management Commentary

  • “Fiscal 2025 was the strongest operating year in our history, with outstanding performance across all areas of our business…GECC delivered exceptional performance…[and] our CoreWeave-related investment generated strong year-to-date returns.” – Jason Reese, CEO .
  • “Kennedy Lewis’s investment…provides up to $150 million of leverageable capital to Monomoy REIT, accelerating the expansion of our real estate platform…a major milestone for us.” – Jason Reese, CEO .
  • “We entered a strategic partnership with Kennedy Lewis…a game changer…With their support…we are well-positioned to supercharge Monomoy REIT’s growth toward our target of $1 billion in assets and a potential future IPO.” – Jason Reese, CEO .
  • “Adjusted EBITDA for the quarter was $1.5 million…book value per share of approximately $2.65…incorporating the two share issuances…$2.58 per share, and cash exceeds $40 million on a pro forma basis.” – Keri Davis, CFO .

Q&A Highlights

  • The call concluded without a Q&A session; no analyst questions were taken, leaving guidance and near-term outlook confined to prepared remarks .

Estimates Context

  • Wall Street consensus EPS and revenue estimates via S&P Global were not available for Q4 2025 for GEG; coverage appears limited at this stage [GetEstimates: Q4 2025 returned empty].
  • Implication: Model updates may focus on recurring fee growth (GECC management/incentive fees), MCS scaling, and the KLIM-driven real estate expansion, while treating CoreWeave-related marks as non-recurring/volatile. Values retrieved from S&P Global.

Key Takeaways for Investors

  • Fee engine is accelerating: Record GECC investment income and cash generation supported record fees to GEG, underpinning more predictable revenue alongside episodic investment gains .
  • Real estate platform gained institutional ballast: KLIM’s up to $150M financing (with $100M drawn) and consolidation under Real Estate Ventures materially enhance capacity to scale IOS assets and services .
  • Services revenue ramp: MCS contributed $0.5M in Q4 and $0.9M for FY; management expects revenue to more than double in FY26, a potential upward driver to forward estimates for real estate services .
  • Capital allocation remains accretive: Repurchases at discounts to book value lifted BV to $2.65; program expanded to $25M with ~$15.7M remaining capacity, indicating continued potential for BV accretion and per-share economics .
  • Investment marks drive reported earnings volatility: CoreWeave-related unrealized gains (> $11M) powered Q4 profit; treat as non-recurring and focus valuation on fee/AUM trajectories and segment scaling .
  • Managed vehicle tailwinds: GECC’s dividend increased to $0.37, ATM program launched, facility upsized and cheaper—supporting durable fee revenue and incentive outlook for GEG .
  • Near-term trading: Catalysts include further KLIM-enabled asset growth announcements, MCS contract wins, and any additional GECC capital raises; watch for subsequent quarter marks on investment positions and any progress toward a Monomoy REIT scale/IPO path .