B. Riley Financial, Inc. (NASDAQ:RILY) Q3 2023 Results Conference Call November 8, 2023 8:30 AM ET
Company Participants
Bryant Riley - Chairman, Co-Founder & Co-Chief Executive Officer
Phillip Ahn - Chief Financial Officer & Chief Operating Officer
Tom Kelleher - Co-Founder and Co- Chief Executive Officer
Mike Frank - Corporate Development & Investor Relations
Conference Call Participants
Sean Haydon - Charles Lane Capital
Brett Hendrickson - Nokomis Capital
Operator
Good morning, and welcome to the B. Riley Financial's Third Quarter 2023 Earnings Call. My name is Britt, and I will be your call coordinator. Earlier this morning, B. Riley issued its third quarter earnings release. A copy of the release can be found on B. Riley's Investor Relations website at ir.brileyfin.com, or on the right side of your screen if you're joining us today via web. Today's call includes prepared remarks from the Company, which will be followed by a question-and-answer session with the management team.
Joining us today from B. Riley are Bryant Riley, Chairman, Co-Founder and CEO; Tom Kelleher, Co-Founder and Co-CEO; and Phillip Ahn, CFO and COO. After management’s remarks, we will open the line for questions. As a reminder, today's call is being recorded, and an audio replay of this call will be available later today. Finally, before we conclude today's call, I will provide the necessary cautions regarding forward-looking statements.
Now, I will turn the call over to Mr. Bryant Riley. Mr. Riley, you may proceed.
Bryant Riley
Welcome, everyone, and thanks for joining our call. During the quarter, we continued to execute our platform strategy, generating a meaningful amount of operating EBITDA, while at the same time, maintaining disciplined focus on balance sheet flexibility to pursue our continued growth. We generated operating adjusted EBITDA of $107.5 million for the third quarter of 2023, up 34% from Q2 and operating EBITDA of $267.8 million for the first nine months of 2023.
Net loss of $76 million was driven by investment losses, which were primarily unrealized and relates to changes in mark-to-market valuation on investments that we hold. As we noted before, our investment gains and losses for any particular period are not indicative of our overall business performance, and we have a high degree of confidence in these investments.
Our third quarter operating results highlighted strength across our platform with increased revenue and client activity levels picking up from earlier this year. To put this into perspective, our Q3 operating revenue was the highest quarterly total in our firm's history, and our Q3 operating EBITDA ranks third highest. On a year-to-date basis for the first nine months, our 2023 operating revenue also ranks highest, and operating EBITDA ranks second. This is a direct outcome of our strategy in the steps we've taken to change the relative mix of stable, lower-margin revenue versus episodic higher-margin revenue.