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BUSINESS SEGMENTS | 6 Months Ended
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Jun. 30, 2023
Segment Reporting [Abstract] |
BUSINESS SEGMENTS | BUSINESS SEGMENTSThe Company’s business is classified into six reportable operating segments: the Capital Markets segment, Wealth Management segment, Auction and Liquidation segment, Financial Consulting segment, Communications segment, and Consumer segment. These reportable segments are all distinct businesses, each with a different marketing strategy and management structure. During the fourth quarter of 2022, the Company realigned its segment reporting structure to reflect organizational changes from recent acquisitions and the manner in which capital is allocated. The Consumer segment includes the previously reported Brands segment and Targus, which the Company acquired in the fourth quarter of 2022. The Company has also re-aligned its previously reported Principal Investments - Communications and Other segment into the Communications segment and the All Other category that is reported with Corporate and Other below. The following is a summary of certain financial data for each of the Company’s reportable segments:
| Three Months Ended June 30, |  | Six Months Ended June 30, |  |
| 2023 |  | 2022 |  | 2023 |  | 2022 |  |  |  |
Capital Markets segment: |  |  | (As Restated) |  |  |  | (As Restated) |  |  |  |
Revenues - Services and fees | $ | 44,961 |  |  | $ | 58,184 |  |  | $ | 102,890 |  |  | $ | 119,406 |  |  |  |  |
Trading income (loss) and fair value adjustments on loans | 41,892 |  |  | (119,292) |  |  | 92,188 |  |  | (139,091) |  |  |  |  |
Interest income - Loans and securities lending | 75,199 |  |  | 62,399 |  |  | 152,385 |  |  | 123,825 |  |  |  |  |
Total revenues | 162,052 |  |  | 1,291 |  |  | 347,463 |  |  | 104,140 |  |  |  |  |
Selling, general and administrative expenses | (45,870) |  |  | (45,865) |  |  | (111,581) |  |  | (79,982) |  |  |  |  |
Impairment of tradenames | (1,733) |  |  | — |  |  | (1,733) |  |  | — |  |  |  |  |
Interest expense - Securities lending and loan participations sold | (35,780) |  |  | (14,544) |  |  | (68,204) |  |  | (26,310) |  |  |  |  |
Depreciation and amortization | (993) |  |  | (2,204) |  |  | (2,249) |  |  | (4,097) |  |  |  |  |
Segment income (loss) | 77,676 |  |  | (61,322) |  |  | 163,696 |  |  | (6,249) |  |  |  |  |
Wealth Management segment: |  |  |  |  |  |  |  |  |  |  |
Revenues - Services and fees | 47,243 |  |  | 60,860 |  |  | 95,785 |  |  | 137,818 |  |  |  |  |
Trading income and fair value adjustments on loans | 473 |  |  | 1,529 |  |  | 1,745 |  |  | 2,050 |  |  |  |  |
Total revenues | 47,716 |  |  | 62,389 |  |  | 97,530 |  |  | 139,868 |  |  |  |  |
Selling, general and administrative expenses | (47,964) |  |  | (68,394) |  |  | (95,286) |  |  | (154,136) |  |  |  |  |
Restructuring charge | (28) |  |  | — |  |  | (61) |  |  | — |  |  |  |  |
Depreciation and amortization | (1,082) |  |  | (1,308) |  |  | (2,168) |  |  | (3,141) |  |  |  |  |
Segment (loss) income | (1,358) |  |  | (7,313) |  |  | 15 |  |  | (17,409) |  |  |  |  |
Auction and Liquidation segment: |  |  |  |  |  |  |  |  |  |  |
Revenues - Services and fees | 8,885 |  |  | 2,488 |  |  | 14,329 |  |  | 5,843 |  |  |  |  |
Revenues - Sale of goods | 1,676 |  |  | — |  |  | 1,892 |  |  | — |  |  |  |  |
Interest Income - Loan | — |  |  | 1,436 |  |  | — |  |  | 1,436 |  |  |  |  |
Total revenues | 10,561 |  |  | 3,924 |  |  | 16,221 |  |  | 7,279 |  |  |  |  |
Direct cost of services | (3,453) |  |  | (1,296) |  |  | (6,581) |  |  | (3,631) |  |  |  |  |
Cost of goods sold | (618) |  |  | — |  |  | (670) |  |  | — |  |  |  |  |
Selling, general and administrative expenses | (2,302) |  |  | (2,177) |  |  | (4,582) |  |  | (3,997) |  |  |  |  |
Segment income (loss) | 4,188 |  |  | 451 |  |  | 4,388 |  |  | (349) |  |  |  |  |
Financial Consulting segment: |  |  |  |  |  |  |  |  |  |  |
Revenues - Services and fees | 31,212 |  |  | 24,310 |  |  | 56,222 |  |  | 50,246 |  |  |  |  |
Selling, general and administrative expenses | (22,791) |  |  | (19,948) |  |  | (43,940) |  |  | (40,891) |  |  |  |  |
Depreciation and amortization | (103) |  |  | (78) |  |  | (181) |  |  | (159) |  |  |  |  |
Segment income | 8,318 |  |  | 4,284 |  |  | 12,101 |  |  | 9,196 |  |  |  |  |
Communications segment: |  |  |  |  |  |  |  |  |  |  |
Revenues - Services and fees | 83,316 |  |  | 40,035 |  |  | 168,368 |  |  | 70,122 |  |  |  |  |
Revenues - Sale of goods | 1,640 |  |  | 1,887 |  |  | 3,507 |  |  | 3,765 |  |  |  |  |
Total revenues | 84,956 |  |  | 41,922 |  |  | 171,875 |  |  | 73,887 |  |  |  |  |
Direct cost of services | (46,085) |  |  | (16,489) |  |  | (90,818) |  |  | (25,805) |  |  |  |  |
Cost of goods sold | (2,046) |  |  | (1,994) |  |  | (4,214) |  |  | (4,245) |  |  |  |  |
Selling, general and administrative expenses | (20,241) |  |  | (12,176) |  |  | (42,785) |  |  | (20,421) |  |  |  |  |
Restructuring charge | (197) |  |  | — |  |  | (257) |  |  | — |  |  |  |  |
Depreciation and amortization | (6,405) |  |  | (3,555) |  |  | (13,036) |  |  | (6,739) |  |  |  |  |
Segment income | 9,982 |  |  | 7,708 |  |  | 20,765 |  |  | 16,677 |  |  |  |  |
Consumer segment: |  |  |  |  |  |  |  |  |  |  |
Revenues - Services and fees | 5,041 |  |  | 5,174 |  |  | 9,350 |  |  | 9,731 |  |  |  |  |
Revenues - Sale of goods | 55,071 |  |  | — |  |  | 120,765 |  |  | — |  |  |  |  |
Total revenues | 60,112 |  |  | 5,174 |  |  | 130,115 |  |  | 9,731 |  |  |  |  |
Cost of goods sold | (37,653) |  |  | — |  |  | (83,059) |  |  | — |  |  |  |  |
Selling, general and administrative expenses | (17,331) |  |  | (818) |  |  | (37,443) |  |  | (1,574) |  |  |  |  |
Depreciation and amortization | (2,639) |  |  | (583) |  |  | (5,478) |  |  | (1,166) |  |  |  |  |
Restructuring charge | (403) |  |  | — |  |  | (403) |  |  | — |  |  |  |  |
Segment income | 2,086 |  |  | 3,773 |  |  | 3,732 |  |  | 6,991 |  |  |  |  |
Consolidated operating income (loss) from reportable segments | 100,892 |  |  | (52,419) |  |  | 204,697 |  |  | 8,857 |  |  |  |  |
All Other: |  |  |  |  |  |  |  |  |  |  |
Revenues - Services and fees | 9,669 |  |  | 611 |  |  | 18,942 |  |  | 1,310 |  |  |  |  |
Direct cost of services | (6,403) |  |  | — |  |  | (12,939) |  |  | — |  |  |  |  |
Corporate and other expenses | (21,164) |  |  | (10,030) |  |  | (42,783) |  |  | (26,032) |  |  |  |  |
Interest income | 701 |  |  | 500 |  |  | 3,275 |  |  | 567 |  |  |  |  |
Dividend income | 9,555 |  |  | 9,243 |  |  | 22,759 |  |  | 17,104 |  |  |  |  |
Realized and unrealized gains (losses) on investments | 18,843 |  |  | (106,164) |  |  | (9,599) |  |  | (155,276) |  |  |  |  |
Change in fair value of financial instruments and other | 381 |  |  | 4,321 |  |  | 172 |  |  | 10,302 |  |  |  |  |
Income (loss) on equity investments | 143 |  |  | (3,399) |  |  | 133 |  |  | 3,376 |  |  |  |  |
Interest expense | (47,332) |  |  | (31,764) |  |  | (94,893) |  |  | (62,200) |  |  |  |  |
Income (loss) before income taxes | 65,285 |  |  | (189,101) |  |  | 89,764 |  |  | (201,992) |  |  |  |  |
(Provision for) benefit from income taxes | (21,504) |  |  | 52,513 |  |  | (29,423) |  |  | 56,208 |  |  |  |  |
Net income (loss) | 43,781 |  |  | (136,588) |  |  | 60,341 |  |  | (145,784) |  |  |  |  |
Net (loss) income attributable to noncontrolling interests and redeemable noncontrolling interests | (2,600) |  |  | 3,571 |  |  | (3,195) |  |  | 4,437 |  |  |  |  |
Net income (loss) attributable to B. Riley Financial, Inc. | 46,381 |  |  | (140,159) |  |  | 63,536 |  |  | (150,221) |  |  |  |  |
Preferred stock dividends | 2,015 |  |  | 2,002 |  |  | 4,027 |  |  | 4,004 |  |  |  |  |
Net income (loss) available to common shareholders | $ | 44,366 |  |  | $ | (142,161) |  |  | $ | 59,509 |  |  | $ | (154,225) |  |  |  |  |
The following table presents revenues by geographical area:
| Three Months Ended June 30, |  | Six Months Ended June 30, |  |
| 2023 |  | 2022 |  | 2023 |  | 2022 |  |  |  |
|  |  | (As Restated) |  |  |  | (As Restated) |  |  |  |
Revenues |  |  |  |  |  |  |  |  |  |  |
Revenues - Services and fees |  |  |  |  |  |  |  |  |  |  |
North America | $ | 229,911 |  |  | $ | 189,841 |  |  | $ | 464,841 |  |  | $ | 390,702 |  |  |  |  |
Europe | 416 |  |  | 1,821 |  |  | 1,045 |  |  | 3,774 |  |  |  |  |
Total Revenues - Services and fees | 230,327 |  |  | 191,662 |  |  | 465,886 |  |  | 394,476 |  |  |  |  |
Trading income (loss) and fair value adjustments on loans |  |  |  |  |  |  |  |  |  |  |
North America | 42,365 |  |  | (117,763) |  |  | 93,933 |  |  | (137,041) |  |  |  |  |
Revenues - Sale of goods |  |  |  |  |  |  |  |  |  |  |
North America | 29,407 |  |  | 1,887 |  |  | 67,354 |  |  | 3,765 |  |  |  |  |
Australia | 3,171 |  |  | — |  |  | 6,630 |  |  | — |  |  |  |  |
Europe, Middle East, and Africa | 17,198 |  |  | — |  |  | 34,626 |  |  | — |  |  |  |  |
Asia | 6,316 |  |  | — |  |  | 12,540 |  |  | — |  |  |  |  |
Latin America | 2,295 |  |  | — |  |  | 5,014 |  |  | — |  |  |  |  |
Total Revenues - Sale of goods | 58,387 |  |  | 1,887 |  |  | 126,164 |  |  | 3,765 |  |  |  |  |
Revenues - Interest income - Loans and securities lending |  |  |  |  |  |  |  |  |  |  |
North America | 75,199 |  |  | 62,399 |  |  | 152,385 |  |  | 123,825 |  |  |  |  |
Europe | — |  |  | 1,436 |  |  | — |  |  | 1,436 |  |  |  |  |
Total Revenues - Interest income - Loans and securities lending | 75,199 |  |  | 63,835 |  |  | 152,385 |  |  | 125,261 |  |  |  |  |
Total Revenues |  |  |  |  |  |  |  |  |  |  |
North America | 376,882 |  |  | 136,364 |  |  | 778,513 |  |  | 381,251 |  |  |  |  |
Australia | 3,171 |  |  | — |  |  | 6,630 |  |  | — |  |  |  |  |
Europe, Middle East, and Africa | 17,614 |  |  | 3,257 |  |  | 35,671 |  |  | 5,210 |  |  |  |  |
Asia | 6,316 |  |  | — |  |  | 12,540 |  |  | — |  |  |  |  |
Latin America | 2,295 |  |  | — |  |  | 5,014 |  |  | — |  |  |  |  |
Total Revenues | $ | 406,278 |  |  | $ | 139,621 |  |  | $ | 838,368 |  |  | $ | 386,461 |  |  |  |  |
The following table presents long-lived assets, which consists of property and equipment, net, by geographical area:
| June 30, 2023 |  | December 31, 2022
Long-lived Assets - Property and Equipment, net: |  |  |
North America | $ | 27,708 |  |  | $ | 26,276 |
Europe | 487 |  |  | 577 |
Asia Pacific | 147 |  |  | 162 |
Australia | 101 |  |  | 126 |
Total | $ | 28,443 |  |  | $ | 27,141 |
Segment assets are not reported to, or used by, the Company’s Chief Operating Decision Maker to allocate resources to, or assess performance of the segments and therefore, total segment assets have not been disclosed.

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