B. Riley Financial NASDAQ: RILY reported second-quarter net income attributable to common shareholders of $19 million, or $0.45 per diluted share, as its capital markets, wealth management and communications businesses contributed to what Chairman, Founder and Co-CEO Bryant Riley called the company’s best core operating quarter in nearly three years.
The company posted $239 million in second-quarter revenue, up $14 million from a year earlier. Operating adjusted EBITDA was $66 million, while adjusted EBITDA was $61 million. For the first half of 2026, B. Riley reported net income of $230 million, or $6.47 per diluted share, on revenue of $591 million. First-half operating adjusted EBITDA totaled $100 million.
Riley said the company generated trailing-12-month net income attributable to common shareholders of $404 million and operating adjusted EBITDA of $182 million. He attributed the quarterly performance to the underlying earnings of the company’s operating units, including capital markets execution, wealth management cost controls, cash generation from communications operations and progress at its consumer-products business.
Revenue Growth Included SpaceX Carried Interest
Chief Financial Officer Scott Yessner said service and fee revenue rose $27.8 million year over year to $174 million during the second quarter. The increase included a $5.7 million gain in investment banking and brokerage fees and $30 million of management fees from carried interest in funds that own SpaceX. Those gains were partly offset by a $5.8 million decline in telecommunications and other revenue.
Second-quarter trading gains were $12.9 million, down $14.8 million from a year earlier, primarily because of a lower fair value on the company’s Babcock & Wilcox investment, Yessner said.
Operating expenses declined $13.6 million to $201 million in the quarter. The reduction reflected lower selling, general and administrative expenses, including occupancy, legal and other costs; lower telecom-related cost of goods sold and services; and lower consumer-product costs. Results also included $1.9 million in restructuring charges tied to the contemplated combination of B. Riley Securities and B. Riley Wealth.
For the first six months, revenue increased $180 million year over year, aided by $146 million in higher trading gains, including $131 million related to the Babcock & Wilcox investment. First-half service and fee income rose $21 million, supported by investment banking and brokerage fees as well as SpaceX-related carried interest management fees.
Capital Markets Activity and Wealth Assets
The capital markets segment, consisting of B. Riley Securities, reported second-quarter revenue of $54 million and income of $13 million. During the first half, segment revenue was $226 million and income was $150 million, driven in part by higher investment banking and capital markets fee income and trading gains tied to Babcock & Wilcox.
Riley said the firm participated in transactions representing $21 billion in aggregate deal value during the second quarter, including $8.5 billion in combined equity and debt issuances. The company also served as an agent on new at-the-market, or ATM, filings representing more than $12 billion in aggregate value.
Co-CEO Tom Kelleher said ATM fees more than doubled sequentially and that the firm saw strength in AI data-center infrastructure, power-related financing and business development company capital raising. He also said the company had reactivated several previously inactive institutional trading accounts and added five senior producers during the quarter.
The wealth segment generated $58 million in quarterly revenue and $18 million in income. It ended the quarter with $12 billion in assets under management and 184 financial advisors. Kelleher said the company has completed back-office integrations between B. Riley Securities and B. Riley Wealth, consolidated certain accounting, finance and end-market teams, and undertaken vendor rationalization efforts.
Communications Generates Income; Targus Posts Loss
The communications business group, which includes Lingo, magicJack, Marconi Wireless and United Online, reported aggregate second-quarter revenue of $58 million and income of $14 million. For the first half, revenue was $118 million and income was $27 million. Yessner said first-half income increased $4.6 million despite a $9 million decline in revenue.
Kelleher said the communications portfolio finished the quarter ahead of budget because of operating efficiencies and is expected to finish 2026 ahead of budget. He said the portfolio has generated more than $1.5 billion in revenue and approximately $300 million in operating income since 2018.
Targus, the company’s consumer-products segment, reported second-quarter revenue of $44 million and a $6 million loss. First-half revenue was $88 million and the loss was $8 million. Kelleher said targeted distribution-channel improvements helped narrow the segment’s first-half loss, while management is streamlining operations and reducing structural costs.
Debt Reduction and Near-Term Maturities
Yessner said total debt declined by $497 million from Dec. 31, 2024, to $1.277 billion at June 30, 2026. Interest expense fell $6 million year over year to $18 million in the second quarter. Cash equivalents and restricted cash totaled $156 million at quarter-end, compared with $229 million at the end of 2025.
The company reported securities and other investments of $724 million at June 30, up $277 million from year-end. The increase was primarily driven by a $213 million fair-value increase in the Babcock & Wilcox investment and a $43 million increase in partnership interests related to carried interest in funds that own SpaceX.
B. Riley has two senior-note maturities remaining in 2026: $142 million due Sept. 30 and $164 million due Dec. 31. In response to an analyst question, Yessner said the company had enough investments and cash to fund the year-end maturities, while Riley said management would not rule out potential capital actions as it evaluates the most productive use of its assets and cash.
Riley also said the company does not currently plan to restore cash dividends on preferred securities, stating that management believes capital can presently generate higher returns in other uses.
About B. Riley Financial (NASDAQ:RILY)
B. Riley Financial, Inc, headquartered in Los Angeles, California, is a diversified financial services company offering a broad range of advisory and investment solutions to individual, corporate and institutional clients. Since its founding in 1997 by Bryant E. Riley, the firm has expanded its capabilities across two primary segments: financial solutions and operations solutions. Its financial solutions segment provides investment banking services, equity research, merger and acquisition advisory, corporate finance, restructuring advisory and private capital solutions.
In addition to traditional investment banking, B.
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