Great Elm Group Reports 24% Revenue Growth in Q2 Fiscal Year 2024

Great Elm Group, Inc. (GEG) reported a notable increase in financial performance for the second quarter of fiscal year 2024, with revenues reaching $3.5 million, a 24% increase from $2.8 million in the same period last year. For the six months ending December 31, 2024, total revenues amounted to $7.5 million, up 22% from $6.1 million in the prior year. The company attributed this growth primarily to the recognition of $1.2 million in real estate property sales, which were not present in the previous year, alongside a $0.6 million increase in management fees due to higher assets under management at Great Elm Capital Corp. (GECC).

Despite the revenue growth, GEG reported an operating loss of $1.98 million for the quarter, an improvement from a loss of $2.7 million in the same quarter of the previous year. The total operating costs and expenses decreased slightly to $5 million from $5.5 million year-over-year. The company’s investment management expenses rose to $3.4 million, reflecting increased personnel costs associated with business growth. However, selling, general, and administrative expenses saw a significant decline, dropping to $1.3 million from $2.4 million, as the prior year included one-time professional fees related to strategic initiatives.

In terms of strategic developments, GEG has been active in expanding its portfolio. The company recently formed Monomoy Construction Services, LLC, through the acquisition of Greenfield CRE, enhancing its construction management capabilities. This move is expected to bolster GEG's service offerings across its real estate verticals and expand its consulting business. Additionally, GEG's assets under management totaled approximately $751 million as of December 31, 2024, reflecting its ongoing efforts to grow its investment management operations.

Operationally, GEG's cash and cash equivalents stood at $44.3 million at the end of December 2024, down from $48.1 million at the end of June 2024. The company also reported a decrease in its investment in GECC, with the fair value of its holdings dropping to $15.8 million from $16.2 million. GEG's employee headcount has increased as the company continues to expand its operations, although specific figures were not disclosed in the filing.

Looking ahead, GEG remains focused on exploring additional investment management opportunities and other areas that promise attractive risk-adjusted returns. The company has indicated that it has sufficient liquidity to meet its short-term and long-term obligations for at least the next 12 months. However, GEG also acknowledged potential risks, including market conditions and competition from larger organizations, which could impact its future performance.