Reliance Global Group, Inc. (RELI)·Q2 2024 Earnings Summary

Executive Summary

• Q2 revenue of $3.2M (+1% YoY), AEBITDA loss of $0.178M (~6% of revenue), operating expenses down 13% YoY to $4.4M, and net loss from continuing operations improved 62% YoY to $1.5M .
• Spetner Associates acquisition remains on track for 2H24 close; BenManage covered lives expanded to >85,000 (from ~45,000 at initial announcement), with management projecting approximately doubling annual revenue to ~$28M and significantly boosting AEBITDA post-close .
• Capital structure materially simplified: all Series B/G warrants exercised (removing perceived warrant overhang), 1-for-17 reverse split effected, and Nasdaq minimum bid compliance regained on July 16, 2024—reducing outstanding shares to ~0.921M post-split .
• Product roadmap: announced AI-powered Quote & Bind for commercial lines (workers’ comp, BOP, GL, cyber, inland marine, D&O, EPLI) with planned launch in Q4 2024, aiming to lift agent—and thus RELI Exchange—commission revenue .
• Wall Street consensus estimates from S&P Global were unavailable for the quarter, so no beat/miss framing is provided; coverage appears limited for this micro-cap name [GetEstimates unavailable].

What Went Well and What Went Wrong

• What Went Well

  • Cost discipline and operating efficiency: OpEx fell 13% YoY to $4.4M; net loss from continuing ops improved 62% YoY to $1.5M; AEBITDA nearly breakeven at a $0.178M loss (“just under 6% of revenues”) .
  • OneFirm execution: management highlighted unified carrier contracts, cross-collaboration, and vendor consolidation as key drivers of efficiency and scalability (“uniting our nine owned and operated agencies … access to higher commission tiers … reducing overall operating spend”) .
  • Spetner momentum: BenManage covered lives expanded to >85k; management reiterated projections to nearly double revenue to ~$28M and significantly boost AEBITDA post-close, positioning for meaningful synergy through RELI Exchange .

• What Went Wrong

  • Sequential softness: Q2 revenue of $3.2M compares to Q1 commission revenue of $4.1M, with only +1% YoY growth in Q2; management did not provide formal Q2 drivers beyond organic growth and OneFirm efficiencies .
  • Investment in growth: While operating costs fell YoY, commission and employee compensation costs increased, reflecting expansion and inflation headwinds, which offset some efficiency gains .
  • Guidance/coverage gap: No formal quantitative guidance (ex-Spetner accretion commentary) and no available S&P Global consensus, limiting external expectation-setting and near-term beat/miss catalysts [GetEstimates unavailable].

Financial Results

Notes:

• Q2 management described revenue as sustained organic growth and highlighted OneFirm efficiencies; Q1 revenue figure reflects commission income classification .

Segment breakdown: Not disclosed in Q2 materials; RELI operates P&C and health/benefits distribution through owned agencies and RELI Exchange, with pending Spetner expected to expand voluntary benefits meaningfully .

KPIs

Non-GAAP Adjustments

• AEBITDA excludes interest, D&A, goodwill/asset impairments, equity-based comp, changes in earn-out liabilities, changes in fair value of warrant liabilities, certain other income/expense, transactional costs, non-recurring costs, and results from discontinued operations .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We’ve seen 13% efficiencies for the second quarter of 2024 over the same period in 2023, and our $1.5 million net loss from continuing operations for the second quarter has improved by 62%... AEBITDA… came in at a nominal loss of $178,000” — Ezra Beyman, CEO .
• “OneFirm has provided the Company with access to higher commission tiers and has created broad cross-selling opportunities … we continue to consolidate our vendor relationships and contracts, thereby reducing our overall operating spend” — Ezra Beyman .
• “Spetner’s BenManage voluntary benefit insurance segment has experienced impressive growth, now covering over 85,000 employees … projections suggesting it will close to double our annual revenues to around $28 million and significantly boost our AEBITDA” — Ezra Beyman .
• “Operating expenses for the second quarter of 2024 decreased by 13% … to $4.4 million … [offset by] increases in commission and employee compensation costs” — Joel Markovits, CFO .
• “Reliance has significantly simplified its capital structure … removing … warrant overhang … [and] we are confident that our enhanced capital table will resonate well with our current shareholders and future investors” — Ezra Beyman .

Q&A Highlights

• Real estate division: Management sees an opportunity in multifamily given market dislocations; division to be led by Abe Miller under a success-based model; focus is to close Spetner first, then pursue real estate transactions .
• Spetner progress: Due diligence and documentation largely behind them; reiterated growth in covered lives to ~85k and strong momentum; targeting close by year-end 2024 .

Estimates Context

• S&P Global (Capital IQ) consensus for Q2 2024 revenue and EPS was unavailable; therefore, we cannot provide beat/miss framing relative to Wall Street expectations. The company did not provide formal quantitative guidance for Q3/FY beyond Spetner accretion commentary [GetEstimates unavailable] .

Key Takeaways for Investors

• Near-term storyline hinges on closing the Spetner acquisition in 2H24, which management projects will roughly double revenue to ~$28M and lift AEBITDA, while expanding RELI’s voluntary benefits footprint (85k lives and growing) .
• Cost transformation is gaining traction: OneFirm and vendor consolidation reduced OpEx 13% YoY, drove a 62% YoY improvement in net loss, and kept AEBITDA near breakeven in Q2 .
• Structural de-risking: Exercised warrants (removing perceived overhang), reverse split, and regained Nasdaq compliance improve financing flexibility and investor perception heading into the Spetner close .
• Product-driven upside: Q4’24 launch of AI Quote & Bind for commercial lines could materially enhance agent productivity and commission revenue capture for RELI Exchange .
• Watch sequential trends: Q2 revenue of $3.2M trails Q1’s $4.1M; absent consensus estimates or formal guidance, investors should focus on sustained OpEx control and execution milestones (Spetner close, Q4 product launch) .
• Post-close integration is critical: Management expects synergy via cross-selling through RELI Exchange; track integration KPIs (retention, cross-sell rates, margin trajectory) once Spetner is consolidated .
• Liquidity/scale catalysts: A larger, more profitable base post-Spetner and new commercial lines could broaden coverage and improve capital access; until then, event path (close, launch) is the stock’s primary catalyst map .

Citations:

• Q2 2024 press release and 8-K: .
• Q2 2024 earnings call: .
• Q1 2024 8-K and call: .
• 2023 update: .
• Other Q2-relevant releases: capital structure (warrants) , reverse split and share count , Nasdaq compliance regained , AI Quote & Bind (Q4’24) .