Beneficient — First Quarter Fiscal 2027 Earnings Summary

Financial Performance

• GAAP revenues were $12.2 million for the quarter ended June 30, 2026, compared to a loss of $12.6 million in the same period of fiscal 2026.
• Adjusted revenues were $15.9 million for the quarter ended June 30, 2026, compared to a loss of $12.6 million in the prior year period.
• GAAP operating loss was $0.4 million for the quarter ended June 30, 2026, a 99.4% improvement from a $92.6 million loss in the prior year period.
• Adjusted operating income was $5.7 million for the quarter ended June 30, 2026, compared to an adjusted operating loss of $25.4 million in the prior year period.
• Basic and diluted Class A EPS was $(0.47) for the quarter ended June 30, 2026, compared to $(57.55) in the prior year period.
• Operating expenses decreased 84.3% to $12.5 million in the quarter ended June 30, 2026, from $80.0 million in the prior year period; this included a $1.8 million loss contingency accrual in the current period versus a $62.8 million accrual in the prior year.
• Excluding loss contingency accruals and associated interest, operating expenses declined 37.4% to $10.8 million in the quarter ended June 30, 2026, from $17.2 million in the prior year period.
• Total investments at fair value increased 8.7% to $212.5 million as of June 30, 2026, from $195.5 million at the end of the prior fiscal year.
• Cash and cash equivalents were $5.6 million as of June 30, 2026, compared to $2.5 million as of March 31, 2026.
• Total debt was $96.8 million as of June 30, 2026.
• Ben Liquidity recognized $8.2 million in interest income, a 4.0% increase from the prior quarter.
• Ben Custody revenues were $2.5 million for the quarter, remaining flat sequentially from the prior quarter.
• Ben Custody operating income increased to $1.4 million from $0.5 million in the prior quarter.
• Net income attributable to Beneficient common shareholders was a loss of $6.8 million for the quarter ended June 30, 2026.

Guidance and Future Outlook

• Management stated the company is positioning for sustainable growth through a strengthened balance sheet, streamlined cost structure, and enhanced collateral base.
• The first collateral management services engagement with a Texas state-chartered bank is expected to generate recurring annual fee revenue.
• The company expects its loan portfolio to grow as it successfully executes on its core business of providing financing for liquidity or early investment exits.
• Forward-looking statements indicate expectations regarding demand for solutions in the alternative asset industry and opportunities for market growth.

Business Segments and Product Lines

• Ben Liquidity: Recognized $8.2 million in interest income (up 4.0% sequentially) driven by new originations of approximately $8.8 million in April 2026 and compounding interest. Operating income improved to $7.4 million from a $19.7 million loss in the prior quarter due to lower intersegment credit losses and positive NAV adjustments.
• Ben Custody: NAV of assets in custody increased to $234.6 million as of June 30, 2026, from $219.8 million as of March 31, 2026, driven by $15.9 million in upward NAV adjustments and $8.8 million in new originations. Operating income increased to $1.4 million from $0.5 million in the prior quarter, primarily due to the absence of a credit loss provision in the current period compared to a $1.0 million provision in the prior quarter.
• Corporate & Other: Reported a loss of $10.6 million for the quarter, an improvement from a $45.9 million loss in the prior quarter.
• New Engagement: Entered into its first collateral management services engagement with a Texas state-chartered bank for monitoring and reporting on alternative asset-backed financing transactions.
• Capital Commitments: Closed two primary capital commitments totaling more than $16 million, increasing the collateral for the ExAlt loan portfolio.
• Asset Sales: Completed asset sales or equity redemptions resulting in $57.6 million in cumulative gross proceeds since inception in the prior fiscal year through June 30, 2026, used to pay down debt and provide working capital.
• Subsequent Financing: Issued two promissory notes totaling $4 million subsequent to June 30, 2026, resulting in approximately $3.8 million in proceeds for working capital.

Market and Competitive Landscape

• The company operates in the alternative asset investment market, providing exit opportunities and primary capital solutions to underserved investors and General Partners.
• The ExAlt Loan portfolio is supported by collateral diversified across approximately 140 private market funds and 380 investments across seven asset classes, 11 industry sectors, and multiple geographies.
• The portfolio includes exposure to specific sectors such as Latin American retail, technology-enabled reforestation, mobile banking, passenger rail, and e-commerce.
• The company utilizes its patent-pending OptimumAlt endowment model to guide diversification of fiduciary financings.

Risks and Challenges

• Risks include the ability to consummate liquidity transactions on desirable terms or at all.
• Risks related to maintaining compliance with Nasdaq listing requirements and curing any future deficiencies.
• Risks associated with the outcome and timing of remaining GWG Holdings, Inc. litigation and related legacy matters.
• Risks that collateral management services may not perform as expected or generate revenue.
• Risks related to substantial costs and management diversion due to litigation and legacy matters.
• Risks related to the ability to scale operations and provide shareholder value.

Management Commentary and Tone

• CEO James Silk stated that first-quarter results showed an extension of the operating strategy with the new collateral management engagement and over $16 million in new primary capital commitments.
• Management expressed confidence in strengthening the balance sheet and positioning the company for sustainable growth.
• The tone reflects a focus on cost reduction, debt reduction, and increasing collateral and working capital.

Other Key Points

• The Company's subsidiary, Beneficient Fiduciary Financial, L.L.C., holds a charter under the State of Kansas' Technology-Enabled Fiduciary Financial Institution (TEFFI) Act.
• A 1-for-8 reverse stock split occurred on December 15, 2025, with periods presented adjusted to reflect this.
• ExAlt Holdings, a direct subsidiary of Beneficient, provided financing to the ExAlt Plan to fund new liquidity transactions; its net earnings attribute to common stockholders as it is not structurally subordinated to Beneficient Company Holdings, L.P.
• The total allowance for credit losses was $411 million as of June 30, 2026, against a total gross loan balance of $597 million.
• Distributions received from alternative assets held in custody totaled $1.9 million for the quarter, down from $3.7 million in the prior year period.
• Proceeds of $5.0 million were received from the disposition of certain investments in alternative assets during the quarter.