By Michael Kim
NASDAQ:BENF
READ THE FULL BENF RESEARCH REPORT
Post-market close on 9/29/25, Beneficient (NASDAQ:BENF) reported F4Q25 (Mar) earnings results and filed the company’s Annual Report of Form 10-K. On a GAAP basis, BENF reported a net loss of $0.09 per Class A diluted share for F4Q25 versus a net loss of $29.51 per share for F4Q24. The year-over-year variance primarily related to more favorable GAAP revenue trends as well as sizeable goodwill impairment and arbitration loss charges in F4Q24.
Adjusted segment revenues attributable to BENF equity holders comprising Ben Liquidity interest income, Ben Custody fees, and Corporate & Other totaled $14.3 million for F4Q25, down 14% from the prior quarter’s level. Ben Liquidity interest income decreased by 25.1% on a sequential basis reflecting a higher percentage of non-accruing loans, while Ben Custody fees were essentially flat on a sequential-quarter basis – consistent with steady NAVs of custodied assets.
BENF reported an adjusted segment operating loss attributable to BENF equity holders of $13.9 million for F4Q25 compared to a loss of $4.7 million in F3Q25. The unfavorable Q/Q trend was largely a function of lower Ben Liquidity revenues and higher credit loss adjustments. On an adjusted basis, Beneficient reported a net loss of $1.61 per Class A share versus our $0.46 estimate. Relative to our model, the miss was primarily a function of lower-than-expected Ben Liquidity revenues and operating income.
Following our review of F4Q25 results, we highlight the following key takeaways:
1. Ongoing loan originations: In mid-March, Beneficient announced the closing of a $1.4 million primary capital commitment to a private equity fund managed by 8F Asset Management in exchange for BENF convertible preferred stock. Following the closing of the transaction, BENF’s ExAlt loan portfolio grew by $1.4 million, with the company’s Tangible Book Value (TBV) accreting by ~$450,000. Subsequent to F4Q25 quarter end, the company announced additional transactions including primarily capital commitments to the Mendoza Ventures Growth Fund III, Cork & Vines Fund I, and Pulse Pioneer Fund. In aggregate, related commitments totaled $11.8 million, thereby driving further growth in BENF’s loan portfolio and TBV accretion. Looking ahead, we see accelerating demand for primary capital commitments given incremental Preferred Liquidity Provider Program Agreements (including recently established pacts with Mendoza Ventures Growth Fund III and Cork & Vines Fund I), as well as the considerable total addressable market. Indeed, recent data suggests funds coming to market and those recently launched that are currently raising capital are targeting approximately $330 billion of new capital.
2. Asset sales to enhance liquidity: While loan origination volumes have started to pick up, monetizations/realizations across Customer ExAlt Trusts remain restrained, thereby further extending distribution timelines. As such, management recently instituted an Asset Sales Initiative, with a focus on selling balance sheet assets (including Customer ExAlt Trust investments) to enhance cash flows and fund creditor payments and/or operating expenses. Since March 31, 2025, the company sold select Customer ExAlt Trust investments generating $36+ million of gross proceeds. More specifically, the company completed the sale of LP interests held in Customer ExAlt Trusts across three separate transactions in June, July, and August, with the proceeds earmarked for brokerage commissions, beneficiaries of the trusts, related loan repayments, and general working capital purposes.
After updating our model for F4Q25 actuals, we are finetuning our F2026 and F2027 adjusted EPS estimates. On an adjusted business segment attributable to BENF equity holders basis, we forecast net losses per Class A share of $0.44 in F2026 followed by $0.24 in F2027 – down a touch from our prior $0.42 and $0.20 net loss per share estimates, respectively, primarily reflecting a flatter revenue trajectory and inflated expected credit losses given sluggish monetization activity in the near term.
Turning to valuation, no change to our $2.00 price target. The recent CEO turnover adds near-term uncertainty to the company’s strategic direction and ownership profile, particularly given the seemingly contentious nature of the prior CEO’s departure, as well as his holdings of Class B and preferred shares. That said, we still see considerable upside potential for the stock over time, though we recognize a meaningful upward revaluation likely necessitates sustained growth in loan origination volumes driving an inflection in profitability. More tactically, the Nasdaq Stock Market recently granted the company an extension to regain compliance with reporting requirements, as well as the $1.00 share price minimum threshold.
SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR.
DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks SCR provides and Zacks SCR receives payments totaling a maximum fee of up to $50,000 annually for these services provided to or regarding the issuer. Full Disclaimer HERE.