GEGGL — Great Elm Group, Inc. 7.25% Notes due 2027

Great Elm Group (GEGGL) Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Revenue: $10.8 million for Q1 2026, up from $4 million in Q1 2025, primarily due to $7.4 million from the sale of a build-to-suit property.
• Assets Under Management (AUM): Total AUM at approximately $785 million, with fee-paying AUM at $594 million, reflecting a 9% year-over-year increase. On a pro forma basis, AUM and fee-paying AUM grew by 7% and 10%, respectively.
• Net Loss: Reported a net loss of $7.9 million compared to a net income of $3 million in the prior year, largely due to unrealized losses in investments.
• Adjusted EBITDA: Loss of $0.5 million versus a gain of $1.3 million in the prior year.
• Cash Position: Ended the quarter with approximately $53.5 million in cash.

2. Strategic Updates and Business Highlights:

• Raised nearly $250 million in debt and equity capital across credit and real estate platforms.
• Established a partnership with Kennedy Lewis Investment Management, which invested $150 million in leverageable capital for Monomoy REIT.
• Continued growth in Monomoy Real Estate Ventures, with a second property sold for over $7 million and a robust pipeline for future developments.
• GECC (Great Elm Capital Corp) raised $28 million in equity and improved its debt profile by refinancing high-cost debt, reducing annual cash interest expense.

3. Forward Guidance and Outlook:

• GEG remains focused on growing fee-paying AUM and scaling its credit and real estate platforms.
• The company is optimistic about leveraging its fixed cost structure to enhance profitability as it grows.
• Plans to continue capital raising efforts for both the REIT and BDC (Business Development Company) segments.

4. Bad News, Challenges, or Points of Concern:

• The net loss this quarter was significantly impacted by unrealized losses on investments, particularly in GECC common stock and CoreWeave-related investments.
• GECC's operating results were negatively affected by First Brands' bankruptcy, leading to a decline in NAV and placing investments on nonaccrual status.
• Despite strong capital initiatives, the losses indicate potential volatility and risks associated with investment performance.

5. Notable Q&A Insights:

• Management emphasized that they have established the necessary back-office infrastructure and are now focused on growth, expecting to maintain fixed costs while increasing revenue.
• There was a request for more information on the Monomoy REIT, which is currently a private entity with limited public information. Management indicated a willingness to provide further insights and suggested a potential public offering in the future.
• The Q&A highlighted the need for diversification in GECC's investment strategy following recent setbacks, with management acknowledging the importance of managing position sizes.

Overall, Great Elm Group demonstrated significant revenue growth and strategic advancements in Q1 2026, despite facing challenges related to investment performance and net losses. The company remains committed to its growth strategy and enhancing shareholder value.