Great Elm Group Q4 2026 Earnings Report

Great Elm Group EPS Results

• Actual EPS: $0.04
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Great Elm Group Revenue Results

• Actual Revenue: $10.56 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Great Elm Group Announcement Details

• Quarter: Q4 2026
• Date: 8/26/2026
• Time: After Market Closes
• Conference Call Date: Thursday, August 27, 2026
• Conference Call Time: 8:30AM ET

Great Elm Group (NASDAQ:GEG) (NASDAQ: GEG) is a closed-end investment company specializing in private credit and equity co-investments for U.S. middle-market companies. The firm’s portfolio is composed primarily of senior secured loans, unitranche financing structures and selective equity interests, with an emphasis on providing flexible capital solutions for growth initiatives, refinancings, acquisitions and recapitalizations.

Through a disciplined underwriting process, Great Elm Group evaluates opportunities across a diverse range of industry sectors, including healthcare, business services, manufacturing and consumer products. The company structures tailored financing packages that can include senior debt, subordinated debt and equity co-investments, allowing it to meet the unique capital needs of privately owned businesses while seeking attractive risk-adjusted returns for shareholders.

Headquartered in New York, Great Elm Group operates throughout North America and is managed by a team of credit and investment professionals with deep experience in investment banking, commercial lending and private equity. The firm’s active portfolio management approach combines rigorous credit analysis with ongoing engagement alongside portfolio companies, aiming to generate consistent cash distributions and long-term capital appreciation.

Great Elm Group Q4 2026 Earnings Call Transcript

Key Takeaways

• Negative Sentiment: Fiscal 2026 results were hurt by significant mark-to-market losses tied primarily to GECC investments; GECC’s stock price fell nearly 50% to $5.45 and its discount to NAV widened to approximately 31%.
• Positive Sentiment: Underlying platform growth continued, with nearly $400 million of gross capital raised, fee-paying AUM increasing 7% to approximately $590 million, and total AUM reaching approximately $771 million.
• Positive Sentiment: The real estate platform showed strong momentum: Monomoy REIT completed six acquisitions representing roughly $34 million of committed capital, while Monomoy CRE’s fourth-quarter fees rose 29% year over year to approximately $1.1 million.
• Positive Sentiment: GECC improved its liquidity and capital structure by eliminating 2026 debt maturities, extending its revolver, calling $6.5 million of high-cost debt after year-end, and retaining approximately $39 million of revolver availability.
• Positive Sentiment: Great Elm ended the year with approximately $53.5 million of cash, nearly $24 million of remaining share-repurchase authorization, and continued buybacks; management said it plans to prioritize AUM growth, fee-related earnings, platform scaling, and selective capital deployment in fiscal 2027.

Presentation

[Operator]

Welcome to the Great Elm Group fiscal 2026 fourth quarter and full year conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Adam Yates, Managing Director. Thank you. You may begin.

[Adam Yates, Managing Director at Great Elm Group]

Good morning, everyone. Thank you for joining us for Great Elm Group's fourth quarter and full year 2026 earnings conference call. As a reminder, this conference call is being recorded on Thursday, 27 August 2026. If you would like to be added to our distribution list, you can email geginvestorrelations@greatelmcap.com or sign up for alerts directly on our website at www.greatelmgroup.com. The slide presentation accompanying today's conference call and webcast can be found on our website under Events and Presentations. A link to the webcast is also available on our website, as well as in the press release announcing our results. Today's conference call includes forward-looking statements, and we ask that you refer to Great Elm Group's filings with the SEC for important factors that could cause actual results to differ materially from these statements.

[Adam Yates, Managing Director at Great Elm Group]

Great Elm Group does not undertake to update its forward-looking statements unless required by law. In addition, during today's call, management will refer to certain non-GAAP financial measures. Reconciliations to the most comparable financial measures are included in our earnings release. To obtain copies of our SEC filings, please visit Great Elm Group's website under Financial Information and select SEC Filings. Today's comments do not constitute an offer to sell or a solicitation of an offer to buy interests in any investment vehicle managed by Great Elm or its affiliates. Any such offer or solicitation will only be made pursuant to the applicable offering documents for such investment vehicle. On the call today, we have Jason Reese, CEO; Adam Kleinman, President and General Counsel; Nichole Milz, COO, and Keri Davis, CFO. I will now turn the call over to Jason Reese, CEO.

[Jason Reese, CEO at Great Elm Group]

Good morning and thank you for joining us today. Fiscal 2026 was a year of meaningful progress across Great Elm's platform. Although that progress was overshadowed by significant mark-to-market losses, primarily associated with our investments in GECC and GECC-related vehicles. Over the course of the year, GECC's stock price declined from $10.67-$5.45, a decrease of nearly 50%. Over the same period, the stock's discount to NAV widened from approximately 12% to approximately 31%. GECC's NAV at 30 June 2026 was $7.95 per share. These losses had a significant impact on our reported financial results, and we are not satisfied with the resulting fiscal year loss. At the same time, we made substantial progress building the underlying earnings power and scale of Great Elm. During fiscal 2026, GEG and its managed vehicles raised nearly $400 million of gross capital.

[Jason Reese, CEO at Great Elm Group]

Fee-paying AUM increased 7% to approximately $590 million, and we exited the year with improving momentum across both our real estate and alternative credit businesses. I will start with alternative credit. During the second half of the fiscal year, I assumed a more active leadership role at GECC, becoming Executive Chairman of GECC's Board on 2 March and CEO on 4 May. My priorities at GECC remain straightforward. First, protect and grow NAV. Second, generate sustainable income, and throughout the process, maintain discipline, capital allocation, rigorous underwriting, and clear accountability. We saw tangible progress against those objectives during fourth quarter. gecc's net assets increased approximately 3% sequentially. Portfolio performance improved, and less than 1% of investments were non-accrual at quarter-end. We also sourced and selectively deployed capital into new private investments that we believe offer attractive risk-adjusted returns.

[Jason Reese, CEO at Great Elm Group]

We also took important steps to strengthen GECC's capital structure and liquidity. During the year, GECC retired all $18.6 million of its notes maturing in 2026 and extended the maturity of its revolving credit facility, leaving no debt maturities until 2029. Subsequent to the quarter-end, GECC called an additional $6.5 million of its highest cost debt. At 30 June, GECC also maintained substantial liquidity, including approximately $39 million of availability under its revolving credit facility. These actions are part of a broader effort to reposition GECC for more consistent long-term performance. We believe a stronger portfolio, improved capital structure, and disciplined investment approach should ultimately benefit both GECC shareholders and Great Elm through the value of our investments and fee-related earnings generated by our asset management business. We are exploring opportunities to expand our investment strategy and enhance the value proposition for GECC shareholders.

[Jason Reese, CEO at Great Elm Group]

Importantly, our interests remain aligned with GECC shareholders. Great Elm Capital Management waived approximately $0.9 million of incentive fees in fourth quarter. bringing total incentive fees waived during fiscal 2026 to approximately $3.7 million, or $0.26 per GECC share. Turning to real estate, this was a particular area of strength during fiscal 2026. Our partnership with Kennedy Lewis provided substantial growth capital and helped accelerate the expansion of the Monomoy platform. Across Monomoy REIT, Monomoy CRE, Monomoy BTS, and Monomoy Construction Services, we are building an integrated real estate platform spanning acquisitions and asset management, development, and construction. Monomoy REIT had a fourth quarter for capital deployments, completing six acquisitions representing approximately $34 million of committed capital, including estimated future capital expenditures and tenant improvement commitments. We also continued value-add construction across the existing portfolio.

[Jason Reese, CEO at Great Elm Group]

Our focus remains on disciplined acquisitions where we believe active asset management can generate attractive risk-adjusted returns. During fourth quarter, we drew the remaining $50 million under our $150 million strategic financing with Kennedy Lewis, providing additional capital to fund the REIT's record acquisition activity and future growth. Combined with additional property-level financings completed during the year, we believe Monomoy REIT is well-positioned to continue scaling its IOS portfolio while maintaining a disciplined approach to capital deployment. Monomoy CRE continued to benefit from that growth, generating approximately $1.1 million of investment and property management fees during fourth quarter, up approximately 29% from the prior year period. For the full fiscal year, those fees totaled approximately $3.9 million, an increase in 19%. We are actively pursuing additional institutional capital to support continued growth and scale of the platform.

[Jason Reese, CEO at Great Elm Group]

Our build-to-suit business also continued to demonstrate its ability to create value. Monomoy BTS sold its third development property in June for approximately $0.9 million gain following the profitable sale of its second project earlier in the fiscal year. During fourth quarter, we commenced development on our fourth project in Texas and subsequent to year-end, acquired our fifth property for approximately $3 million. Monomoy Construction Services had a slower ramp than we initially anticipated, generating approximately $0.4 million of revenue during fourth quarter. however, we are encouraged by its developing pipeline with core tenants, IOS prospects, and expanding consulting and pre-development relationships. Taken together, we believe these businesses provide Great Elm with a differentiated, fully integrated real estate platform and substantial opportunity for additional scale. Beyond our core operating businesses, our CoreWeave-related investment continued to create value during the quarter.

[Jason Reese, CEO at Great Elm Group]

Since 1 April, we received approximately $3 million of distributions, bringing cumulative distributions since inception to approximately $8.6 million compared with our original $5 million investment. We also recognized approximately $2.1 million net gain on the investment during fourth quarter and continue to retain meaningful upside potential. Capital allocation remains another key priority. We repurchased shares for the 11th consecutive quarter, reflecting our view that our shares continue to represent an attractive use of capital at current valuation levels. During fourth quarter, we repurchased approximately 265,000 shares at an average price of $2.18 per share, representing roughly 1% of the shares outstanding at June 30. Since the inception of the repurchase program in 2023 through August 2024, we have repurchased approximately 8.1 million shares for $16.1 million at an average price of approximately $2 per share.

[Jason Reese, CEO at Great Elm Group]

Our Board has authorized up to $40 million of total repurchases, leaving nearly $24 million of remaining capacity. We intend to continue evaluating repurchases alongside our other investment opportunities based on where we believe we can generate the best risk-adjusted return for shareholders. As we enter fiscal 2027, Great Elm has growing fee-paying assets, improving operating momentum, and substantial financial flexibility. We ended June with approximately $53.5 million of cash and equivalents, providing meaningful capacity to invest in our existing businesses, pursue new opportunities, and continue disciplined capital allocation. Our priorities for fiscal 2027 are clear: continue growing AUM and fee-related earnings, scale our real estate and alternative credit platforms, improve the performance and value of our existing investments, and selectively pursue new opportunities where our capital, relationships, and operating capabilities provide an advantage.

[Jason Reese, CEO at Great Elm Group]

Fiscal 2026 demonstrated both the volatility that can result from our balance sheet investments and the progress occurring across our underlying businesses. Our focus is squarely on converting the operational progress into stronger, more consistent financial performance and long-term value for Great Elm shareholders. With that, I'll turn the call over to Keri for a review of our financial results.

[Keri Davis, CFO at Great Elm Group]

Thank you, Jason. I will provide a brief overview of fourth quarter, and of course, welcome all of you to review our filings for additional detail or reach out to our team with any questions. fourth quarter revenue was $10.6 million compared to $5.6 million in the prior year period, representing an 88% increase year-over-year. For fourth quarter, net income was approximately $1.1 million compared to net income of $13.6 million in the prior year period. The change in net income primarily reflected lower net unrealized gains on the company's investments compared with the prior year period. Adjusted EBITDA for the quarter was approximately $0.3 million compared to $1.5 million in the prior year period. Fee-paying AUM and AUM were approximately $590 million and $771 million respectively as of 30 June 2026, representing an increase of 7% and 2% from the prior year period.

[Keri Davis, CFO at Great Elm Group]

We ended the fiscal year with approximately $53.5 million of cash and cash equivalents. This strong liquidity position provides substantial financial flexibility to support growth initiatives across our platforms. Please refer to the earnings release accompanying investor presentation and our Form 10-K for a more detailed summary of our financial position. This concludes my financial review. With that, we will turn the call over to the operator to open the line for questions.

[Operator]

Thank you. We will now conduct a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that's star one to ask a question at this time. One moment while we poll for questions. At this time, there are no questions. I would like to turn the floor back over to Jason Reese for closing comments.

[Jason Reese, CEO at Great Elm Group]

Thank you again for joining us today. Before we conclude, I wanted to reiterate that fiscal 2026 included challenges, and our reported results were not where we would like them to be. We enter fiscal 2027 from a position of strength with growing fee-paying assets under management, substantial liquidity, improving momentum across both real estate and alternative credit, and significant capacity to invest in our businesses and repurchase shares when we believe doing so creates attractive value for shareholders.

[Jason Reese, CEO at Great Elm Group]

Our focus is execution. We intend to continue scaling our existing platforms, growing fee-related earnings, improving the performance and value of our investments, and selectively deploying our capital into opportunities where we believe our relationships and capabilities provide a differentiated advantage. Ultimately, our objective is straightforward: translate the progress we have made across the platform into stronger and more consistent financial performance and long-term value for Great Elm shareholders.

[Jason Reese, CEO at Great Elm Group]

We look forward to keeping you updated on our progress. Thank you for your time and continued support.

[Operator]

Thank you. Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. Please disconnect your lines and have a great day.

Participants

Executives

• Adam Yates, Managing Director
• Keri Davis, CFO

Analysts

• Jason Reese, CEO at Great Elm Group