A-Mark Precious Metals(US:AMRK)2026-02-05 22:32Financial Data and Key Metrics Changes - Revenues for fiscal Q2 2026 increased 136% to $6.5 billion from $2.7 billion in Q2 of the previous year, with a 69% increase excluding $2.5 billion of forward sales [11] - Net income for Q2 2026 totaled $11.6 million, or $0.46 per diluted share, compared to $6.6 million, or $0.27 per diluted share in the same year-ago quarter [19] - Adjusted net income before provision for income taxes for Q2 totaled $23.2 million, an increase of 74% compared to $13.4 million in the same year-ago quarter [19] - EBITDA for Q2 fiscal 2026 totaled $33.9 million, an increase of 109% compared to $16.2 million in the same year-ago quarter [20] Business Line Data and Key Metrics Changes - Gold sales in Q2 fiscal 2026 were 545,000 ounces, up 17% from Q2 of last year and up 24% from the prior quarter [22] - Silver sales in Q2 fiscal 2026 were 18.6 million ounces, down 15% from Q2 of last year but up 79% from the previous quarter [22] - The number of new customers in the DTC segment was 96,100 in Q2 fiscal 2026, up 47% from Q2 of last year [23] Market Data and Key Metrics Changes - Premium spreads remained tight through the end of 2025, with backwardation in the silver market contributing to trading losses [7] - The problem with backwardation in Q2 has eased, and markets are moving back towards contango, which is positive for trading [9] Company Strategy and Development Direction - The company aims to integrate and realize cost savings and synergies from recent acquisitions while expanding both domestic and geographic reach [25] - The strategic partnership with Tether is expected to enhance liquidity and provide opportunities for growth in the physical gold markets [25][77] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating rapidly evolving market conditions and highlighted increased consumer demand across platforms [7] - The company anticipates a strong quarter ahead, driven by elevated consumer demand and improved premium spreads [9][37] Other Important Information - The company has declared a quarterly cash dividend of $0.20 per share, maintaining its current dividend program [21] - The acquisition of Monex Deposit Company is expected to strengthen offerings and expand customer service capabilities [7] Q&A Session Summary Question: Comparison of gold and silver performance in the December quarter - Management noted a shift back to silver, with silver now representing about 50% of total volume, and premiums for one-ounce silver products have significantly increased [32][33] Question: Impact of widening spreads on profitability - Management indicated expectations for a strong quarter, suggesting widening spreads will positively impact profitability [37] Question: Tether investment impact on profitability - Management anticipates a significant drop in interest expense and improved liquidity due to the Tether investment [44] Question: Ability to maintain product inventory amid surging demand - Management stated that having two mints allows for greater product availability compared to competitors, although some products may still face allocation issues [48] Question: Future expansion of logistics facilities - Management indicated that while there is potential for future facilities, current demand does not necessitate immediate expansion outside the U.S. [54] Question: Non-controlling items impact on GAAP earnings - Management identified Sunshine Mint's facility shutdown as a key issue affecting non-controlling items, but expects improvements moving forward [57] Question: Strategic M&A efforts in light of Tether partnership - Management confirmed that the partnership with Tether supports the ability to engage in larger transactions while continuing to grow in the physical gold markets [83]