A-Mark Precious Metals(US:AMRK)2025-11-07 21:17Financial Performance - The Company reported revenues of $11.0 billion for fiscal year 2025, indicating significant growth in the bullion and coin markets [312]. - Revenues for the three months ended September 30, 2025 increased by $965.7 million, or 35.6%, to $3.681 billion from $2.715 billion in 2024 [344]. - Revenues for the Wholesale Sales & Ancillary Services segment increased by $589.9 million, or 26.5%, to $2.817 billion in Q3 2025 from $2.227 billion in Q3 2024 [366]. - Revenues for the three months ended September 30, 2025 increased by $375.8 million, or 77.0%, to $863.9 million from $488.1 million in 2024 [384]. - The company completed acquisitions of SGI and Pinehurst in February 2025, and AMS in April 2025, contributing to revenue growth [344]. Customer Metrics - The number of new customers increased by 14,100, or 25.5%, to 69,400 in 2025 from 55,300 in 2024 [386]. - The number of total customers increased by 1,143,300, or 36.6%, to 4,265,400 as of September 30, 2025 from 3,122,100 in 2024 [386]. - Direct-to-Consumer ticket volume related to new customers increased by 13,404 tickets, or 34.8%, to 51,950 tickets in 2025 from 38,546 tickets in 2024 [388]. - Direct-to-Consumer total ticket volume increased by 58,785 tickets, or 35.3%, to 225,363 tickets in 2025 from 166,578 tickets in 2024 [388]. - The Direct-to-Consumer average order value increased by $896, or 30.2%, to $3,863 in 2025 from $2,967 in 2024 [389]. Product and Market Expansion - The Company expanded its product portfolio in February 2025 through the acquisition of Spectrum Group International, which includes Stack's Bowers Galleries, enhancing its presence in the rare coin and currency auction market [294]. - The Company acquired Pinehurst Coin Exchange in February 2025, which is one of the nation's largest e-commerce retailers of modern and numismatic coins [305]. - The Direct-to-Consumer segment includes subsidiaries such as JM Bullion and Goldline, providing a broad array of precious metals products through various e-commerce platforms [298]. - The Wholesale Sales & Ancillary Services segment operates as a full-service precious metals company, offering over 2,000 products in various forms [289]. - The Company operates through three reportable segments: Wholesale Sales & Ancillary Services, Direct-to-Consumer, and Secured Lending [286]. Financial Position and Assets - The company's cash and receivables accounted for approximately 81% of total assets as of September 30, 2025 [414]. - The company's precious metals inventory was valued at $1,223.1 million as of September 30, 2025, down from $1,279.5 million as of June 30, 2025 [439]. - Open inventory purchase commitments totaled $1,571.9 million as of September 30, 2025, compared to $1,149.6 million as of June 30, 2025 [440]. - The Trading Credit Facility provided access to $422.5 million as of September 30, 2025, with a maturity date of September 30, 2027 [418]. Expenses and Profitability - Gross profit increased by $29.5 million, or 67.8%, to $72.9 million, with a gross margin percentage increase to 1.980% from 1.600% in 2024 [347][348]. - Selling, general, and administrative expenses rose by $33.2 million, or 124.8%, to $59.8 million, primarily due to increased compensation and advertising costs [350]. - Gross profit for the three months ended September 30, 2025 increased by $28.2 million, or 120.2%, to $51.7 million from $23.5 million in 2024 [390]. - The Direct-to-Consumer segment's profit margin percentage increased by 117.4 basis points to 5.979% from 4.805% in 2024 [391]. - Selling, general, and administrative expenses increased by $23.9 million, or 175.7%, to $37.5 million from $13.6 million in 2024, primarily due to increased compensation and advertising costs [392]. Interest and Loans - As of September 30, 2025, CFC had $103.6 million in secured loans outstanding, with 8% acquired from third parties and approximately 92% originated by CFC [309]. - Interest income decreased by $1.5 million, or 21.4%, to $5.6 million, attributed to lower average monthly loan balances and fewer loans outstanding [352][353]. - Interest expense increased by $2.6 million, or 26.2%, to $12.6 million, driven by higher overall borrowings and increased interest rates [354]. - The number of secured loans at period-end decreased by 138, or 24.6%, to 424 from 562 [352]. - Interest income in the Secured Lending segment decreased by $0.5 million, or 15.8%, to $2.5 million from $3.0 million in 2024, due to lower average monthly loan balances [398]. Risk Management - The Company utilizes forward contracts to hedge commodity price risks, which can significantly impact revenues from period to period [319]. - The Company uses various strategies to manage risks associated with fluctuations in commodity prices for precious metals, including forward and futures contracts [434]. - Foreign exchange risk is managed through foreign currency forward contracts, with maturities generally less than one week, mitigating exposure to currency fluctuations [467]. - The Company manages interest rate risks by increasing secured loan interest rates in response to rising interest rates, although exposure to interest rate risk is considered not material [469]. Acquisitions and Investments - The Company formed a joint venture with Stack's Bowers Galleries and Pinehurst to acquire a 10% interest in AMS, later acquiring the remaining 90% in April 2025 [306]. - The Company values intangible assets at estimated fair values at acquisition date, utilizing discounted cash flow analysis which requires significant judgment [454]. - Goodwill and other indefinite-lived intangibles are evaluated for impairment annually, with quantitative tests performed if fair value is determined to be less than carrying value [456]. - Other income, net for Q3 2025 increased by $2.0 million, or 1,016.5%, to $2.2 million from $0.2 million in Q3 2024, primarily due to fair value adjustments related to acquisitions [356]. Taxation - Income tax expense for Q3 2025 was $0.7 million, a decrease of $1.1 million, or 62.4%, from $1.8 million in Q3 2024, with an effective tax rate of approximately -212.2% [357]. - The Company estimates its provision for income taxes based on statutory tax rates and tax planning opportunities, recognizing interest and penalties related to uncertain tax positions [458].