A-Mark Precious Metals(AMRK) - 2025 Q3 - Earnings Call Transcript

Financial 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 [7][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 [14] Business Line Data and Key Metrics Changes - The DTC segment contributed 19% of consolidated revenue in Q3 2025, while JMB's revenue represented 10% compared to 12% in the prior year [7][8] - Gross profit from the DTC segment represented 61% of consolidated gross profit in Q3 2025, up from 52% in Q3 2024 [9][10] - 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% [17] - The number of new customers in the DTC segment increased 1489% in Q3 2025, with a total of approximately 4,100,000 customers at the end of the quarter, a 64% increase from the prior year [18][19] 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][5] - The company is optimistic about long-term growth opportunities in Asian markets and aims to scale the LPM brand alongside other portfolio assets [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 CEO highlighted that the company is focused on integrating recent acquisitions and driving efficiencies throughout the business [20] Other Important Information - The company amended its credit facility, now having a revolving commitment of $467,000,000, and maintained its regular quarterly cash dividend program [16] - The company reported a tangible net worth of $315,700,000 at the end of the quarter, up from $306,000,000 at the end of the prior fiscal year [15] Q&A Session Summary Question: Market activity post-April - Management observed increased activity post-April 2, with a solid month for the company despite some recent slowdown [22][23] Question: Collectible space progress - Management reported good integration of recent acquisitions in the collectible space, with impressive auction demand noted [24][25] Question: Impact of backwardation - Management explained that backwardation negatively impacted results, similar to conditions experienced post-COVID, but noted a return to more normalized market conditions [29][30][33] Question: Earnings power in macroeconomic uncertainty - Management indicated that the company historically performs well in active silver markets and noted the current dominance of gold in precious metals [35][36] Question: Current stance on acquisitions - Management remains open to acquisitions, particularly when market conditions are slow, and sees potential for significant customer base growth through these strategies [46][47] Question: Trends post-Liberation Day - Management reported elevated interest and activity across all business segments throughout April, with a correlation to stock market performance [48][49] Question: Visibility on long-term holders selling inventory - Management discussed the supply-demand dynamics when long-term holders sell back into the market, affecting trading performance [54][55] Question: Financial impact of Las Vegas facility improvements - Management expressed confidence that automation improvements will lead to higher volumes and efficiencies without adding more employees [58][60] Question: Thoughts on stock buybacks - Management stated that stock buybacks are considered alongside other capital deployment strategies, with flexibility to adapt based on market conditions [62][65]