B. Riley Financial Reports Second Quarter 2023 Results; Quarterly Dividend of $1.00 per share Payable August 21, 2023

Reaffirms Q3 2023 Guidance for Operating Adjusted EBITDA of at least $105 million

LOS ANGELES, Aug. 9, 2023 /PRNewswire/ -- B. Riley Financial, Inc. (NASDAQ: RILY) ("B. Riley" or the "Company"), a diversified financial services platform, today released results for the three-month and six-month period ending June 30, 2023. The Company has also reaffirmed its guidance for operating adjusted EBITDA⁽³⁾ of at least $105 million for the third quarter of 2023.

Highlights for the Three Months Ended June 30, 2023

• Total revenues increased 191% to $406.3 million vs. $139.6 million in prior year quarter
• Net income attributable to the Company of $46.4 million
• Net income available to common shareholders of $44.4 million, or $1.55 diluted earnings per share (EPS)
• Operating Revenues⁽²⁾ of $363.9 million
• Operating Adjusted EBITDA⁽³⁾ of $80.2 million
• Total Adjusted EBITDA⁽¹⁾ of $139.9 million

Highlights for the Six Months Ended June 30, 2023

• Total revenues increased 117% to $838.4 million vs. $386.5 million in prior year six-month period
• Net income attributable to the Company of $63.5 million
• Net income available to common shareholders of $59.5 million, or $2.05 diluted EPS
• Operating Revenues⁽²⁾ of $744.4 million, up from $523.5 million in prior six-month period
• Operating Adjusted EBITDA⁽³⁾ of $160.3 million
• Total Adjusted EBITDA⁽¹⁾ of $234.7 million

Reaffirmed Q3 2023 Guidance

• Expects Operating Adjusted EBITDA⁽³⁾ of at least $105 million for the third quarter of 2023

Bryant Riley, Chairman and Co-Chief Executive Officer of B. Riley Financial, commented: "On a consolidated basis, our platform delivered solid results for the second quarter despite another challenging capital markets period with nominal contribution from investment banking. We expect a strong third quarter based on a meaningful increase of client activity across capital markets, retail liquidation, consulting, and appraisal. Our overall business is at a near-term inflection, and we are encouraged by our current momentum and the opportunities we see ahead."

Tom Kelleher, Co-Chief Executive Officer of B. Riley Financial, added: "Market dynamics have created a favorable environment for us to recruit talent to provide incremental value to our clients and existing team. During the quarter, we expanded our consumer and TMT industry vertical coverage through the addition of multiple senior investment bankers and strategic hires in our equity research division. In addition, we recently acquired two practices to extend our core restructuring and forensic litigation advisory services in new markets, including Charlotte and Detroit. We will continue to invest in our people and platform to meet growing client demand and to capitalize on our momentum."

Financial Summary

Certain of the information set forth herein, including Adjusted EBITDA⁽¹⁾, Operating Revenues⁽²⁾, and Operating Adjusted EBITDA⁽³⁾, may be considered non-GAAP financial measures. Information about B. Riley Financial's use of non-GAAP financial measures is provided below under "Use of Non-GAAP Financial Measures."

For the three months ended June 30, 2023:

• Net income attributable to B. Riley Financial was $46.4 million for the second quarter of 2023.
• Net income applicable to common shareholders was $44.4 million, or $1.55 diluted EPS.
• Total revenues increased 191% to $406.3 million, up from $139.6 million in the prior year quarter.
• Total adjusted EBITDA⁽¹⁾ of $139.9 million compared to ($135.8 million) in the prior year quarter.
• Operating revenues⁽²⁾ increased 41% to $363.9 million, up from $257.4 million in the prior year quarter.
• Operating adjusted EBITDA⁽³⁾ increased 8% to $80.2 million, up from $74.2 million in the prior year quarter.

For the six months ended June 30, 2023:

• Net income attributable to B. Riley Financial was $63.5 million for the six-month period ended June 30, 2023.
• Net income applicable to common shareholders was $59.5 million, or $2.05 diluted EPS.
• Total revenues increased 117% to $838.4 million, up from $386.5 million during the first half of 2022.
• Total adjusted EBITDA⁽¹⁾ of $234.7 million for the first half of 2023 compared to ($95.1 million) in the first six months of 2022.
• Operating revenues⁽²⁾ were $744.4 million for the first half of 2023, up from $523.5 million for the same prior year period.
• Operating adjusted EBITDA⁽³⁾ of $160.3 million for the first half of 2023, up from $158.4 million in the same prior year period.

Increased revenues for the three- and six-month periods ended June 30, 2023 were primarily driven by investment gains⁽⁴⁾; the recent acquisitions of Targus, Lingo and BullsEye Telecom during 2022; increased revenues from retail liquidation, financial consulting and appraisal; in addition to an increase in interest income from loans and securities lending. Investment gains⁽⁴⁾ were $42.4 million for the quarter, and $93.9 million for the first six months of 2023, which reflected both realized and unrealized gains and losses on strategic investments held by the Company.

Segment Financial Summary

For the three months ended June 30, 2023:

• Capital Markets segment revenues increased to $162.1 million, up from $1.3 million in the same prior year period. Segment income increased to $77.7 million compared to a segment loss of ($61.3 million) in the prior year quarter. Excluding investment gains⁽⁴⁾ of $41.9 million, Capital Markets segment operating revenues⁽²⁾ were $120.2 million. Segment operating income⁽⁷⁾ was $37.3 million for the second quarter of 2023.
• Wealth Management segment revenues decreased to $47.7 million from $62.4 million in the prior year quarter, reflecting the strategic realignment of this business throughout 2022. B. Riley Wealth had over $24 billion of client assets under management as of June 30, 2023.
• Auction and Liquidation segment revenues increased to $10.6 million, up from $3.9 million in the same prior year period primarily due to an increase in the size of retail fee liquidation engagements. Segment income was $4.2 million compared to $0.5 million in the prior year quarter. Results for this segment vary from quarter-to-quarter and year-to-year due to the episodic impact of large retail liquidation engagements.
• Financial Consulting segment revenues increased 28% to $31.2 million, up from $24.3 million in the prior year quarter. Segment income increased 94% to $8.3 million, up from $4.3 million in the same prior year period. Increased bankruptcy restructuring and litigation consulting and appraisal activity contributed to another record performance for this segment during the second quarter of 2023.
• Communications segment revenues increased to $85.0 million, up from $41.9 million in the prior year quarter, primarily driven by the acquisitions of Lingo and BullsEye Telecom in May and August of 2022, respectively. On a combined basis, communications businesses – magicJack, United Online, Marconi Wireless, Lingo and BullsEye Telecom— generated segment income of $10.0 million for the second quarter of 2023.
• Consumer segment revenues increased to $60.1 million, up from $5.2 million in the prior year quarter. The significant increase in segment revenues was primarily related to the acquisition of Targus, which was completed in the fourth quarter of 2022.

For the six months ended June 30, 2023: