Great Elm Group Q3 2025 slides: 15% revenue growth amid strategic expansion

Introduction & Market Context

Great Elm Group, Inc. (NASDAQ:GEG), an alternative asset manager focused on credit, real estate, and other alternative strategies, reported 15% revenue growth in its fiscal third quarter 2025 presentation released on May 8, 2025. The company continues to execute on its strategic expansion plans despite facing headwinds from unrealized investment losses.

The presentation highlighted the company’s progress in growing assets under management (AUM) and fee-paying AUM (FPAUM), which increased by 12% and 15% year-over-year, respectively. Great Elm ended the quarter with approximately $32 million in cash, positioning it for continued investment in its growing alternative asset management platform.

Quarterly Performance Highlights

Great Elm Group reported revenue of $3.2 million for the fiscal third quarter ended March 31, 2025, representing a 15% increase from $2.8 million in the prior-year period. This growth was primarily driven by increased revenue from real estate project management fees, rental income, and higher management fees from Great Elm Capital Corp . (NASDAQ:GECC).

As shown in the following financial highlights chart, the company reported a net loss from continuing operations of $4.5 million, compared to a net loss of $2.9 million in the same period last year. Management attributed this increased loss primarily to unrealized losses related to certain investment positions marked down at quarter-end.

Adjusted EBITDA for the quarter was $0.5 million, down from $1.2 million in the prior-year period, reflecting the impact of these investment losses.

The company’s asset management business continued to show strong growth momentum. As illustrated in the chart below, fee-paying AUM increased to $565 million as of March 31, 2025, up 15% from $493 million a year earlier. Total (EPA:TTEF) AUM grew to $768 million, representing a 12% increase from $688 million on March 31, 2024.

Strategic Initiatives

A key strategic development during the quarter was the February 2025 launch of Monomoy Construction Services, LLC (MCS) through the acquisition of Greenfield CRE, LLC and Monomoy BTS Construction Management, LLC. This acquisition creates a fully-integrated construction business that will serve Great Elm’s real estate verticals while expanding its third-party consulting business.

The following diagram illustrates how MCS fits into Great Elm’s broader real estate strategy, combining construction talent with in-house civil engineering and land planning capabilities:

Great Elm Group continues to focus on three main strategic areas as shown in the company overview below: Alternative Credit, Real Estate, and Other Alternative Strategies. This diversified approach allows the company to pursue multiple growth avenues while maintaining its focus on long-duration capital vehicles.

The company outlined its key goals in the presentation, focusing on improving profitability, expanding its platform, and growing AUM. Recent debt and equity capital raises at GECC are already driving growth in recurring fee revenue streams with high contribution margins.

Detailed Financial Analysis

Great Elm Group’s balance sheet remains solid, with $31.5 million in cash and $54.3 million in investments as of March 31, 2025. The company reported a book value per share of approximately $2.14, which exceeds the average cost of $1.84 per share for its ongoing share repurchase program.

The condensed balance sheet below provides a comprehensive view of the company’s financial position:

Through May 6, 2025, Great Elm has repurchased approximately 4.8 million shares for $8.7 million, demonstrating management’s confidence in the company’s intrinsic value and commitment to returning capital to shareholders.

In its managed vehicles, Great Elm highlighted strong performance from GECC, which generated record total investment income of $12.5 million in the quarter and increased its quarterly distribution by 5.7% to $0.37 per share. GECC also launched a $100 million At-the-Market equity program in May 2025, providing additional capital flexibility.

Forward-Looking Statements

Looking ahead, Great Elm Group remains focused on executing its three-pronged strategy of improving profitability, expanding its platform, and growing AUM. The recent launch of Monomoy Construction Services represents a significant step in expanding the company’s real estate platform.

In the alternative credit space, GECC’s continued capital raising success and the expansion of its CLO presence position the company for further growth. GECC paid management fees of $1.3 million and cash incentive fees of approximately $0.2 million to Great Elm Group for the quarter ended March 31, 2025.

Monomoy BTS closed on a land purchase for its third development property and made meaningful progress on its fourth project during the quarter. The company maintains a deep project pipeline, suggesting continued growth opportunities in its real estate segment.

With $32 million in cash available for deployment across its growing alternative asset management platform, Great Elm Group appears well-positioned to pursue additional strategic initiatives and investments in the coming quarters, despite the near-term challenges from investment losses.

Full presentation:

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