Great Elm Group, Inc. Segments Disclosure
7. Segment Reporting
We manage our business activities on a consolidated basis and operate as a operating segment. We primarily derive our revenue from our asset management business which is focused on growing a scalable and diversified portfolio of long-duration and permanent capital vehicles across credit, real estate, specialty finance, and other alternative strategies. The accounting policies of the segment are the same as those described in Note 2 - Summary of Significant Accounting Policies.
Our chief operating decision maker (CODM) is our of the Company’s Board of Directors, Jason W. Reese. The CODM uses net income, as reported on our Consolidated Statements of Operations, predominantly in the annual budget and forecasting process. The CODM considers budget-to-actual variances on a quarterly basis when making decisions about internal operations, such as staffing and related compensation, and planning for future investments. Total assets for the segment are as reported on the Consolidated Balance Sheet.
The following table provides the operating financial results of our operating segment:
|
For the twelve months ended June 30, |
|
|||||
(in thousands) |
2025 |
|
|
2024 |
|
||
Revenues |
$ |
16,316 |
|
|
$ |
17,834 |
|
Cost of revenues |
|
1,082 |
|
|
|
5,526 |
|
Interest income |
|
3,602 |
|
|
|
4,600 |
|
Other income |
|
4,018 |
|
|
|
4,302 |
|
Less: Significant segment expenses |
|
|
|
|
|
||
Employee expenses |
|
14,474 |
|
|
|
12,522 |
|
Operating expenses |
|
6,506 |
|
|
|
6,340 |
|
Interest expense |
|
4,157 |
|
|
|
4,334 |
|
Depreciation and amortization |
|
1,249 |
|
|
|
1,108 |
|
Less: Other segment expenses |
|
|
|
|
|
||
Income tax expense |
|
86 |
|
|
|
101 |
|
Other expenses |
|
1,008 |
|
|
|
176 |
|
Net realized and unrealized gain |
|
16,854 |
|
|
|
2,212 |
|
Net realized and unrealized gain on investments of Consolidated Funds |
|
3,322 |
|
|
|
233 |
|
Segment net income |
|
15,550 |
|
|
|
(926 |
) |
Other income includes dividend income and other income of Consolidated Funds, as well as income from discontinued operations. Employee expenses consist of compensation expense. Operating expenses are primarily made up of overhead expenses such as insurance, rent, professional fees, travel and meals, and other related costs. Other expenses primarily consists of expenses of Consolidated Funds and other non-recurring expenses, such as non-recurring legal fees.
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.