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Revenue Recognition | 6 Months Ended
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Jun. 30, 2025
Revenue Recognition [Abstract] |
Revenue Recognition | 13. Revenue Recognition Refer to Note 2 – Summary of Significant Accounting Policies in Company’s 2024 Form 10-K for detail on the Company’s primary sources of revenue and the corresponding accounting treatment. There were no significant changes to the accounting policies for revenue recognition, and except as set forth below, the Company’s accounting policies were unchanged during the three and six months ended June 30, 2025. Principal Transactions and Proprietary Trading The Company continuously invests in treasury bill and treasury notes as part of its normal operations to meet deposit requirements, which are primarily in the line item “Cash and securities segregated for regulatory purposes” on the statements of financial condition, in order to enhance its yield on its excess 15c3-3 deposits. In the first quarter of 2025, the Company recorded an unrealized gain of approximately $9.2 million in relation to the Investment in Equity Security. In the second quarter of 2025, the Company sold the majority of its Investment in Equity Security realizing a gain of approximately $2.4 million for the six months ended June 30, 2025. Refer to Note 1 – Organization and Basis of Presentation, Note 5 – Fair Value Measurements, and Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of Operations for further detail. Disaggregation of Revenue The Company generated a significant portion of its revenue from financial instruments comprising of margin revenue, securities lending, principal transactions and proprietary trading, and interest revenue. These net interest and other revenues are not within the scope of FASB ASC Topic 606 – “Revenue from Contracts with Customers” (“Topic 606”), because they are generated from financial instruments covered by various other areas of GAAP. Market making activities are not within the scope of Topic 606, as they do not meet the definition of a contract with a customer under the standard. Consequently, revenue and expenses related to market making activity are accounted for separately and not included in the revenue figures presented in accordance with Topic 606. The Company also has fee revenue and transaction revenue which are within the scope of Topic 606. Revenue from contracts with customers includes commission income charged to retail clients for executing transactions, markups on riskless principal transactions charged to retail clients for executing transactions, distribution income received from mutual funds for client transactions, stock locate fees charged to counterparties for providing locate services, payment for order flow received for executing transactions, administrative fees to retail clients including for maintenance and other ancillary services, advisory fee revenue from investment management services provided to clients, investment banking fees for underwriting, advisory, and capital markets services, and income generated from digital streaming, licensing fees, physical music sales, and other performance-rights sources. Under Topic 606, Revenue from Contracts with Customers, requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires an entity to follow a five-step model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. The table below presents detailed information on the Company’s recognition of revenue from contracts with customers as well as revenues from financial instruments, which are outside the scope of Topic 606, by major types of services for the periods indicated.
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Revenues from Contracts with Customers |  |  |  |  |  |  |  |  |  |  |  |
Principal transactions and proprietary trading |  |  |  |  |  |  |  |  |  |  |  |
Riskless principal transactions with customers |  | $ | 2,453,000 |  |  | $ | 3,285,000 |  |  | $ | 6,161,000 |  |  | $ | 6,720,000 |
Investment banking and advisory fees |  |  | 206,000 |  |  |  | — |  |  |  | 206,000 |  |  |  | — |
Commissions and fees |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Brokerage commissions |  |  | 1,515,000 |  |  |  | 1,950,000 |  |  |  | 3,058,000 |  |  |  | 3,842,000 |
Distribution fees |  |  | 343,000 |  |  |  | 379,000 |  |  |  | 701,000 |  |  |  | 705,000 |
Insurance commissions |  |  | 156,000 |  |  |  | 274,000 |  |  |  | 357,000 |  |  |  | 356,000 |
Stock borrow / stock loan |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail fees (rebates) |  |  | 4,000 |  |  |  | (3,000 | ) |  |  | 10,000 |  |  |  | (12,000 | )
Stock locate services |  |  | 5,957,000 |  |  |  | 4,208,000 |  |  |  | 9,989,000 |  |  |  | 7,806,000 |
Other income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Administrative fees |  |  | 426,000 |  |  |  | 823,000 |  |  |  | 857,000 |  |  |  | 1,164,000 |
Payment for order flow |  |  | 413,000 |  |  |  | 317,000 |  |  |  | 756,000 |  |  |  | 612,000 |
Other commissions |  |  | — |  |  |  | 27,000 |  |  |  | — |  |  |  | 18,000 |
Recorded music revenue |  |  | 113,000 |  |  |  | — |  |  |  | 113,000 |  |  |  | — |
Advisory fees |  |  | 791,000 |  |  |  | 551,000 |  |  |  | 1,539,000 |  |  |  | 1,041,000 |
Total Revenues from Contracts with Customers |  | $ | 12,377,000 |  |  | $ | 11,811,000 |  |  | $ | 23,747,000 |  |  | $ | 22,252,000 |
Revenue Outside the Scope of Topic 606 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Principal transactions and proprietary trading |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Proprietary trading |  | $ | 373,000 |  |  | $ | 289,000 |  |  | $ | 393,000 |  |  | $ | 360,000 |
Principal transactions – Investment in Equity Security |  |  | (6,803,000 | ) |  |  | — |  |  |  | 2,430,000 |  |  |  | — |
Interest, marketing and distribution fees |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Margin interest |  |  | 3,513,000 |  |  |  | 3,831,000 |  |  |  | 6,908,000 |  |  |  | 7,807,000 |
Interest income |  |  | 2,838,000 |  |  |  | 3,498,000 |  |  |  | 5,888,000 |  |  |  | 7,779,000 |
Marketing and distribution fees |  |  | 518,000 |  |  |  | 506,000 |  |  |  | 1,018,000 |  |  |  | 1,012,000 |
Stock borrow / stock loan |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Stock rebate revenue |  |  | 1,561,000 |  |  |  | 491,000 |  |  |  | 2,360,000 |  |  |  | 1,000,000 |
Market making |  |  | 497,000 |  |  |  | 437,000 |  |  |  | 1,049,000 |  |  |  | 1,109,000 |
Total Revenue Outside the Scope of Topic 606 |  |  | 2,497,000 |  |  |  | 9,052,000 |  |  |  | 20,046,000 |  |  |  | 19,067,000 |
Total Revenue |  | $ | 14,874,000 |  |  | $ | 20,863,000 |  |  | $ | 43,793,000 |  |  | $ | 41,319,000 |

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