B Riley Financial (RILY) Q3 2026 Earnings Report

The call presented strong strategic execution, including debt reduction, the GA Group sale, progress toward the Sangoma acquisition, Communications income growth, lower operating expenses and continued investment in the platform. However, these positives were offset by a substantial third-quarter loss driven by Babcock & Wilcox mark-to-market losses, weaker Capital Markets activity, lower fee revenue, Targus challenges and continuing debt and professional-fee obligations. Overall, the positive strategic developments and operating improvements were balanced by significant reported financial volatility.

Management said operating adjusted EBITDA is on plan for the year, the Communications Business Group continues to track ahead of budget for the full year, and Sangoma is targeted to close in January 2027, or early next year subject to customary closing conditions, adding $35 million to $40 million of EBITDA and bringing the company into $75 million to $80 million of additional cash flows in '27 and '28, including synergies. The company expects fourth-quarter excess professional fees to come down roughly about that same number, $2 million, and is ranging between $5 million and $10 million of expected savings from accounting and legal costs in 2027, with an 80% likelihood to get those down; management is hoping it can do better than that in that $5 million to $10 million range. Cash flow requirements include the $164 million redemption of the RILYG senior notes due December 31 and equity for the Sangoma transaction, supported by up to $50 million of additional cash flow from balance sheet fundings, including SpaceX shares.