BCG — Q2 2026 Financial Report Analysis

Binah Capital Group's revenue rose 12.1% to $46.5 million in the second quarter of 2026 (three months to June 30), and the company swung to a GAAP net profit of $0.34 million from a $0.65 million loss a year earlier. Rising stock markets did most of the work: client assets on Binah's platforms grew 13.4% to $31.6 billion, even though clients took a net $2.2 billion out during the quarter. After paying dividends on its preferred stock, nothing was left for ordinary shareholders — diluted EPS was $(0.00), versus $(0.06) a year ago.

At a glance

• Revenue +12.1% to $46.5 million — growth came from insurance product sales and from fees that rise automatically when clients' investments gain value, not from new client money.
• Net new assets −$2.2 billion — about 7.6% of the $29.0 billion Binah started the quarter with left on a net basis, versus −$0.9 billion a year earlier; markets added $4.8 billion and masked it.
• GAAP net income $0.34 million, but $(0.06) million for common shareholders — $0.40 million of preferred-stock dividends more than used up the profit.

What Binah does, and why its "revenue" is mostly pass-through

Binah owns ten firms — four broker-dealers, three registered investment advisers and three insurance agencies — with over 1,600 registered individuals. An independent broker-dealer is the licensed firm that financial advisors who run their own practices sign up with: it holds the regulatory licenses, supervises them, and arranges for trades to be processed through outside clearing firms. The advisor keeps most of what the client pays.

That last point matters for reading the numbers. Binah books the full commission or fee as revenue, then pays most of it back to advisors. In Q2 that payout was 80.71% of revenue (80.59% a year ago); advisors' payout rate climbs from 50% to 94% as their annual production grows. So of the $46.5 million in revenue, $36.7 million went straight out as "commissions and fees," leaving a gross profit (revenue minus advisor payouts — a non-GAAP measure the company defines) of $9.9 million to run the company, pay interest and earn a return.

Results

Operating margin is our calculation from the income statement: pre-tax income of $0.42 million plus $0.52 million of interest expense, divided by revenue. A year ago the same figure was a $0.02 million loss. "n/m" = not meaningful, because the figure changed sign.

Where the revenue growth came from

• Sales-based commissions rose 15.5% to $17.2 million. These are one-time commissions earned when a client buys a product. The filing attributes the gain "primarily" to "an increase in the sales of insurance products."
• Trailing commissions rose 9.2% to $20.9 million. These are small ongoing fees (generally 0.25%–0.50% a year) that fund and annuity companies pay for as long as a client holds the product, so they move with the market value of those holdings. Trail-eligible assets were $22.1 billion at June 30, up from $18.1 billion a year earlier. The filing credits "positive market volatility and positive net asset flows" — though, as the next section shows, flows were negative for the quarter.
• Advisory fees rose 11.0% to $7.4 million. These are percentage-of-assets fees on Binah's own advisory platform, billed quarterly in advance. Advisory assets were $3.3 billion, up 20.5%.

For the first half as a whole, growth was much slower: revenue +5.3% to $95.2 million and sales-based commissions −1.0%, because the first half of 2025 included investment banking revenue that did not repeat.

What the headline numbers hide

Clients are leaving faster, and the market is hiding it. Brokerage assets started the quarter at $26.2 billion, lost a net $2.1 billion to client withdrawals and departures, and gained $4.2 billion from market moves to end at $28.3 billion. Advisory assets saw a further $0.1 billion of net outflow. For the first half, net new assets were −$1.7 billion, versus −$1.1 billion in the first half of 2025. The filing reports the outflow figures but does not explain them (it doesn't say, for example, whether a large advisor group left). For a business paid as a percentage of assets, $2.2 billion leaving in one quarter is the figure that matters most for 2027 revenue, because markets do not rise every quarter.

Most of the profit improvement came from lower stock-based pay, not the core business. Pre-tax income improved by about $1.0 million year on year. EBITDA (earnings before interest, tax, depreciation and amortization) rose from $0.1 million to $1.0 million, but Adjusted EBITDA — which also adds back share-based compensation — only rose from $0.9 million to $1.2 million. The difference is that share-based compensation fell from $0.8 million to $0.2 million. On the measure that strips that out, operations improved by about $0.3 million.

Preferred dividends absorb the profit. Binah's Series A and Series B preferred stock carry 9% and 7% annual dividends, $0.40 million this quarter combined. That turned $0.34 million of net income into a $0.06 million loss for common shareholders. Half of the Series A dividend is paid in more preferred shares rather than cash, so the Series A share count keeps growing (1,662,000 shares at June 30, up from 1,626,000 at December 31).

The preferred stock has a 2028 deadline. Per the filing, Series A shares that have not been converted to common or redeemed earlier "will be redeemed by the Company on the fourth anniversary" of March 15, 2024 — i.e. March 2028 — and the listed redemption price for that anniversary is $16.00 per share. On today's 1.66 million shares that works out to about $26.6 million (our multiplication), against $10.5 million of cash and equivalents at June 30. Holders can instead convert at 1.5 common shares per preferred share; which route they take will likely depend on the common share price.

Debt is manageable for now, with a 2027 step. Binah owed $17.3 million of principal on its Byline Bank term loan (about 7.5% effective rate, maturing December 2029, with $3.0 million of scheduled repayments in each of 2027 and 2028 and $10.2 million in 2029) plus $5.3 million of promissory notes to affiliates (former sellers who are stockholders or key employees) due in 2027. The loan requires senior net leverage of no more than 2.75 times and a fixed-charge coverage ratio of at least 1.20; the filing does not report any breach.

Q1's profit had a one-off in it. First-half net income of $2.2 million includes a $0.7 million "gain contingency" realized in the first quarter (booked in interest and other income). Q2's $0.34 million has no comparable item called out.

Cash conversion is fine but not strong. First-half operating cash flow was $1.7 million against $2.2 million of net income (about 74%), partly because accounts payable and accrued expenses fell by $1.0 million. Commission receivables rose 4.4% since December, to $10.9 million, in line with business volume.

Two smaller items. "Other" expenses (insurance, travel, office, marketing) rose 29.9% to $2.6 million, with no specific explanation in the filing. And Q2 revenue was 4.5% lower than Q1's $48.7 million.

Takeaway: Binah's first-half profit is real but small, and it rests on rising markets: client assets grew $2.6 billion over the quarter only because markets added $4.8 billion while clients withdrew a net $2.2 billion. Until net flows turn positive, the business is growing by riding the market, not by gathering assets — and the $0.40 million-a-quarter preferred dividend and the March 2028 Series A redemption mean ordinary shareholders sit behind a lot of claims.

Outlook

Management gave no numerical guidance; the CEO said the company "remain[s] focused on additional opportunities to bolster our growth this year." Some things are likely by the mechanics:

• Q3 advisory fees should benefit. Advisory fees are billed in advance, and advisory assets ended Q2 at $3.3 billion versus $2.8 billion at the start of the quarter. If the same billing method applies, Q3 fees will be calculated on the higher asset base (our inference).
• Trailing commissions follow markets. With trail-eligible assets at $22.1 billion, a market pullback would hit this $20.9 million-a-quarter line almost immediately.
• Watch net new assets in Q3. One quarter of −$2.2 billion could be one advisor group leaving; a second quarter like that would point to an ongoing problem keeping or recruiting advisors.
• Watch financing. The $5.3 million of affiliate notes due in 2027 and the March 2028 Series A redemption both need refinancing, conversion or cash that Binah does not currently have on its balance sheet.

The next filing should be the Q3 2026 10-Q, likely in mid-November (last year's Q3 10-Q was filed November 13, 2025).

Source: Binah Capital Group Form 10-Q for the quarter ended June 30, 2026 (filed August 13, 2026), and the earnings release filed as Exhibit 99.1 to the August 14, 2026 Form 8-K.