B. Riley Financial, Inc. - 6.50 (RILYN) Q3 2026 Earnings Report, Transcript and Summary

Good afternoon, and welcome to the BRC Group Holdings Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Bryant Riley, Chairman, Founder and Co-CEO. Mr. Riley, please go ahead.

Good afternoon, everyone, and thank you for joining us today. With me today are Tom Kelleher, our Co-CEO; and Scott Yessner, our Chief Financial Officer. I want to start with our corporate strategy before we review the quarter. We spent the last year deliberately repositioning our balance sheet and business, redeploying capital into durable operating businesses that generate cash flow. Earlier this week, we completed the sale of our remaining interest in GA Group, a non-core legacy business that generated significant value for our shareholders over more than a decade. Monetizing GA reduced debt, added liquidity and supports our pending acquisition of Sangoma. Between the GA proceeds, cash generated by our operating businesses and anticipated realizations from our carried interest, we expect to fund both the Sangoma acquisition and the redemption of our senior notes due December 2026 without needing to sell long-term investment positions in a dislocated market. Sangoma is a business communications provider that fits squarely with our existing communications platform and will bring meaningful scale, recurring revenue and clear opportunities for operating synergies. Sangoma's management team has built a strong, resilient business, and we believe we are acquiring it at an attractive valuation. We know this business model well. Since acquiring United Online in 2016, we have built our Communications portfolio by applying and integrating magicJack, Marconi Wireless, BullsEye and Lingo. We have consistently converted their revenue into cash, generating $52.5 million of operating income over the last 12 months and growing income again this quarter. We also restored 100% ownership of B. Riley Securities in October, and we are advancing its integration with B. Riley Wealth under a shared infrastructure to create a simple -- simpler, more efficient platform. Turning to the quarter. Our headline results were weighed down by a few specific items, and I want to be clear about the drivers. Mark-to-market declines in our investment portfolio drove a GAAP net loss, principally our position in Babcock & Wilcox, which accounted for roughly $227 million of pretax losses. We also recorded a $14.6 million noncash impairment to align our GA's investment carrying value with its sales price. Excluding B&W, the rest of our securities portfolio generated net gains of $4.8 million. Our investment approach remains deliberate, focused on selective longer and shorter duration opportunities that support our client franchise. We also continue to redeploy capital, convert our loan book to cash collecting roughly $36 million in loan repayments on receivables this quarter. Operating adjusted EBITDA was $2.9 million. Two specific items reduced that figure by $17.4 million. The reversal of the second quarter unrealized gain on the structured equity financing that we exited for cash in Q3 and a noncash net markdown of our SpaceX carried interest. Scott will walk through the mechanics. Through the first 9 months, operating adjusted EBITDA was $103.3 million, and our year-to-date GAAP net loss was $13.2 million. In Capital Markets, the third quarter was a volatile period for small and mid-cap issuers, as rising rates, wider credit spreads and a pullback in the Russell 2000 weighed on deal activity and concentrated equity issuance among the larger names. We believe the continued wholesale sell-off in small-cap companies, particularly in technology and the dislocation associated with it, make it incumbent on us to be there 24/7 for our clients across Capital Markets, Advisory, Wealth Management, and fully across our platform. Our nearly 30-year dedication in small-cap companies has been unwavering and will continue to be. During the quarter, we helped clients raise north of $4.5 billion in combined equity and debt capital. Smaller average deal sizes across the small and mid-cap market and lower ATM activity tempered underwriting fee revenue relative to deal volume, but M&A and advisory revenues grew year-over-year, led by sell-side and restructuring mandates. We also continue to invest in people who drive the franchise. We have added senior banking talent and our research platform now covers more than 430 companies. In a quarter when investor attention concentrated in the larger names, that depth of small and mid-cap coverage is what keeps us relevant to the issuers and investors we serve. At Wealth Management, advisory fees grew year-over-year as we continue expanding our recurring revenue base. We head into year-end with a clear strategy, streamlined operations and active pipeline across equity, debt and M&A advisory and the capital base and partnership to support our clients as those opportunities develop. We look forward to demonstrating the full capabilities of our platform at our Convergence Conference in December. Our focus remains on execution and disciplined capital allocation to deliver for our colleagues, clients, partners and shareholders. With that, I'll turn the call over to our CFO, Scott Yessner, to provide a detailed review of our financial performance. Scott?

Thanks, Bryant. I'll share an update on our third quarter and year-to-date 2026 financial performance, segment earnings, investment holdings, capital and liquidity. As Bryant highlighted, we executed on several important corporate strategies from July through this week while also experiencing a volatile market, which had a downward impact on some mark-to-market positions and constrained capital markets transaction activity. The third quarter market decline gave back some market gains achieved in the first half of 2026, which aligns with the volatile third quarter performance while the 9-month results are flatter. Operating adjusted EBITDA, which removes most of the market and investment volatility, is a primary performance measurement of management. To start, I would like to walk through our financial performance for the third quarter and 9 months of 2026. For the third quarter, total revenues were $33 million, a decrease of $244.8 million year-over-year, primarily driven by an unrealized third quarter loss in Babcock & Wilcox of $128.6 million compared to a $30.2 million prior period fair value gain. Included in total revenues was service and fee revenues of $112.5 million, which decreased $58.2 million year-over-year, further comprised of $28.9 million decrease from lower ATM, private placement and underwriting fees, partially offset by $6.3 million in higher M&A and advisory fees, lower management fees of $13 million from carried interest in funds that own SpaceX and lower commissions and a $5.5 million lower amount of telecom revenues. Nine-month total revenues were $624.2 million, a decrease of $65 million year-over-year. Service and fee revenue was $438.2 million, a decrease of $37.1 million, comprised of $15.1 million in lower revenues from exited and deconsolidated businesses, net of $7.7 million of increase in SpaceX carried interest, $20.9 million in lower ATM, private placement and underwriting fees, partially offset by $12.9 million in higher M&A and advisory fees, and $13.5 million in lower telecom revenues. Trading gains were $33.5 million, lower by $31 million due to $7.8 million in unrealized losses on Babcock & Wilcox compared to a $19.6 million unrealized gain in the prior year period. Next, third quarter total operating expenses declined $39.7 million from $212.5 million to $172.7 million. The reduction was driven by $29.5 million in lower SG&A costs, primarily lower investment banking compensation on lower revenues and lower cost in Wealth Management. $6.1 million in lower cost of goods sold, primarily from lower Consumer Products sales and tariff refunds, and $4.2 million in lower direct cost of services in our telecom businesses. Year-to-date total operating expenses declined $101.7 million from $674.5 million to $572.8 million, driven by $71.5 million in lower SG&A costs across Capital Markets, Corporate and Wealth Management, $19 million in lower direct cost of services from exited businesses and telecom, and $14.2 million in lower cost of goods sold, primarily in the Consumer Products segment. Included in our year-to-date results are restructuring charges of $1.9 million related to the B. Riley Securities and Wealth combination, and Targus tradename impairment charges of $5.2 million, including $1.2 million in the third quarter. Continuing down the income statement. Third quarter other income, excluding interest expense, was a loss of $111.8 million compared to income of $52 million in the third quarter of 2025. The third quarter 2026 included a $98.1 million unrealized loss on our Babcock & Wilcox investment and a $14.6 million noncash impairment on our GA Group investment to reflect its subsequent sale price, while the third quarter of 2025 included $32.8 million in realized annualized investment gains, $12.2 million in senior note exchange gains and $9.2 million in income for equity investments. Year-to-date, other income, excluding interest expense, was $1.5 million compared to $208.3 million in the first 9 months of 2025, which included $86.2 million from the sale of and deconsolidation of businesses, $67.2 million in senior note exchange gains and $34.2 million in income from equity investments. Interest expense declined $1 million from $18.8 million to $17.8 million in the third quarter and declined $17 million from $72.7 million to $55.7 million year-to-date. The decline in interest expense has tracked our total debt reduction of $291.7 million from December 31, 2025, to the ending balance of $1.1 billion at September 30, 2026. We recorded an income tax benefit of $24 million in the third quarter and concluding, the remaining difference in the third quarter and year-to-date year-over-year financial performance was $1.9 million from loss of a discontinued GlassRatner operations booked in 2025. These details culminate in a third quarter 2026 net loss available to common shareholders of $243 million, a diluted loss per share of $6.04, adjusted EBITDA of negative $219 million and operating adjusted EBITDA of $2.9 million. For the 9 months of 2026, a net loss of $13.2 million, a diluted loss per share of $0.40, adjusted EBITDA of $104.3 million and operating adjusted EBITDA of $103.3 million. Operating adjusted EBITDA is on plan for the year. Next, I'll review our segment operating performance. Our former Communications segment is reported as 4 reportable segments, which we aggregate and describe as the Communications Business Group in 2026. The Capital Markets segment, which is comprised solely of B. Riley Securities had revenues of negative $90.2 million and segment loss of $120 million in the third quarter and revenues of $135.6 million and segment income of $30.3 million year-to-date. Third quarter results were driven by $125 million in trading losses, primarily the unrealized loss on our Babcock & Wilcox investment and a $28.9 million decline in service and fee revenue on lower ATM, private placement, underwriting activity, partially offset by higher M&A and advisory fees. Year-to-date, lower trading gains and lower ATM, private placement and underwriting fees were partially offset by $12.5 million in higher M&A and advisory fees and $30.9 million in lower SG&A. In October, B. Riley Corporation acquired the outstanding minority interest in B. Riley Securities, making B. Riley Securities wholly owned. Next, the Wealth segment had revenues of $24.3 million and segment loss of $3.7 million in the third quarter. And revenues of $134.5 million and segment income of $29.8 million year-to-date. The third quarter loss reflected an $8 million decrease in management fees from carried interest in funds that own SpaceX, a $5.9 million decrease in commissions and lower trading income, partially offset by higher investment advisory fees. The year-to-date 2026 revenue and profit increase were driven by a $7.7 million increase in trading income and $16 million in lower SG&A costs. The Wealth segment ended the third quarter with $12.8 billion in assets under management and 181 financial advisors. Next, the Communications Business Group had aggregate revenues of $54.6 million and income of $13.2 million in the third quarter, and revenues of $172.2 million and income of $39.7 million year-to-date. Nine-month income increased $5.1 million despite a $14.9 million revenue reduction, reflecting cost reductions across the group. In September, we announced the Sangoma acquisition, which is targeted to close in January 2027. The Sangoma transaction will more than double our revenues with significant synergies bringing important scale and product and service capabilities. We look forward to updating the transaction next quarter. Next, our Targus business, which comprises the Consumer Products segment, had revenues of $39.3 million and a loss of $4.3 million in the third quarter. And revenues of $126.9 million and a loss of $12.7 million year-to-date. Year-to-date revenues were $5.4 million lower than the prior year, reflecting weaker consumer demand, partially offset by lower sales allowance and customer programs. During the third quarter, there was a market-wide laptop sales decline that led to lower sales of our peripheral laptop products. Next, I would like to provide an update on the company's investment holdings portfolio, which is reported on our balance sheet in securities and other investments owned, loans receivable at fair value and equity investments. Investments are held across consolidated entities where valuation changes are primarily booked as revenue in either trading gains or losses or in other income as realized and unrealized gains and losses. At September 30, 2026, securities and other investments decreased by $77 million to $369.8 million from December 31, 2025. The decrease was primarily driven by the exit of structured equity financing positions and related common stock of $41.1 million and $12.1 million. The sale of DoubleDown Interactive common stock of $30 million and net dispositions of corporate bonds of $19.8 million and a $13.7 million increase in our Babcock & Wilcox investment, partially offset by a $31.3 million increase in partnership interest related to the market value of carried interest in funds that own SpaceX and $9.7 million in net additions to other public equities. Babcock & Wilcox comprised $160.3 million of the September 30 balance. Continuing with investment holdings, loans receivable at fair value decreased by $15.5 million in the period to an ending balance of $10.8 million at September 30, 2026, with a reduction of $9.8 million of our loan to XBP Americas. We have shifted our lending strategy to shorter duration lending in support of our investment banking clients. Notably, we originated a $21.5 million loan in the second quarter, which was repaid in the third quarter. Lastly, equity investments were $68.1 million at September 30, a decline of $22.4 million from December 31, 2025. The GA Group investment comprised $62.3 million at the September 30 balance, a decline of $21 million, reflecting our $6.5 million share of the year-to-date losses and the $14.6 million impairment booked in the third quarter. On November 3, we sold GA Group for $62.3 million, facilitating debt reduction and funding the Sangoma transaction. These transactions reflect our corporate strategy to enhance our operating cash flow and results through realigning capital to our core business operations, including the Communications Business Group and B. Riley Securities. Next, I'll provide an update on our liquidity and capital. At September 30, 2026, cash, cash equivalents and restricted cash had a total balance of $145.7 million compared to $229.3 million at December 31, 2025. Year-to-date, we reduced total debt by $291.7 million, which included the full redemption of the $238.1 million senior notes comprised of $96 million of RILYK notes in March, $142.1 million of RILYN notes in September and the exchange of $69.1 million of senior notes for approximately 8.4 million shares of common stock, partially offset by $25.6 million in higher revolver borrowings. At September 30, 2026, total debt was $1.14 billion and net debt declined $64.7 million to $562.3 million from December 31, 2025. Concluding our 2026 senior note redemptions, our RILYG senior notes are due on December 31, in the principal amount of $164 million. We have cash on hand, cash flow from operations and expected cash flows from balance sheet assets to fund the RILYG redemption. We do not have any senior note maturities in 2027. As described earlier, on November 3, we completed the sale of our remaining interest in GA Group to Oaktree for $62.3 million, consisting of $10.6 million in cash and a $51.7 million reduction of our Oaktree loan. Concurrently, we added a $26.5 million incremental term loan and paid a $3.3 million transaction fee in kind. There are no remaining prepayment fees on the Oaktree loan. After these transactions, our Oaktree loan total amount will be $43.7 million. Please refer to our earnings press release for reconciliation tables and descriptions of non-GAAP calculations in my remarks, including an updated calculation and description of our operating adjusted EBITDA non-GAAP measure. We had very strong strategic execution during this period, purchasing Sangoma, acquiring the minority interest in B. Riley Securities holding, returning to full ownership, selling our GA Group remaining interest and redeeming $142.1 million of RILYN notes, while navigating a volatile capital market period. These strategies strengthened our long-term cash flows and operating model while improving our balance sheet. I look forward to taking your questions. I'll turn the call over to Tom Kelleher, our Co-Chief Executive Officer.

Thanks, Scott. I'll now walk through some of the operating highlights across our businesses. In Capital Markets, our banking business leaned on breadth. Advisory fees came from a restructuring and two sell-side assignments, and we were active on follow-ons across technology and health care and on a critical minerals IPO. While the market favored larger issuers, companies with a public currency continue to access the market through follow-ons, converts and debt, and as a result, our convertible and debt activity is at a record 9-month pace. Our position in deals continues to improve with sole and lead managed volume up 20% year-to-date. Institutional brokerage held steady and securities lending revenue stayed near its second quarter high. Our recruiting pipeline remains active across banking and institutional sales, including the recent addition of 2 senior bankers. In Wealth Management, reported results gave back part of the carried interest gains recognized earlier in the year, but the core business is building. Advisory fees grew 11% year-over-year in the third quarter and reached a 12-month high in September, and we are growing our tax and accounting into a year-round advisory offering. Operationally, the integration of B. Riley Securities and B. Riley Wealth is moving from planning to execution. We've consolidated key corporate and back-office functions onto shared infrastructure while rolling out firm-wide AI tools that automate internal reporting and support our banking, research and wealth teams, creating a more scalable operating platform. Our Communications Business Group, which includes Lingo, magicJack, Marconi Wireless and United Online, delivered another quarter of income growth on lower revenue, which is exactly the playbook, manage attrition, take out costs and convert revenue to cash. The group continues to track ahead of budget for the full year. Our pending acquisition of Sangoma extends that playbook, as contemplated, bringing on a recurring revenue base that complements Lingo and our existing business services, and it gives us the scale to apply the same operating discipline across a larger platform. The transaction is expected to close early next year, subject to customary closing conditions. Finally, in the Consumer Products segment, Targus faced weaker consumer demand in the third quarter. Tariff refunds helped cost of goods sold and the team relocated to a new corporate site to lower its long-term cost base. Our focus across every operating subsidiary is consistent cash generation, and we continue to evaluate the optimal path forward to maximize value at Targus. Before we open the line, I want to thank our colleagues, the strength of this platform is a direct reflection of your hard work, resilience and dedication to our clients, both internal and external. I will now hand the call back to the operator to open the line for questions.

Our question comes from Kirk with Raymond James.

I was -- I know, Scott, you touched on the fourth quarter cash requirements. I just wanted to make sure I have all the pieces here. It looks like the cash on hand at September 30, plus the proceeds from the sale of Great American, gets you to about $180 million on a pro forma basis of cash. And it looks like you have at least $200 million of cash requirements, the debt maturity and the equity that you're contributing to the Sangoma acquisition, and I suspect you have some minimum cash requirements. So I'm just curious how maybe you could help us understand how those pieces fit.

Thank you so much for the question. You did do a nice job of piecing those parts together. So our initial cash and some of the cash that we accrued from the GA Group sale proceeds and then stepping forward to our cash flow requirements, which for the listeners on the call, that was a nice combination of the cash we're going to -- equity we're going to put into the Sangoma transaction early in January and then the $164 million redemption of our notes. In between that, as we have -- as I described in my comments, I'll be more specific about it, we have a number of balance sheet fundings that are going to come through. And so that's going to add another up to $50 million of cash flow for us. And so we have a significant amount of resources. So without having to make any investment or balance sheet moves that we don't necessarily want to. We have all the resources we just described, including the SpaceX shares that are coming due to us and that's going to give us an additional up to $50 million of cash to support our funding needs through the end of the quarter.

Great. So your -- that SpaceX alone is $50 million? Or that's a combination of things?

Yes.

Okay. And have you already sold the SpaceX shares?

It's in -- it's the middle of the process of capturing. We've put on a small amount of hedge for some of the pricing volatility on SpaceX. But we still are due on delivery, a majority of the shares that we contractually can receive.

Great. And so you mentioned you don't have any more debt maturities until 2028, which is great. But how are you thinking about those maturities? And those are a lot more substantial. That's at least $800 million. Are you thinking about global refinancing, or an exchange or something even more creative?

Yes. Kirk, I'll start on that. And Scott, you can chime in. If you go back to a year ago and you review the transactions that took place, whether they were 3(a)(9)s, whether they were bond swaps, selling GA, all the different things. We don't make widgets, and we have a pretty steady business in telecom and a volatile business in our Capital Markets business, and we have some volatile investments. And so we -- what we will do is make sure that every different strategy is available to us. And most importantly is we will keep our heads down and create as much value within our subsidiaries and our investments during that time. And we can't give you -- I think we've said this before, the playbook. The playbook has changed 10x over the course of the last 12 months. We recognize that there's debt due. We recognize that we have investments. I think we -- 3 months ago, that net debt was $280 million. It's more now, but we'll just remain focused on generating cash flow, improving our investments and utilize whatever other things we can, working with our debt holders and our equity holders. Scott, feel free to add anything that I missed.

Thanks, Bryant. Yes, I think that answer covered all the elements to how we think about funding 2028 and beyond. The only thing I would add to that is just the strategic moves we've made just over the last 45 days, specifically Sangoma. Sangoma is going to add $35 million to $40 million of EBITDA to the business. And so when you think about '27 and '28, that's getting you now into $75 million to $80 million of additional cash flows. And so we're building on all the different elements to our business. We've created a great number of options. We've taken off a fairly illiquid legacy business in that GA Group, as we described earlier, to create more liquidity and cash flow for cash flow generating business in the firm. So I would just emphasize that deals like the Sangoma deal, which was not on anyone's radar as we would not have signaled that, are just all the different dimensions here. So we're going to be able to improve the operating performance of the company, and that's going to be a big factor in how we manage the balance sheet going forward.

That's helpful. So is the $35 million to $40 million of incremental EBITDA from Sangoma, I guess that includes synergies?

Yes.

Yes. I mean they've been -- you can look at their public statements, there's $28 million or $29 million trailing 12 and then public company costs and synergies, it's not hard to get there.

Okay. Great. Okay. I know you've also got some accounting and legal expenses that are probably still elevated from the restatements and other things. Can you maybe give us a sense for how much of those what you would consider excess professional fees flowed through in the September quarter and when you think those excess fees go away?

Yes, we were probably about $1.5 million to $2 million on the excess fees with all of the activity we just incurred. And so we would see -- we would expect in the fourth quarter to see those numbers come down roughly about that same number, $2 million. And then as you look into 2027, we're right now ranging between $5 million and $10 million of expected savings from accounting and legal costs. And on the accounting side, we are still going to carry a pretty decent-sized audit fee, not nearly as big as the ones we've been burdened with before, but we are working through a big group of material weaknesses, which does take cost. We're a non-widget company, so we do generate a lot of auditor activity in addition to the base audit. But as we get into 2027, as we've started stabilizing our financial operations, and we'll be able to, in 2027, pull down on the external resources, which are great. They're very sophisticated and help us on all these surge activities that we have. But it's a little bit more costly than we'd like. So that, along with our auditor will have a full year of walking down a clean audit with controls in place that allow them to rely more on our business, at least that's where we're headed to on that. And those are going to pull it down. So we're -- we have -- those are not -- those are the 80% likelihood to get those down. So we're hoping that we can do better than that in that $5 million to $10 million range of legal and accounting. That right there is about $5 million on the accounting side. And then on the legal fees, as we start working down to concluding matters on some of the legal activity on the business that we've been incurring in the last couple of years. We're expecting that to come down in addition to, we've moved to some more efficient legal cost models with Fred Knopf, who took over as the General Counsel. We moved in some different attorneys into different parts of our business that we're getting the [double bang for it]. We're getting a lot more resource at a lower cost, and that's driving a ton of execution. So we're refining that legal model, and that's how we get from picking up those accounting savings, which are roughly around $5 million-ish to potentially another $5 million in savings on the legal side. So somewhere between $5 million and $10 million is where we think about getting the accounting and legal fees down next year.

That's significant. Can we just touch on what I consider the core business for a sec, B. Riley Securities? Can you maybe give us a little more color as to the backlog and the trend there and how the composition of the backlog, how you feel about it?

Sure. So here in this business, there's long tail transactions. There's restructuring, which we've seen a big pickup. There's advisory, which is active. And then there's the things that you don't know about a day before or a month before, and that's usually around Capital Markets. I believe strongly that the market that we may -- that we're entering or may have entered and we all saw what happened today. We -- those are tailored for us being 1 of 9 underwriters on a convertible debt, we like that business. I think we're good at that. I think that a little bit more dislocation in the markets. I think lends to our experience in the small cap and being a little bit more creative. We're not middle of the fairway kind of a firm. I think we will think differently and we'll put transactions together differently. And I would say from a team perspective, I think this is the best team we've ever had. The bankers that we've recruited, the bankers that have come back. The bankers have been here for a long time. I'm really confident that in an environment like this, we will create a lot of market share. That's how we built the business. We didn't build the business in up 25% markets and really easy capital markets. So I'm not answering your question specifically quantitatively, but qualitatively, I'm really excited about the next 12 months and the next 3 months. So we'll see, but that's how I think about it.

Okay. Great. I appreciate it. And then one last question. On Page 80 of the 10-Q, there's something called other private equity investments, it's $92.4 million, sizable number. I was just curious if you could give us any color as to what's in there and how you account for that?

I don't know how we missed that in our commentary around the financials. Scott, do you want to pick that one up?

Yes. Yes. Yes. So that $92 million is our private holdings, essentially what we call our venture capital book, and that's the nature of those holdings are primarily venture capital at roughly $92 million. But just comments on the valuation, because they're venture capital positions, the mark-to-market on those are quite lumpy. You generally are only marking whenever there is a cap raise that you can reprice that to. So they can get kind of stale. So like a venture capital portfolio, there's -- you're going to have ups and downs in the nature of the holdings. We have some very exciting and interesting holdings in that portfolio that were -- we have the potential to get some nice realizations between '27 and '28. We're hoping it exceeds the $92 million balance we have there. That's why we're in those types of investments. And I think I'd probably describe it as, of the $92 million, the top 5 holdings are about $40 million of that. And these holdings are -- I think from a time duration standpoint, you're probably averaging between 4 and 5 years. And so they're getting closer to that stage when they could -- you're looking for liquidity events that we would ultimately be able to cash out on.

I will now turn the call back over to management for closing remarks.

Okay. Great. Well, there's a few things I want to acknowledge. First of all, the accounting team and all the accomplishments they've made and joking aside about the disclosure, and I think we're really providing a thorough disclosure. And hopefully, our constituents appreciate that. And the fact that we are reporting quarters on the 4th or 5th is a real testament to that team. To the telecom side, we're very excited about this acquisition. I know there's some Sangoma people on the call, and we're excited for that transaction, and all that will bring. And then on the Capital Markets, Wealth side, a lot of teammates here. This is -- I just want to emphasize, this is our time. Like we are made for these more difficult markets. So really excited to report those results to you as the year goes forward. And I appreciate everyone for taking the time. Thank you very much.

Thank you, Mr. Riley. Before we conclude today's call, I would like to provide the company's safe harbor statement. Please note that today's call contains forward-looking statements within the meanings of the Private Securities Litigation Reform Act of 1995. Statements are based on management's current expectations and beliefs, certain future developments and their potential effects on the company. Forward-looking statements involve risks and uncertainties, and actual results may differ materially from those expressed or implied. We encourage you to review the company's recent filings with the SEC, including the annual report on Form 10-K for the year ending December 31, 2025, as amended, and quarterly reports on Form 10-Q. For a more detailed discussion of the risk factors that could impact performance. The company assumes no obligation to update any forward-looking statements made during this call, except as required by law. Additionally, non-GAAP financial measures may have been discussed during this call. Reconciliations to the most directly comparable GAAP measures are included in the earnings release, which is available on the Investor Relations section of the BRC Group Holdings website. This conference has now concluded. Thank you for attending today's presentation. You may now disconnect.