Breaking Down Reliance Global Group, Inc. (RELI) Financial Health: Key Insights for Investors

You're looking at Reliance Global Group, Inc. (RELI) and seeing a stock that's defintely been a wild ride, and you need to know if the underlying financials support the volatility. As a long-time analyst, I can tell you the picture is mixed but shows a critical pivot in 2025. The company's Q1 2025 results, reported in May, saw a net loss of US$1.74 million, which is a significant improvement-a 68% narrowing of the loss from the prior year. More importantly, their Adjusted EBITDA (a cleaner look at core operations) actually flipped to a gain of $145,407 in Q1 2025, up from a loss the year before. That's a major operational shift, but it's still a micro-cap with a $6.96 million market cap, so every dollar matters. Plus, the pending Spetner Associates acquisition-which reported preliminary Q1 2025 net income of nearly $2.98 million-is the real near-term opportunity, and we need to map out just how much that acquisition changes the risk profile.

Revenue Analysis

You need a clear picture of where Reliance Global Group, Inc. (RELI) is making its money, especially after a year of strategic shifts. The direct takeaway is that while the core business remains insurance commission income, the company's Q3 2025 revenue saw a significant dip due to a strategic divestiture, even as its organic, tech-enabled segments show pockets of growth.

The company's primary revenue source is commission income from its insurance distribution channels, anchored by its InsurTech platform, RELI Exchange. This platform uses technologies like artificial intelligence (AI) and cloud-based solutions to help independent insurance agencies compete more effectively, which is the long-term play. But, you still have to watch the near-term numbers.

Here's the quick math on the recent performance: Commission income for the third quarter of 2025 (Q3 2025) totaled $2.5 million, a decrease from the $3.4 million reported in Q3 2024. That's a sharp revenue drop of roughly 26.5% year-over-year for the quarter, and it's defintely something to pay attention to. For the first nine months of 2025, total revenue was $9.82 million, down from $10.76 million for the same period in 2024. This shows the challenge of managing a portfolio transition.

The contribution of different business segments to overall revenue is primarily commission income, but the mix within that is changing. The company is actively focusing on its Property and Casualty (P&C) segment, which saw an 8% increase in revenue during Q2 2025, even as a shift in its medical/health client base caused a modest overall revenue reduction in that quarter. That P&C growth is a positive sign of organic momentum in a key area.

• P&C Insurance: Showing organic growth, up 8% in Q2 2025.
• Medical/Health: Experienced a client base shift, impacting revenue.
• RELI Auto Leasing: A new offering to generate commission revenue for agents.
• Digital Asset Treasury: A non-core initiative for capital appreciation, not operational revenue.

The most significant change in the revenue stream is the divestiture of Fortman Insurance Services (FIS). Reliance Global Group, Inc. completed the sale of this wholly-owned subsidiary for $5 million in Q3 2025, which immediately reduced short-term commission income. The company made this move to focus resources on scaling higher-margin business segments through its RELI Exchange platform. The trade-off is clear: you take a short-term hit to revenue for a long-term focus on higher-margin, tech-enabled growth, plus the sale netted a $3 million gain and helped reduce long-term debt by about 50%. You can read more about the full financial picture in Breaking Down Reliance Global Group, Inc. (RELI) Financial Health: Key Insights for Investors.

To be fair, the Q1 2025 results showed commission income increased by 4% to $4,236,220 compared to Q1 2024, reflecting continued organic growth before the Fortman sale impact hit the Q3 numbers. This is why you must look beyond the most recent quarter's headline number and understand the underlying strategy.

Profitability Metrics

You're looking at Reliance Global Group, Inc. (RELI) and want to know if their strategic shift is translating to real profit. The direct takeaway is that while the core insurance brokerage business shows a solid gross margin, operating expenses-especially non-cash compensation-are driving significant net losses, keeping the company far below industry profitability benchmarks in 2025.

The company's focus on its tech-enabled RELI Exchange platform and the 'OneFirm' efficiency initiative is a long-term play, but near-term results are volatile. You see this clearly in the quarterly numbers, which reflect both the streamlining efforts and the impact of the Fortman Insurance Services (FIS) asset sale.

Gross Profit and Margin Trends

Gross profit for an insurance broker is essentially the commission income minus the commission expense paid to agents or sub-brokers. In 2025, Reliance Global Group, Inc.'s gross margin has been inconsistent, which is a red flag for operational stability. Here's the quick math on the first three quarters:

The gross margins, ranging from 60.0% to 68.1% in 2025, are defintely below the industry average of 83% to 94% for insurance brokerages. This suggests Reliance Global Group, Inc. is paying a higher percentage of its commission income out in commission expense, or its revenue mix is skewed toward lower-margin products. The sharp drop in Q3 to $2.50 million in revenue and a 60.0% margin is largely due to the divestiture of FIS.

Operating and Net Profitability Challenges

The real challenge for Reliance Global Group, Inc. lies below the gross profit line, in operating and net profitability. The company is currently operating at a loss, but you need to look past the GAAP net loss to understand the core business performance.

• Q1 2025: Adjusted EBITDA (AEBITDA), a non-GAAP measure often used as a proxy for operating profit, was actually a small gain of $145,407.
• Q2 2025: AEBITDA swung to a loss of $382,000.
• Q3 2025: AEBITDA loss widened to $0.7 million.

This trend shows the core operations are struggling to maintain a positive cash-flow-based profit. For context, the median EBITDA margin for private insurance agencies in 2025 is around 22%. Reliance Global Group, Inc.'s AEBITDA figures are a fraction of revenue and mostly negative, showing a significant operational gap.

The Net Loss is even starker, though it includes non-cash items. In Q3 2025, the reported Net Loss of $1.2 million was after recognizing an approximate $3.0 million gain from the FIS sale. This means the loss from ongoing operations, before that one-time gain, was closer to $4.2 million. The Net Margin for Q3 was a steep -48.0%, compared to the industry average net profit margin of 10% to 20%.

Operational Efficiency and Cost Management

The company is actively working to improve its operational efficiency, citing its 'OneFirm' strategy. This is a crucial area to monitor. While salaries and wages increased to $3.9 million in Q3 2025, a large part of that increase-approximately $2.7 million-was non-cash stock-based compensation. This non-cash expense inflates the GAAP operating loss but doesn't affect immediate cash flow. Still, it dilutes shareholder equity over time.

The debt reduction is a clear positive action. By repaying about $5.6 million of long-term debt from the asset sale proceeds, they reduced their annual debt service by over $1.8 million. That move will provide a tangible, recurring boost to future net income and cash flow. For more on the long-term vision behind these moves, you can review the Mission Statement, Vision, & Core Values of Reliance Global Group, Inc. (RELI).

Debt vs. Equity Structure

You're looking at Reliance Global Group, Inc.'s (RELI) balance sheet, and the first thing to check is how they fund their growth-is it mostly debt or shareholder money? The quick takeaway is that the company has made a major move this year to de-risk its capital structure, shifting from a highly leveraged position to one that's much more balanced and closer to the industry norm.

As of the most recent data (TTM, or trailing twelve months), Reliance Global Group, Inc.'s total debt stands at about $7.06 million, with total equity at a much-improved $6.8 million as of the third quarter ending September 30, 2025.

Here's the quick math on the leverage picture. The company's latest Debt-to-Equity (D/E) ratio is approximately 1.05. This is a huge change. To be fair, the D/E ratio was as high as 4.94 earlier in the year (Q1 2025), which would have been a significant red flag for any analyst. A D/E ratio of 1.05 means that for every dollar of shareholder equity, the company has about $1.05 in debt.

To put that 1.05 in context, the median D/E ratio for the Insurance Agents, Brokers, and Service industry is typically around 1.33. So, Reliance Global Group, Inc. has moved from being significantly more leveraged than its peers to being slightly below the industry median, which is defintely a positive sign for financial stability.

The dramatic shift in the D/E ratio is a direct result of a strategic deleveraging (reducing debt) move in 2025. In July, Reliance Global Group, Inc. repaid approximately $5.55 million of its long-term debt, which was about 50% of its total long-term obligations at the time. This action was primarily funded by the $5.0 million in cash proceeds from the sale of a subsidiary, Fortman Insurance Services. This one action alone is expected to reduce their annual debt service payments by over $1.8 million, or 61%. That's a meaningful boost to cash flow.

The company's financing strategy clearly favors a balance, but the recent actions show a strong preference for using asset sales to pay down debt and strengthen the balance sheet before pursuing growth initiatives. This approach is about creating a strong foundation, which aligns with their focus on the RELI Exchange platform. You can read more about their core strategy here: Mission Statement, Vision, & Core Values of Reliance Global Group, Inc. (RELI).

The balance between debt and equity is now much healthier:

• Used asset sale proceeds (equity-like capital) to repay debt.
• Reduced long-term debt by 50%, cutting interest costs.
• Increased total equity by $3.7 million, or 125%, in Q3 2025.

This is a story of disciplined financial management. They used equity-generating activities (the sale of a non-core asset) to significantly reduce their debt load and annual financial risk, giving them greater flexibility to invest in high-margin, tech-enabled segments like RELI Exchange.

Liquidity and Solvency

You're looking for a clear picture of whether Reliance Global Group, Inc. (RELI) can cover its short-term bills, and the answer is nuanced: the balance sheet is defintely stronger, but core operations still burn cash. Strategic asset sales have provided a crucial liquidity injection, boosting unrestricted cash to $2.6 million and increasing working capital by 284% to $1.6 million as of the end of Q3 2025.

The company made a smart, decisive move by selling Fortman Insurance Services, which not only netted an approximate $3 million gain but also allowed them to cut long-term debt by about 50%. That's a significant structural improvement, but we still need to look closely at the day-to-day ability to pay obligations.

The Liquidity Ratios: A Mixed Signal

When we map out the quick metrics, we get a mixed, if not concerning, signal. The Current Ratio, which compares all current assets to current liabilities, stood at 1.12 as of November 2025. A ratio above 1.0 is generally acceptable, suggesting current assets are sufficient to pay current debts. That's good.

However, the Quick Ratio (or Acid-Test Ratio), which is a stricter measure that excludes less-liquid assets like inventory, was reported near 0 for the period ending September 30, 2025. For an insurance business, inventory isn't a major factor, but a zero-quick ratio implies that immediate liquid assets-cash and receivables-are barely covering or are insufficient to cover current liabilities without relying on collecting receivables or selling other non-core assets. The balance sheet is stronger, but the quick-access cash cushion is thin.

• Current Ratio: 1.12 (Acceptable short-term coverage).
• Quick Ratio: Near 0 (Immediate cash coverage is weak).
• Working Capital: $1.6 million (Up 284% year-over-year).

Working Capital and Balance Sheet Strength

The biggest near-term strength is the dramatic improvement in working capital (Current Assets minus Current Liabilities). It grew by $1.2 million to a positive $1.6 million in Q3 2025. This turnaround is a direct result of the Fortman sale and subsequent debt pay-down. Here's the quick math: they took the sale proceeds, paid down debt, and saw unrestricted cash jump by 590% to $2.6 million. That cash runway is now much longer than it was a year ago.

This structural change in the balance sheet is what gives management the flexibility to pursue their growth strategy, including the Mission Statement, Vision, & Core Values of Reliance Global Group, Inc. (RELI). They're using this capital to focus on the higher-margin RELI Exchange platform and even declared a special cash dividend of $0.03 per share, payable in December 2025. The balance sheet is now more resilient.

Cash Flow Statement Overview: The Operating Drag

The cash flow statement tells a different, more cautious story about the core business's profitability. Reliance Global Group, Inc. (RELI) has consistently shown negative Operating Cash Flow (OCF)-the cash generated or used by its main business activities. For the 2025 fiscal year (trailing twelve months), OCF was approximately $-852.51K, and Free Cash Flow (FCF) was around $-1.56 million. This negative OCF is the operating drag that requires external funding or asset sales to cover.

The recent liquidity boost came entirely from Investing and Financing activities. The Investing Cash Flow was positively impacted by the $5 million Fortman sale. On the Financing side, the company used capital to reduce debt but also strategically invested in a digital asset treasury, acquiring positions in Bitcoin, Ethereum, and other digital assets. This is an aggressive move to diversify the treasury, but it's still a use of cash. The key risk remains: the core insurance operations must transition to positive cash generation to sustain growth without further reliance on asset monetization.

The next step for you is to monitor Q4 2025 OCF closely. If the OneFirm initiative and RELI Exchange strategy are working, we should see that negative number shrink dramatically.

Valuation Analysis

You want to know if Reliance Global Group, Inc. (RELI) is a value play or a trap. The direct takeaway is that its traditional valuation metrics are unreliable due to negative earnings, but the stock is trading significantly below its consensus analyst price target, suggesting a massive potential upside-if the company can execute a turnaround.

As of November 2025, Reliance Global Group, Inc. (RELI) is a micro-cap stock with a market capitalization of roughly $7.11 million. When we look at the core valuation multiples, we hit a wall right away because the company is not profitable on an earnings basis over the trailing twelve months (TTM).

Here's the quick math on key TTM valuation ratios:

• Price-to-Earnings (P/E): -0.7x
• Enterprise Value-to-EBITDA (EV/EBITDA): -3.78
• Price-to-Book (P/B): 1.61

The negative P/E ratio of -0.7x and the negative EV/EBITDA ratio of -3.78 tell you the company has negative earnings per share (EPS) and negative Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA). This means we can't use these ratios to compare it to profitable peers; you must focus on the Price-to-Book (P/B) of 1.61 and the Price-to-Sales (P/S) ratio, which is around 0.52. Honestly, a P/B of 1.61 isn't excessive, but it's still above 1.0, so the stock isn't trading below its book value.

Stock Performance and Analyst Sentiment

The stock price trend over the last year is defintely concerning. The stock has fallen by approximately -44.01% over the last 52 weeks, trading near its 52-week low of $0.65, having peaked at a 52-week high of $3.44. This steep decline shows significant market skepticism about the company's ability to turn its TTM revenue of $14.1 million into profit. This kind of volatility is typical for micro-cap stocks, but still, it's a brutal drop.

Still, the analyst community, though small, sees massive potential. The consensus rating is a 'Buy,' with a consensus price target of $7.00. What this estimate hides is that the most recent ratings are from April 2024, but that target still implies an upside of over 780% from the current price of around $0.72. That's a huge gap, which suggests analysts believe a significant re-rating will occur once the company shows sustained profitability or a major strategic win. You need to weigh that high target against the stock's actual performance since that rating was issued.

Dividend Policy

Reliance Global Group, Inc. (RELI) does not offer a significant dividend yield. While the company did pay a dividend of $0.03 per share with an ex-dividend date of October 30, 2025, the current dividend yield is effectively 0.00%. The payout ratio is not applicable (N/A) because the company has negative earnings per share (EPS), meaning the dividend is not covered by profits. This is not an income stock; any dividend is more likely a special distribution rather than a sustainable, recurring payout.

To dive deeper into the institutional interest and trading dynamics behind this valuation, you should read Exploring Reliance Global Group, Inc. (RELI) Investor Profile: Who's Buying and Why?

Next step: Check the company's Q3 2025 earnings call transcript for management's specific plan to achieve the profitability needed to justify the $7.00 price target.

Risk Factors

You need to be a trend-aware realist when looking at Reliance Global Group, Inc. (RELI). While the company has made deliberate moves to strengthen its balance sheet in 2025, there are still significant, near-term risks that could affect its financial health. The core takeaway here is that RELI is in a high-stakes transition, moving from an acquisition-heavy model to a technology-driven one, and that shift carries substantial volatility.

Honestly, the most glaring internal risk is the company's financial distress signal. Based on current financial models like the Altman Z-Score, the probability of financial distress for Reliance Global Group is noted as above 80%, suggesting a very high chance of financial straits over the next couple of years. This is the big one. Plus, while the Q3 2025 results showed a strengthening of liquidity, the core business's profitability remains a challenge. The net loss for Q3 2025 actually widened to $1.2 million, up from $0.8 million in the prior year, driven primarily by non-cash equity compensation.

Here's the quick math on recent operational and financial risks:

• Revenue Dip from Divestiture: Commission income in Q3 2025 totaled $2.5 million, a noticeable drop from $3.4 million in Q3 2024. This was expected because of the sale of Fortman Insurance Services (FIS).
• Adjusted EBITDA Loss: The Adjusted EBITDA (a non-GAAP metric) for Q3 2025 flipped to a loss of $700,000, compared to a gain of $40,000 in the same quarter last year. This reflects fluctuations in commission accounts and the inherent competitiveness of the insurance sector.
• Scaling Risk: The company's growth hinges on successfully scaling the RELI Exchange platform and integrating new initiatives like RELI Auto Leasing. Failure to gain market traction here is a direct threat to future revenue projections.

The biggest external and strategic risk is the Digital Asset Treasury (DAT) initiative. This program involves strategically acquiring positions in volatile digital assets, including Bitcoin, Ethereum, Cardano, XRP, and Solana. What this estimate hides is the extreme market volatility and the fast-moving regulatory landscape surrounding cryptocurrencies. The success of this strategy is defintely not guaranteed and could introduce significant, unpredictable swings to the balance sheet.

Still, the company is taking clear actions to mitigate these financial and operational risks, which is crucial for any investor to see.

The debt reduction is a major positive step; lowering annual debt service obligations by approximately 61% gives them a lot more financial breathing room. But remember, the core business still operates in a highly competitive InsurTech and insurance brokerage environment. You can read more about the long-term strategic direction here: Mission Statement, Vision, & Core Values of Reliance Global Group, Inc. (RELI).

Growth Opportunities

You're looking for a clear path forward, and Reliance Global Group, Inc. (RELI) is defintely executing a sharp pivot from a traditional agency model to a leaner, tech-focused InsurTech platform. The core takeaway is this: the company is aggressively de-leveraging and focusing resources on its most scalable assets, which should drive margin expansion, even if it means some short-term revenue choppiness.

The strategic sale of Fortman Insurance Services (FIS) for $5 million in the third quarter of 2025 was a key move, netting an approximate $3 million gain. Here's the quick math: they immediately used that capital to reduce long-term debt by roughly 50%, or about $5.6 million, which cuts annual debt service by over $1.8 million. That's a huge boost to future cash flow and financial flexibility. A stronger balance sheet always supports growth.

• Product Innovations: The B2B RELI Exchange platform and B2C 5minuteinsure.com (which uses AI) are the future.
• Market Expansion: The launch of RELI Auto Leasing in Q1 2025 gives their agency partners a compelling new revenue stream without needing auto finance expertise.
• Acquisition Upside: The planned Spetner acquisition, which was nearing completion in early 2025, was expected to nearly double annual revenue to approximately $28 million.

Financial Momentum and Earnings Estimates

While the divestiture of Fortman decreased Q3 2025 commission income to $2.5 million, the underlying operational efficiency is showing up in other places. For instance, the first quarter of 2025 saw commission income revenue increase by 4% to $4,236,220, reflecting organic growth. More importantly, the Adjusted EBITDA (AEBITDA) in Q1 2025 swung to a gain of $145,407, a massive 297% improvement over the prior year's loss. This shows the 'OneFirm' operational streamlining is working.

What this estimate hides is the full-year impact of the Spetner integration and the cost savings from the 61% reduction in annual debt service. The market is noticing the improved financial structure, too. As of Q3 2025, unrestricted cash increased approximately 590% to $2.6 million, and working capital grew by 284% to $1.6 million. They're building a much more resilient foundation.

Strategic Initiatives and Competitive Edge

The company's most forward-looking initiative is the Digital Asset Treasury (DAT), which positions Reliance Global Group, Inc. at the convergence of InsurTech and decentralized finance. This isn't just about holding crypto; it's about building a technological foundation for scalable solutions. They've strategically acquired positions in leading digital assets, including Bitcoin, Ethereum, Cardano, XRP, and Solana. This is a smart, diversified treasury approach.

This early adoption of blockchain technology is a clear competitive advantage. Industry studies show blockchain can reduce operational costs in insurance by up to 30% through automation and fraud prevention. Plus, they're showing shareholder commitment by declaring their first-ever dividend, a $0.03 per share special cash dividend payable in December 2025. You can read more about their long-term vision in their Mission Statement, Vision, & Core Values of Reliance Global Group, Inc. (RELI).