Great Elm Group Swings to Profit in Q4

Key Points

• Great Elm Group (NASDAQ:GEG) reported a swing to $15.7 million in GAAP net income from continuing operations for Q4 FY2025, compared to a loss in the prior year.

• Book value per share surged 24% year over year in FY2025, driven by unrealized gains and asset appreciation.

• Quarterly revenue declined to $5.6 million in Q4 FY2025 due to the absence of a large property sale, despite underlying fee growth.

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Great Elm Group (NASDAQ:GEG), an alternative asset management company with a focus on credit and real estate, released its financial results for the quarter ended June 30, 2025, on September 2, 2025. The company posted net income from continuing operations (GAAP) of $15.7 million, a marked turnaround from the $0.6 million loss reported for Q4 FY2024. Revenue fell to $5.6 million from $8.9 million in Q4 FY2024, as the prior year included a one-time property sale. Adjusting for this, fee-related revenue showed strong growth. Book value per share was $2.651 as of June 30, 2025, up 24% from the prior year end. Overall, the quarter demonstrated significant profit improvement, solid fee income expansion, and ongoing capital activity, albeit with a headline decline in revenue due to the absence of major property transactions.

Business Overview and Recent Focus

Great Elm Group specializes in managing alternative investments, primarily through credit and real estate assets. It operates by generating recurring fees from assets under management (AUM), including management, property management, and incentive fees. The company's success hinges on its ability to grow AUM, maintain steady investment vehicle performance, and diversify earnings through strategic acquisitions and fee-based services.

Recently, the company has centered its efforts on expanding fee-paying AUM and launching new product lines, particularly in its real estate segment. Strategic partnerships like those established with Kennedy Lewis Investment Management have brought fresh capital and enhanced the reach of Great Elm’s platforms. Execution on acquisitions, such as integrating Greenfield CRE and expanding the Monomoy real estate operations, is seen as pivotal to future growth. The ability to draw in institutional partners and deploy capital into diversified vehicles is considered a key factor for ongoing success.

Quarter Highlights and Key Developments

In Q4 FY2025, Great Elm Group achieved record net income (GAAP), driven by unrealized returns from its investment in CoreWeave and appreciation in shares of its listed credit vehicle.

Headline revenue was lower in Q4 FY2025 compared to the prior year, due to the absence of a one-time $6.6 million property sale in Q4 FY2024. Excluding that sale, revenue growth over the prior-year period exceeded 140%, primarily driven by record management and incentive fees and new construction fee revenue. Management and incentive fees from the credit platform reached $3.8 million in Q4 FY2025, up 253% from the same period last year, driven by robust performance and increased assets under management. Construction fees also emerged as a new revenue stream, with the Monomoy Construction Services business contributing $0.5 million in Q4 FY2025, its first reported quarter.

Asset management and investment growth continued, with fee-paying AUM up 5% to $553 million and total AUM reaching $759 million as of Q4 FY2025. The company’s main managed vehicle, Great Elm Capital Corp. (GECC), raised $76.6 million in new capital during FY2025 and delivered record investment income for its shareholders. The launch of a $100 million at-the-market (ATM) equity program and increased capital access for Monomoy REIT through a $150 million commitment from KLIM demonstrate the company’s deepening footprint in both credit and real estate platforms.

Shareholder return was another area of activity. Great Elm Group repurchased approximately 5.1 million shares at an average price of $1.85, totaling $9.3 million as of September 1, 2025. The board authorized an additional $5 million in repurchases, leaving $15.7 million currently approved. The company also completed transactions with new investors in July and August 2025, including a $9.0 million equity placement with Woodstead Value Fund and a strategic infusion from KLIM, which acquired a 4.9% stake in Great Elm at $2.11 per share. These deals expand the company’s capital resources and bring board representation with substantial asset management experience.

Outlook and Looking Ahead

Management did not provide formal financial guidance for the upcoming quarters or full year. However, it noted the company’s strong operating and capital position following recent partnerships and asset management vehicle success. The board has been expanded to include additional expertise in real estate and credit, positioning the company to seek further platform expansion and disciplined capital deployment.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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