A-Mark Precious Metals(US:AMRK)2025-05-07 21:30Financial Data and Key Metrics Changes - Revenues for fiscal Q3 2025 increased 15% to $3,000,000,000 from $2,600,000,000 in the same year-ago quarter, with an 18% increase when excluding forward sales [6][8] - Gross profit for fiscal Q3 2025 increased 18% to $41,000,000, representing 1.36% of revenue, compared to $34,800,000 or 1.33% of revenue in Q3 of last year [8][9] - Net loss attributable to the company for Q3 2025 totaled $8,500,000 or $0.36 loss per diluted share, compared to net income of $5,000,000 or $0.21 per diluted share in Q3 of last year [15] Business Line Data and Key Metrics Changes - The DTC segment contributed 19% of consolidated revenue in fiscal Q3 2025, while JMB's revenue represented 10% of consolidated revenue, down from 12% in the prior year [6][7] - Gross profit from the DTC segment represented 61% of consolidated gross profit in Q3 2025, up from 52% in Q3 2024 [9] - SG&A expenses for fiscal Q3 2025 increased 46% to $33,400,000, primarily due to increased consulting and professional fees [10][11] Market Data and Key Metrics Changes - Gold sales in Q3 2025 were 432,000 ounces, down 3% from the previous year, while silver sales were 15,700,000 ounces, down 39% from the same period [18][19] - The number of new customers in the DTC segment increased significantly, with 899,600 new customers in Q3 2025, up 1489% from the previous year [20] - The average order value in the DTC segment was $3,084, up 45% from Q3 2024 [21] Company Strategy and Development Direction - The company executed three strategic acquisitions during the quarter, enhancing its competitive position and expanding into higher-margin luxury segments [4] - The company is focused on integrating recent acquisitions and driving operational efficiencies to enhance shareholder value [5][17] - The company remains optimistic about long-term growth opportunities in Asian markets across wholesale and e-commerce channels [5] Management's Comments on Operating Environment and Future Outlook - Management noted that market conditions showed modest improvement, and they remain confident in the company's long-term growth trajectory [5] - The management highlighted the impact of tariffs and backwardation on trading losses and interest expenses during the quarter [3][32] - Management expressed optimism about the demand for precious metals as a safe haven during periods of market volatility [40][50] Other Important Information - The company maintained its regular quarterly cash dividend program, with the most recent dividend paid in April 2025 [17] - The company had $114,300,000 in cash at the end of the quarter, up from $48,600,000 at the end of fiscal year 2024 [16] Q&A Session Summary Question: Market activity post-April - Management observed increased activity in early April, with a solid month overall, despite a slight slowdown in the last weeks [24] Question: Progress in the collectible space - Management reported successful integration of SGI and Pinehurst, with strong demand in the collectible market [26] Question: Impact of backwardation on results - Management explained that backwardation affected trading revenue and gross profit significantly during February and March [31] Question: Earnings power in macroeconomic uncertainty - Management noted that earnings power is historically stronger in active silver markets, but gold's recent performance has been favorable [36] Question: Current stance on acquisitions - Management remains open to acquisitions, particularly when market conditions are slow, and sees potential for further growth through M&A [46] Question: Trends post-Liberation Day - Management reported elevated interest and activity across all business segments throughout April [48] Question: Visibility on long-term holders selling inventory - Management indicated that increased selling by long-term holders could impact supply and demand dynamics [54] Question: Financial impact of improvements in Las Vegas facility - Management expressed confidence that automation improvements would lead to higher volumes and efficiencies [58] Question: Thoughts on stock buybacks - Management stated that stock buybacks are considered alongside other capital deployment strategies, but current focus is on integrating recent acquisitions [66]