Great Elm Group Narrows Q1 Loss to $4.1M as Cash Hits $43M

Great Elm Group, Inc. (NASDAQ: GEG) reported a fiscal 2027 first-quarter net loss of $4.1 million on November 4, 2026, narrowing from a $7.0 million loss a year earlier, with total revenue of $3.3 million and cash and cash equivalents of $43.2 million at September 30, 2026. The Palm Beach Gardens-based alternative asset manager said its real estate arm, Monomoy REIT, deployed roughly $8.1 million of capital into four properties during the quarter while building an acquisition pipeline of nearly $90 million.

Context — why Great Elm's narrowing loss matters now

The company framed the quarter around what CEO Jason Reese called "the uneven cadence of certain real estate investment sales and headwinds in alternative credit." That cadence is visible in the revenue line: $3.3 million in the September 2026 quarter against $10.8 million a year earlier, a gap the company attributes almost entirely to roughly $7.4 million of prior-year revenue from the sale of a build-to-suit property.

Strip that one-time sale out and the comparison changes character. The prior-year quarter still carried $6.7 million of cost of revenues tied to that property, which the current quarter does not. Operating costs fell to $6.8 million from $7.8 million, and the operating loss narrowed only modestly, to $3.5 million from $3.7 million.

The larger swing came below the operating line. Net realized and unrealized losses on the company's investments totaled $0.8 million in the quarter, against $2.9 million a year earlier, plus a further $1.8 million of consolidated-fund investment losses in the prior-year period that did not repeat. That compression, not revenue, is what drove the headline loss improvement.

Great Elm's own framing centers on fee-paying assets under management, or FPAUM, which stood at roughly $564 million at quarter end, with total AUM of about $760 million. The company said both figures declined, by 5% and 3% respectively, compared with the prior-year period, and did not quantify the dollar decline.

Management's stated priorities are growing recurring fee revenue and expanding fee-paying AUM across credit, real estate, specialty finance and other alternatives. The quarter shows those two engines moving in opposite directions, with real estate fees rising while total fee-paying assets shrink.

Data — what Great Elm's first-quarter numbers show

Revenue fell 69% year over year, to $3.3 million from $10.8 million. Net loss narrowed 41%, to $4.1 million from $7.0 million, and net loss per basic share improved to $0.14 from $0.24.

Adjusted EBITDA, a non-GAAP measure the company reconciles to net loss in its release, was negative $0.9 million, compared with negative $0.5 million a year earlier. The company's reconciliation adds back $1.1 million of non-cash compensation, $1.1 million of interest expense, $0.3 million of depreciation and amortization, and $0.8 million of investment losses.

Metric	Q1 FY2027	Q1 FY2026
Total revenue	$3.3M	$10.8M
Net loss	$(4.1)M	$(7.0)M
Adjusted EBITDA	$(0.9)M	$(0.5)M
Fee-paying AUM	~$564M	-5% YoY
Total AUM	~$760M	-3% YoY

On the balance sheet, cash and cash equivalents fell to $43.2 million from $53.5 million at June 30, 2026. Total assets were $110.0 million against $113.7 million, and total stockholders' equity declined to $36.6 million from $40.8 million.

Within the credit segment, Great Elm received $1.0 million of management fees from Great Elm Capital Corp. GECC's net asset value was $7.40 per share at September 30, 2026, down $0.55 from $7.95 at June 30, including $0.24 per share of loss tied to its CLO formation joint venture. GECC redeemed $6.5 million of its notes during the quarter.

On the real estate side, Monomoy CRE collected roughly $1.1 million in investment and property management fees, up about 18% year over year. Monomoy Construction Services generated $0.7 million of revenue in its sixth full quarter of operations.

Analysis — what the quarter means for GEG holders

The second-order read sits in the credit segment. GECC's net asset value decline of $0.55 per share feeds directly into Great Elm's investment portfolio, where net realized and unrealized losses on GECC common stock and related SPVs totaled $0.5 million in the quarter. Because Great Elm both manages GECC and holds its equity, a softer credit mark pressures fee revenue and book value at the same time.

Real estate is the offsetting leg. Monomoy REIT's four acquisitions and roughly $8.1 million of deployed capital, plus a pipeline the company pegs at nearly $90 million of potential investments, point to a segment scaling faster than credit is shrinking. Fee growth of 18% at Monomoy CRE is the clearest evidence the platform can add recurring revenue without new balance-sheet capital.

A counter-argument deserves weight. Adjusted EBITDA deteriorated year over year even as the net loss narrowed, which means the improvement came from mark-to-market swings rather than operating earnings. Investment gains and losses reverse; fee streams do not. On the company's own numbers, the recurring-revenue base has not yet replaced what the prior-year quarter earned from a single property sale.

The CoreWeave-related equity stake offers a separate data point. Great Elm received $0.7 million of distributions in the quarter, taking cumulative distributions to roughly $8.6 million against an original $5.0 million investment, which the company describes as carrying additional upside potential.

Positioning is visible in the buyback. Great Elm repurchased about 266,000 shares at an average of $2.20 in the quarter, its twelfth consecutive quarter of repurchases. Cumulative repurchases since program inception reached roughly 8.4 million shares at an average of $2.01, or $16.8 million, leaving $23.2 million of capacity under the $40 million authorization as of October 30, 2026.

Outlook — what to watch for Great Elm Group

The company will host a conference call on November 5, 2026 at 8:30 a.m. Eastern Time, with a slide presentation published alongside the webcast. Management has not issued numeric guidance for the fiscal year, so the call is the next scheduled opportunity for detail on fee-paying AUM trends and credit marks.

Three items carry the most weight. First, whether Monomoy REIT converts any portion of the nearly $90 million pipeline into closed acquisitions, which would show up in future deployment figures. Second, whether GECC's net asset value stabilizes after the $0.55 per-share quarterly decline. Third, whether fee-paying AUM resumes growing after the 5% year-over-year contraction.

The buyback is the fourth variable. With $23.2 million of remaining capacity and roughly $43 million of cash, the company retains room to keep repurchasing, though it has not disclosed pacing plans for the remainder of the fiscal year.

Frequently Asked Questions

What does Great Elm Group's Q1 loss mean for retail investors?

The $4.1 million net loss reflects a business mid-transition rather than a collapse. Revenue fell because the prior-year quarter included a $7.4 million build-to-suit property sale that did not repeat, while investment losses shrank to $0.8 million from $2.9 million. The company holds $43.2 million of cash and repurchased shares for a twelfth straight quarter. The report is informational; it contains no recommendation on the stock.

Why did Great Elm's revenue drop 69% year over year?

The company attributes the decline to timing. Its prior-year quarter included roughly $7.4 million of revenue from selling a build-to-suit property, which also carried $6.7 million of associated cost of revenues that the current quarter lacks. Excluding that sale, revenue still fell, with fee-paying AUM down 5% and total AUM down 3% year over year. The company did not quantify the decline excluding the property sale.