Reliance Global Group, Inc. (EZRA) Q2 2026 Earnings Call Transcript

Good day, everyone, and welcome to the Reliance Global Group 2026 second quarter business update. At this time, all participants are placed on a listen-only mode. If you have any questions or comments during the presentation, you may press star 1 on your phone to enter the question queue at any time, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to hand the floor over to your host, Ted Ivas, Investor Relations. Sir, the floor is yours.

Thanks, Matthew. Good afternoon, and thank you for joining Reliance Global Group's 2026 second quarter financial results and business update conference call. On the call with us today are Ezra Bayman, Chairman and Chief Executive Officer of Reliance Global Group, and Joel Markovitz, Chief Financial Officer of Reliance. Earlier today, the company announced its operating results for the quarter ended June 30, 2026, and the press release is posted on the company's website, www.relianceglobalgroup.com. In addition, the company will be filing its quarterly report on Form 10-Q with the U.S. Securities and Exchange Commission today, which can also be accessed on the company's website as well as the SEC's website at www.sec.gov. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212-671-1020. Before Mr. Berman reviews the company's operating results for the quarter end of June 30, 2026, we would like to remind everyone that this conference call may contain forward-looking statements. All statements other than statements of historical facts contained in the conference call, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations are forward-looking statements. The words anticipate, estimate, expect, project, plan, seek, intend, believe, may, might, will, should, could, likely, continued design, and the negative of such terms, in other words, in terms of similar expressions, are intended to identify forward-looking statements. These forward-looking statements are based largely on the company's current expectations and projections about future events and trends that it believes may affect its financial condition, results of operations, strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to several risks, uncertainties, and assumptions as described in the company's Form 10 file with the U.S. Securities and Exchange Commission. Because of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in this conference call may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statement. You should not rely upon forward-looking statements as predictions of future events. Although the company believes that expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, level of activity, performance, or achievements. In addition, neither the company nor any person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The company disclaims any duty to update any of these forward-looking statements. All forward-looking statements attributable to the company are expressly qualified in their entirety by these cautionary statements as well as others made on this conference call. You should evaluate all forward-looking statements made by the company in the context of these risks and uncertainties. Having said that, I'd now like to turn the call over to Mr. Ezra Bayman, Chairman and Chief Executive Officer of Reliance Global Group. Ezra?

Thank you very much, Ted, and good afternoon, everyone. Thank you for joining us today and for your continued interest in Reliance Global Group. The second quarter represented another important step in the evolution of our company. Over the past year, we've worked to simplify our organization, strengthen our balance sheet, and streamline our operations to position reliance for long-term growth. We believe that work is beginning to show not only in our financial results, but also in the strategic direction of the company. As we move into the next phase, we've also strengthened our leadership team with several key appointments. We're pleased to welcome Judah Korman as our Chief Operating Officer, Zach Wilder as our Chief technology officer, and to promote Maudie Bayman to executive vice president. Together, they bring complementary experience in operations, technology, and product development. We believe having the right leadership team is just as important as having the right strategy, and each of these individuals will play an important role as we execute our vision of building a technology-driven insurance company. It's already in play in a big way. At the same time, we've remained disciplined and are managing our insurance operations. Following last year's portfolio realignment, we're operating as a far more focused and efficient organization. Importantly, while we've streamlined the business through the divestiture of non-core operations, we continue to deliver organic growth within our retained insurance operations during the quarter. We believe that demonstrates the strength of our core insurance platform and validates the strategic actions we've taken over the past year. That discipline is reflected in the results we've reported today. We've reduced operating expenses by approximately 28% year over year, improved our net loss by approximately 26%, and continued to strengthen our overall cost structure. While there's still work to do, we believe these results demonstrate that the actions we've taken over the past year are delivering meaningful improvements and creating a stronger foundation for future growth. At the same time, we've continued investing in what we believe is the next phase of Reliance growth with the development of our proprietary AI platform. During the second quarter, we achieved an important milestone in that effort with the successful development and launch of our secure browser automation technology, representing an important step in executing our long-term strategy. For us, artificial intelligence isn't just about chasing the latest trend. It's about solving real business problems. Every day, insurance professionals spend hours navigating carrier websites, processing transactions, and completing repetitive administrative tasks. Those are exactly the kinds of workflow-intensive processes where we believe intelligent automation can improve efficiency, consistency, and customer service. It's already being done. One of our biggest advantages is that we are developing this technology inside our own insurance business. That gives us the opportunity to test it, improve it, and validate it using real-world workflows every day. We believe that what makes the platform stronger while also delivering immediate operational benefits across our own organization. As Reliance continues to enhance the proprietary AI platform, management believes that technology has the potential to strengthen the company's insurance operations, improve operating efficiency, and create new long-term commercialization opportunities. By combining its deep insurance industry expertise with innovative AI capabilities, the company believes it is well-positioned to build a scalable technology platform that complements its core business, diversifies future revenue opportunities, and creates long-term shareholder value. It's important to emphasize that our insurance business remains the foundation of Realize Global Group. Rather than viewing insurance and technology as separate businesses, we see them as highly complementary. Our insurance platform gives us the opportunity to develop technology in a real operating environment, while our technology has the potential to make that business stronger and create new opportunities over time. Looking ahead, our priorities remain straightforward. We'll continue enhancing our AI platform, expanding its deployment across our organization, evaluating commercialization opportunities, and maintaining the disciplined approach that has strengthened our business over the past year. As we execute our strategy, we'll continue evaluating opportunities that leverage our technology and capabilities, strengthening our existing business and support sustainable long-term growth. We believe this disciplined approach positions us to create additional long-term value to our shareholders. When I look at the lines today, I see a company that's much different than it was a year ago. We've built a stronger operating foundation, assembled an outstanding leadership team, and begun executing at what we believe is an exciting long-term growth strategy. We're still early in that journey, but we're encouraged by our progress. Actually, we're very excited by our progress and excited about opportunities ahead. With that, let me turn the call over to our Chief Financial Officer, Joel Markowitz, who will review our financial results.

Thank you, Ezra, and good afternoon, everyone. It's my pleasure to review our consolidated financial results for second quarter ended June 30, 2026. Unless otherwise noted, all figures discussed are approximates. Beginning with the balance sheet, as of June 30, we reported $1.8 million of combined cash and restricted cash, $0.8 million of unrestricted cash, working capital of $1.2 million, and stockholders' equity of $6.6 million. Turning to our operating results. Commissioned income for the quarter was $2.1 million compared to the $3.1 million in the prior year quarter. As we've discussed previously, the decline primarily reflects our portfolio realignment and the divestiture of certain non-core operations partially offset their continued organic growth within certain of our retained insurance businesses. Commissioned expense declined to $0.8 million from $1 million, consistent with the lower commission expense associated with those invested operations. Salaries and wages decreased to $1.6 million from $2.6 million, reflecting lower personnel costs following the investages, together with reduced non-cash share-based compensation expense. General and administrative expenses declined to $1.2 million compared to $1.5 million in the prior year quarter. This improvement reflects the benefits of our one-firm operating model and continued cost discipline. The year-over-year comparison also reflects Scale51-related initiatives in 2026 and acquisition-related activities in 2025. As a result of these efforts, net loss attributable to Reliant Global Group improved to $2 million compared with $2.7 million in the second quarter of last year. The improvement was primarily driven by continued operating efficiencies, lower non-cash share-based comp, and reduced interest expense. The adjusted EBITDA, a non-GAAP financial measure, was a loss of $1.1 million compared to a loss of $0.4 million in the prior year quarter. The year-over-year change primarily reflects lower non-GAAP adjustments in 2026, driven by significantly lower non-cash share-based compensation expense. Together with lower interest expense and depreciation and amortization, these factors were partially offset by the improvement in our GAAP net loss. Overall, we are encouraged by the progress we made during the quarter. While our reported revenue reflects the impact of our strategic portfolio realignment, our results demonstrate continued expense discipline, improved profitability, and ongoing investment in initiatives that we believe will support the company's long-term growth.

Operator, we are now happy to open the lines for any questions. certainly everyone at this time will be conducting a question and answer session if you have any questions or comments please press star one on your phone at this time we do ask that while posing your question please pick up your handset if you're listening on speakerphone to provide optimum sound quality thank you your first question is coming from nicole kaufman from blackridge capital your line is live hi gentlemen thank you guys for taking my questions and congratulations on the great quarter.

You talked a lot about your AI platform and it sounds very exciting, but can you talk about the next major milestones we can expect for the platform over the next six to 12 months?

I tell you the truth, I said to Raymond, it's hard to contain my excitement. What's going on in our office almost on a daily basis, Zach Wilder, our new CTO, who has very deep experience in AI we're having like moon launches every few days things really things I couldn't believe could happen we watch real time things that used to take humans some time to get done we watch them actually being done as we watch them no human intervention whatsoever incredible so we're really really excited that some things we're not talking about yet But it's mind-boggling. I wouldn't believe it myself when I start seeing them. I called one of my board members the other day. After I witnessed something, I said, this is mind-boggling. So I'm just telling you, AI is scary. I hope us humans still have a place to be. But it is exciting when it comes to business.

Yes, I agree. I appreciate that. But when do you expect the AI platform to begin generating revenue?

I would say six to nine months. I think we should be okay with that. Maybe that's a pretty good chance. That may be sooner. But I will say expense reduction is already kicking in because we have functions that are being done by AI that we no longer necessarily need people doing it. Or those people could be focusing on bringing in revenue instead of doing mundane tasks. So either way, both ways, it's good. Reducing expenses, which is already happening in process, and in revenue. So it's really exciting.

Well, I appreciate that insight. If I have any other questions, I'll jump back in the queue. But thanks again for answering my questions today.

Absolutely. Thank you very much for calling.

Thank you. And once again, everyone, if you have any questions or comments, please press star, then one on your phone. Please hold while we poll for questions. Thank you. That concludes our Q&A session. I will now hand the conference back to management for closing remarks. Please go ahead.

Thank you. Before we conclude today's call, I'd like to leave you with a few key takeaways. We continue to execute our strategic priorities while maintaining disciplined expense management and improving our financial performance. We've made meaningful progress advancing our proprietary AI platform and integrating AI capabilities into our insurance operations to enhance productivity, efficiency, and customer care. We remain focused on disciplined capital allocation, operational execution, and prudent investment in initiatives that support our long-term strategy. As we look ahead, we believe the actions we've taken to streamline our operations, strengthen our financial discipline, and advance our AI capabilities, position the company to pursue sustainable long-term growth. On behalf of everyone at Reliance Global Group, thank you for joining us today and for your continued interest. We appreciate your support and look forward to updating you on our progress next quarter. Thank you and have a great day.

Thank you. Everyone, this concludes today's event. You may now disconnect and have a wonderful day. Thank you for your participation.