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GEGGL, Great Elm Group, Inc.

Software asset-light UnprofitableDistress / turnaround

Revenue is led by Management Fees (43%) and Incentive Fees (25%), with 5 more lines behind.

Latest annual: FY2025 10-K

GEGGL · Great Elm Group, Inc.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$16M

−8.5% YoY · −23% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $23M 5-yr avg $22M

Gross margin 70% 5-yr avg 81%

Operating margin −58.7% 5-yr avg −84.4%

ROIC −35% 5-yr avg −14%

Owner-earnings margin 43% 5-yr avg 196%

Free cash flow margin 43% 5-yr avg 196%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What it is: A software business, earning high margins on code once it is written.
Situation: Unprofitable. No meaningful revenue yet; the record is the cash on hand against the burn. Distress / turnaround. Thin interest coverage, or operating cash burned against real debt, across the record. The balance sheet carries this situation; the debt schedule sets the clock.
What moves the needle: Operating margin has run around −49% through the cycle, the operating line deeply negative — so the lever is the path to a margin at all: revenue growth against the cost curve and the cash runway, not the level of a margin that isn't there yet. Stock-based pay runs about 12% of sales, a real and recurring claim on owners that the GAAP margin understates. Read this kind of business on retention and the cost of growth. On its own account, the filing leans hardest on regulation & policy, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has rarely cleared the cost of capital (median −12%, above 15% in 0 of 6 years). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

Revenue spreads across 7 lines, the largest Management Fees at 43%.

Revenue by product line, FY2025

Management Fees43%$7M
Incentive Fees25%$4M
Administration and Service Fees9%$2M
Property Management Fees8%$1M
Real Estate Property Sales7%$1M
Project Management Fees6%$941K
Real Estate Rental Income2%$317K

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2020–2025

realized figures from each filing · older years to the left

2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
							Income statement
$59M	$61M	$5M	$9M	$18M	$16M	$23M	RevenueRevenue
—	—	—	—	69%	93%	70%	Gross marginGross mgn
11%	10%	132%	98%	43%	40%	36%	SG&A / revenueSG&A/rev
($2M)	($4M)	($9M)	($11M)	($8M)	($8M)	($13M)	Operating incomeOp. inc.
−3.7%	−6.1%	−193.6%	−129.4%	−43.9%	−49.1%	−58.7%	Operating marginOp. mgn
($13M)	($7M)	($15M)	$28M	($1M)	$13M	($23M)	Net incomeNet inc.
							Cash flow & returns
$13M	($19M)	$29M	($2M)	($16M)	($9M)	$10M	Operating cash flowOp. cash
$11M	$9M	$524K	$1M	$1M	$1M	$1M	DepreciationDeprec.
$15M	($22M)	$41M	($34M)	($18M)	($25M)	$29M	Working capital & otherWC & other
$737K	$287K	$3K	$53K	—	—	$53K	CapexCapex
1.2%	0.5%	0.1%	0.6%	—	—	0.2%	Capex / revenueCapex/rev
$13M	($19M)	$29M	($2M)	—	—	$10M	Owner earningsOwner earn.
21.2%	−31.7%	648.3%	−28.0%	—	—	43.2%	Owner earnings marginOE mgn
$13M	($19M)	$29M	($2M)	—	—	$10M	Free cash flowFCF
21.2%	−31.7%	648.3%	−28.0%	—	—	43.2%	Free cash flow marginFCF mgn
—	$748K	$1M	—	$0	$3M	$0	AcquisitionsAcquis.
-5%	-6%	-15%	-27%	-13%	-11%	-35%	ROICROIC
-21%	-17%	-44%	43%	-2%	18%	-58%	Return on equityROE
−21%	−17%	−44%	43%	−2%	18%	−58%	Retained to equityRetained/eq
							Balance sheet
$41M	$24M	$22M	$60M	$48M	$31M	$46M	Cash & investmentsCash+inv
$8M	$7M	$6M	—	—	—	$6M	ReceivablesReceiv.
$1M	$1M	$898K	—	—	—	$1M	InventoryInvent.
$5M	$6M	$8K	$191K	—	—	$191K	Accounts payablePayables
$4M	$2M	$7M	—	—	—	$7M	Operating working capitalOper. WC
$61M	$89M	$84M	$123M	$128M	$138M	$97M	Current assetsCur. assets
$29M	$33M	$20M	$7M	$8M	$10M	$7M	Current liabilitiesCur. liab.
2.1×	2.7×	4.3×	16.7×	15.3×	14.3×	13.2×	Current ratioCurr. ratio
$50M	$51M	$52M	—	$0	$440K	$440K	GoodwillGoodwill
$195M	$162M	$168M	$136M	$140M	$154M	$112M	Total assetsAssets
$17M	$33M	$35M	$37M	$35M	$35M	$36M	Total debtDebt
($23M)	$9M	$13M	($23M)	($13M)	$4M	($10M)	Net debt / (cash)Net debt
-0.5×	-0.8×	-1.6×	-1.8×	-1.8×	-1.9×	-3.2×	Interest coverageInt. cov.
$61M	$43M	$33M	$64M	$63M	$70M	$40M	Shareholders’ equityEquity
0.9%	2.9%	62.0%	30.2%	13.3%	12.0%	9.8%	Stock comp / revenueSBC/rev
							Per share
25.4M	25.7M	26.8M	41.0M	30.0M	38.8M	30.5M	Shares out (diluted)Shares
$2.32	$2.37	$0.17	$0.21	$0.60	$0.42	$0.75	Revenue / shareRev/sh
$-0.51	$-0.28	$-0.56	$0.68	$-0.05	$0.33	$-0.75	EPS (diluted)EPS
$0.49	$-0.75	$1.09	$-0.06	—	—	$0.32	Owner earnings / shareOE/sh
$0.49	$-0.75	$1.09	$-0.06	—	—	$0.32	Free cash flow / shareFCF/sh
$0.03	$0.01	$0.00	$0.00	—	—	$0.00	Cap. spending / shareCapex/sh
$2.39	$1.68	$1.25	$1.56	$2.09	$1.81	$1.31	Book value / shareBVPS

The diluted share count moved ×1.53 into 2023 — shares issued, not a split the totals corroborate — and the per-share figures carry the counts as filed.

Per-share growththe realized rate an owner's share compounded

	5-yr	5-yr
Revenue / share	−28.9%/yr	−28.9%/yr
Capital spending / share	−64.5%/yr (3-yr)	−64.5%/yr (3-yr)
Book value / share	−5.4%/yr	−5.4%/yr

The record, charted

FY2020–2025

Each measure over its full record; the current point and the worst year marked.

Share count

39Mpeak FY2023

ROIC

−11%low FY2023

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

($2M)owner earningsvs.$28Mnet incomelow FY2021

Owner-earnings bridge

FY2020–FY2023cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2023 the business reported $28M of profit but ($2M) of owner earnings: $30M less than the profit line, taken out by capital spending and the timing of cash.

	FY2023	FY2022	FY2021	FY2020
Reported net income	$28M	($15M)	($7M)	($13M)
Depreciation & amortizationnon-cash charge added back	+$1M	+$524K	+$9M	+$11M
Stock-based compensationreal costnon-cash, but a real cost	+$3M	+$3M	+$2M	+$548K
Working capital & othertiming of cash in and out, other non-cash items	−$34M	+$41M	−$22M	+$15M
Cash from operations	($2M)	$29M	($19M)	$13M
Capital expenditurecash put back in to keep running and to grow	−$53K	−$3K	−$287K	−$737K
Owner earnings	($2M)	$29M	($19M)	$13M
Owner-earnings marginowner earnings ÷ revenue	-28%	648%	-32%	21%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $3M), owner earnings is nearer ($5M).

Much of fiscal 2023's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? -1.9×

Does not cover its interest

Operating income ($8M) ÷ interest expense $4M

What this means
A full year of operating profit didn't cover the interest bill. This is the zombie zone: the business depends on refinancing, asset sales, or forbearance to service its debt.
How heavy is the debt, net of cash? $4M

Net debt against an operating loss

Cash $31M − debt $35M

What this means
Netting $31M of cash and short-term investments against $35M of debt leaves $4M owed, with no operating profit this year to measure it against — understand that combination before anything else about the company. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 370d

Long (60+ days)

DSO 131 + DIO 303 − DPO 64 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital -13%

Below average through the cycle

6-yr median, range -27%–-5%; -11% latest = NOPAT ($8M) ÷ invested capital $74M

Industry peers: median -40%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 6 years (it ran -11% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin -28%

Consumes cash through the cycle

4-yr median margin, range -32%–648%; latest ($9M) = operating cash ($9M) − maintenance capex $53K

Industry peers: median -34%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's -56% of revenue this year, a -28% median across 4 years. Treating stock comp as the real expense it is (less $2M of SBC) leaves ($11M).
Are earnings backed by cash? -0.70×

Thinly cash-backed

Cash from ops ($9M) ÷ net income $13M

In the filing’s words Read against the cash, reported earnings have run ahead of the operating cash the business generated over the record — about 7% of assets a year, among the widest gaps in the catalogue. For an inventory- or content-heavy grower that can be cash tied up in real assets as it expands; elsewhere it can mean the earnings lean on accounting estimates — the cash-flow statement against the income statement is where to tell which.

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? —

No surplus to allocate

What this means
The business didn't generate positive Owner Earnings this year, so any distributions came from the balance sheet or borrowing, not from operations.
Investing or harvesting? 0.04×

Harvesting

Capex $53K ÷ depreciation $1M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 2 of 5 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Miss

Revenue ≥ $2B · $16M

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Pass

Current ratio ≥ 2× · 14.34×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Pass

Debt ≤ working capital · $35M vs $128M WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Miss

A profit every year (6-yr record) · 4 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · none paid

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth —

Earnings +33% over the record · —

What this means
Earnings were negative early in the record, a growth rate isn't meaningful.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $0.42/share (latest year $0.41), the averaged base the calculator's gate runs on, and book value is $2.24/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2020–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 2 of 6

What this means
Lost money in 4 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 0 of 6 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin −68% → −74% (3-yr avg ends)

What this means
The recent-years average (−74%) sits below the early years (−68%), but the latest year (−49%) is back near the early level: a cyclical trough dragging the window down, not a one-way slide. The through-cycle median is −49% — read it across the cycle, not on the dip.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Worst year 2022 · −193.6% op. margin

What this means
Operations went underwater in 2022, understand why before trusting the good years.
Share count +8.8%/yr

What this means
The share count is rising, dilution works against you on a per-share basis.

Does AI threaten the moat?

Elevated contestability

The product is software or information, the very thing capable AI now produces more cheaply, so the moat is more contestable than the record alone implies.

In its own filing Not named

Despite the structural exposure, the latest 10-K does not name AI as a competitive risk, which is itself worth a question.

AI has collapsed the cost of building a capable substitute for the very thing this business sells. When a credible alternative can be assembled for a fraction of the incumbent's price, it is pricing power that erodes first, not revenue tomorrow. The live question is whether the moat survives that, not whether it held in the past. Whether that question is answerable at all is yours to decide, against your own circle of competence.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$97M

Cash & short-term investments$46M
Receivables$6M
Inventory$1M
Other current assets$45M

Current liabilities$7M

Debt due within a year$2M
Accounts payable$191K
Other current liabilities$5M

Current ratio13.18×all current assets ÷ what's due · Graham looked for 2×

Quick ratio13.04×stricter: inventory excluded

Cash ratio6.17×strictest: cash alone against what's due

Working capital$90Mthe cushion left after near-term bills

Debt due this year vs. cash$2M due · $46M cash covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2026 balance sheet

Revenue, latest quarter vs. a year ago+6.5%the freshest read on whether the business is still growing

Current ratio, recent quarters15.3× → 13.2×

Deeper floors

Tangible book value$28Mequity stripped of goodwill & intangibles

Net current asset value$25MGraham's net-net: current assets less all liabilities

Debt incl. operating leases$4M$1M of it operating leases

Deferred revenue$1Mcustomer cash collected before delivery; operating float

From the company's latest filing.

How the cash was used, 2020–2023

Over the record, the business generated $21M of operating cash; how management split it reads as a balanced allocator, splitting cash between the business, owners, and the balance sheet.

Reinvested$1M · 5%
Retained (debt / cash)$20M · 95%

Source of fundingOperating cash
Operating cash covered reinvestment and returns; over the span debt rose $18M and cash and short-term investments rose $5M.
Net change in share count19.8%
The diluted count rose from 25M to 30M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Pay, as filed	“Actually paid”	Net income
2023	$1.5M	$1.7M	$28M
2023	$694k	$609k	$28M
2024	$1.5M	$1.3M	($1M)
2025	$1.2M	$1.1M	$13M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Net income is the whole business's, as filed, for the same fiscal years.

Insider ownership49.7%
The stake all directors and executive officers hold together, per the 2025 proxy: skin in the game, the first thing Munger reads.
Stock-based compensation$2M
The slice of the business handed to employees in shares this year, 12% of revenue. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Great Elm Group, Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2020–2025.

3 of the 4 tests turned up something to look into; the other 1 came back clean.

Look hereDid the share count rise anyway?19.8%
Diluted shares grew 19.8% over 2020–2023. Owners were diluted on net; each share owns less of the business than it did. Read the buyback line beside this one, not on its own.
Look hereDid debt outgrow the business?$17M → $36M
Debt rose from $17M to $36M while owner earnings went from about $8M to $3M — about 2.3 years of owner earnings in debt then, about 14 now: measured against what the business earns, the balance sheet carries more debt than it did. Debt raised for buybacks or deals rather than growth is the kind that bites in a downturn.
Look hereDid reported profit become cash?-0.83×
Across the record the business reported $4M of net income but generated ($3M) of operating cash, a -0.83-to-one conversion. Profit that does not turn into cash over many years is the classic mark of earnings that are softer than they look. Ask where the gap sits, receivables, inventory, or costs being capitalized rather than expensed.

And these came back clean

Did receivables and inventory outpace sales?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

Peers, Software

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
RDVTRed Violet Inc. Common Stock	$90M	—	-3.0%	-3%	20%
SVCOSilvaco Group Inc.	$63M	80%	-67.5%	-40%	-34%
RCATRed Cat Holdings Inc.	$41M	18%	-562.0%	-53%	-250%
QXLQuantum X Labs Inc.	$27M	95%	-9.4%	-2%	3%
QBTSD-Wave Quantum Inc.	$25M	68%	-724.6%	-1142%	-582%
GEGGLGreat Elm Group, Inc.	$16M	93%	-46.5%	-12%	-3%
NXTTNext Technology Holding Inc.	$12M	59%	-24.0%	-1%	-29%
PDYNPalladyne AI Corp.	$5M	30%	-916.4%	-333%	-500%
Group median	—	68%	-57.0%	-26%	-31%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Great Elm Group, Inc. has delivered.

Today’s price $

Base Normalize · through-cycle ($3M) Net of stock comp (−$2M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth, delivered—

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Owner earnings $10M on 31M shares outstanding, per the 10-Q cover, as of 2026-04-30; net cash $10M. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh GEGGL against another business →

The owners of GEGGL: the meeting and the votes →

Cite: Owner Scorecard, "Great Elm Group, Inc. (GEGGL), the owner's record," https://ownerscorecard.com/c/GEGGL, data as of 2026-07-09.

Manual order: ← GEF its page in the Manual GEHC →

Industry order: ← GDYN the Software chapter GEN →