BRLT

Brilliant Earth is a no-growth business that just tipped into losses. Revenue has been stuck in a band for four years ($440M in FY2022 vs. $437M in FY2025), and FY2025 swung to a net loss of -$3.63M from small prior profits, with diluted EPS of -$0.25. The more telling number is in the MD&A: Adjusted EBITDA fell to $12.0M from $21.1M — profitability roughly halved year-over-year while sales were flat, and gross margin slipped to 57.5%. ROE is -29.6%. This is a brand with genuine equity (digitally-native omnichannel, ethically-sourced positioning, mid-50s gross margins) but no demonstrated operating leverage.

Two filing-specific items darken the picture. First, the FY2025 result was flattered by a $7.8M non-cash gain from writing the Tax Receivable Agreement liability to zero — strip that out and the underlying operating deterioration is materially worse than the headline -$3.63M suggests. Second, management recorded a full valuation allowance on its deferred tax assets in Q4 2025, judging it 'more likely than not' those benefits won't be realized — an internal signal that the company itself does not expect enough future taxable income to use them. Cash also fell 51% to $79.1M even though operating cash flow was positive ($9.72M) against modest capex ($3.97M); the drain came from financing (long-term debt paid to zero, ~$3.79M dividends), not operations.