SIEBERT FINANCIAL CORP. - 10-K Filing Summary
Business Context and Reporting Period
Company: Siebert Financial Corp. (SIEB)
Filing Type: Annual Report on Form 10-K
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: A diversified financial services firm operating two reportable segments: Financial Services (brokerage, investment advisory, insurance, technology) and Media, Sports, and Entertainment (talent management, music production). The company is headquartered in Miami Beach, FL, with 13 branch offices and 166 full-time employees as of March 24, 2026.
Key Financial Metrics
| Metric | 2025 | 2024 |
|---|---|---|
| Total Revenue | $94.2 million | $83.9 million |
| Net Income | $5.1 million | $13.3 million |
| Earnings Per Share (Diluted) | $0.13 | $0.33 |
| Operating Income | $5.6 million | $17.5 million |
| Total Assets | $759.0 million | $519.7 million |
| Total Liabilities | $669.9 million | $434.6 million |
| Stockholders' Equity | $89.2 million | $84.1 million |
| Cash and Cash Equivalents | $22.4 million | $32.6 million |
| Outstanding Debt | $9.1 million | $4.2 million |
Note: Debt includes a $5.0 million draw on the East West Bank credit facility and a $4.1 million mortgage balance.
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 12.3% to $94.2 million, driven primarily by a 51% increase in stock borrow/stock loan revenue ($29.0 million) and a 20% increase in principal transactions ($17.5 million).
- Profitability Decline: Net income decreased 61.5% to $5.1 million. This was caused by a 33% increase in total expenses ($88.6 million), largely due to higher employee compensation ($58.5 million) driven by new business line expansion and technology investments.
- Interest Income: Interest, marketing, and distribution fees declined 14.8% to $27.6 million due to lower interest rates.
- Segment Performance:
- Financial Services: Operating income dropped from $17.6 million to $6.8 million.
- Media, Sports & Entertainment: Operating loss widened from $0.1 million to $1.2 million due to first-year costs associated with music production and artist development following the acquisition of Big Machine Rock assets.
- Balance Sheet: Assets increased significantly due to a rise in securities borrowed ($408.5 million) and securities loaned ($407.3 million), reflecting expanded securities lending activity.
Guidance, Outlook, and Risks
Management Commentary & Outlook:
- Management is focusing on diversifying revenue through investment banking and expanding technology platforms (Retail Platform) to improve operational efficiency.
- The Media segment is expected to remain unprofitable in the near term as the company builds its music catalogue and athlete pipeline, with profitability anticipated as the catalogue matures.
- Technology investments, including a partnership with FusionIQ, are intended to support scalable growth and modernize client platforms.
Key Risks & Contingencies:
- Regulatory Risk: Extensive regulation by SEC, FINRA, and state authorities; potential for increased compliance costs under Regulation Best Interest.
- Cybersecurity: Significant exposure to cyber-attacks and data breaches; the company maintains $15 million in cybersecurity insurance.
- Market Volatility: Revenue is highly correlated with market activity and interest rates; a decline in trading volume or rates could compress margins.
- Concentration Risk: The Gebbia family controls approximately 42% of outstanding common stock, exerting significant influence over corporate decisions.
- Contractual Obligations: A $5 million settlement fee payable to Kakaopay over ten quarterly installments; early termination fees up to $10 million associated with the NFS clearing agreement.
Investor Verification Checklist
- Expense Trajectory: Verify if the 33% increase in operating expenses is sustainable or if cost-cutting measures are planned to restore margins.
- Media Segment Viability: Assess the timeline for the Media, Sports, and Entertainment segment to reach profitability given the widening operating loss.
- Interest Rate Sensitivity: Review the impact of potential Federal Reserve rate cuts on the company's net interest margin, which is a significant revenue driver.
- Debt Covenants: Confirm continued compliance with debt covenants, specifically the minimum net capital requirements ($45 million for MSCO) and liquidity ratios.
- Stock Liquidity: Note the limited public float (approx. 35% held by non-affiliates) and the potential for price volatility due to the Kakaopay holding (20% of equity).