A-Mark Precious Metals, Inc. (AMRK) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
Despite a 32% revenue increase, A-Mark experienced a net loss and significant EBITDA decline, raising investor concerns. The Q&A highlighted uncertainties in gold market dynamics and unclear management responses on key issues, particularly regarding backwardation impacts and long-term gold holders' actions. While acquisitions and DTC expansion are positives, the negative financial metrics and uncertainties overshadow these. Additionally, the absence of strong guidance or a new partnership announcement further dampens sentiment. Given these factors, a negative stock price reaction is expected over the next two weeks.
Key Financial Performance
Revenue Q3 2025 $3 billion, an increase of 15% from $2.6 billion in Q3 2024 due to higher average selling prices of gold and silver, partially offset by a decrease in gold and silver ounces sold.
Gross Profit Q3 2025 $41 million, an increase of 18% from $34.8 million in Q3 2024, due to higher gross profits from the DTC segment, partially offset by lower gross profits from the Wholesale Sales & Ancillary Services segment.
SG&A Expenses Q3 2025 $33.4 million, an increase of 46% from $22.9 million in Q3 2024, primarily due to increased consulting and professional fees, compensation expenses, and expenses incurred by newly consolidated subsidiaries.
Depreciation and Amortization Expense Q3 2025 $5 million, an increase of 69% from $2.9 million in Q3 2024, primarily due to increased amortization expense related to intangible assets acquired through recent acquisitions.
Interest Income Q3 2025 $6.7 million, a slight increase of 0.6% from $6.7 million in Q3 2024, due to an increase in other finance product income.
Interest Expense Q3 2025 $13 million, an increase of 31% from $9.9 million in Q3 2024, primarily due to increased product financing arrangements and liabilities on borrowed metals.
Net Loss Q3 2025 $8.5 million, compared to net income of $5 million in Q3 2024, primarily due to lower net income before provision for income taxes and increased acquisition costs.
Adjusted Net Income Q3 2025 $5.7 million, a decrease of 51% from $11.6 million in Q3 2024, primarily due to lower net income before provision for income taxes and higher acquisition costs.
EBITDA Q3 2025 $1.3 million, a decrease of 90% from $12.6 million in Q3 2024, primarily due to lower net income.
Cash at Quarter End Q3 2025 $114.3 million, compared to $48.6 million at the end of fiscal year 2024.
Tangible Net Worth Q3 2025 $315.7 million, up from $306.0 million at the end of the prior fiscal year.
Credit Facility Q3 2025 $467 million revolving commitment after amending the credit facility.
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Operating Highlights
New Product Launches: Successfully launched both retail and wholesale trading capabilities with the LPM acquisition.
Market Expansion: Executed three strategic acquisitions: Pinehurst Coin Exchange, Spectrum Group International, and AMS Holding, expanding into higher-margin luxury segments and Asian markets.
Operational Efficiencies: Identified numerous opportunities to drive operational efficiencies through hardware upgrades and automation technology in Las Vegas.
Strategic Shifts: Consolidation efforts to eliminate operational redundancies and support increased transaction volume.
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Risk or Challenges
Market Conditions: Early quarter concerns around tariffs led to decreased market liquidity and backwardation, contributing to trading losses and higher interest expense due to increases in product financing rates.
Acquisition Costs: One-time acquisition-related costs of $4.6 million and a one-time remeasurement loss of $7 million on the Pinehurst Coin Exchange.
Interest Expense: Interest expense increased 31% to $13 million, primarily due to an increase of $2 million related to product financing arrangements.
Sales Volume Decline: Sales of gold and silver ounces decreased, with gold sales down 3% year-over-year and silver sales down 39%.
Economic Factors: The company faced headwinds from volatile market conditions, impacting overall performance and profitability.
Customer Acquisition Costs: Increased consulting and professional fees, including one-time acquisition costs of $2.4 million, contributed to higher SG&A expenses.
Loan Portfolio: The value of the secured loan portfolio decreased by 25% from the prior year period.
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Guidance & Outlook
Strategic Acquisitions: Executed three strategic acquisitions: Pinehurst Coin Exchange, Spectrum Group International, and AMS Holding, LLC, enhancing competitive position and expanding into higher-margin luxury segments.
Operational Efficiencies: Integration of acquired businesses expected to yield immediate and long-term cost efficiencies, eliminating operational redundancies and supporting increased transaction volume.
Automation Investment: Continued investment in automation technology in Las Vegas to process higher volumes while reducing operational costs.
Market Expansion: Optimistic about long-term growth opportunities in Asian markets across wholesale and e-commerce channels.
Revenue Growth: Revenues for fiscal Q3 2025 increased 15% to $3 billion, with expectations of continued growth due to higher average selling prices.
Gross Profit: Gross profit for fiscal Q3 2025 increased 18% to $41 million, indicating a positive trend.
Long-term Outlook: Confident in A-Mark’s long-term growth trajectory and ability to deliver shareholder value.
Dividend Policy: Regular quarterly cash dividend program maintained at $0.20 per common share, with the next payment expected in August 2025.
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Shareholder Return Plan
Quarterly Cash Dividend: A-Mark’s Board of Directors has continued to maintain the company’s regular quarterly cash dividend program of $0.20 per common share. The most recent quarterly cash dividend was paid in April. It is expected that the next quarterly dividend will be paid in August 2025.
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Key Q&A
Q:Can you just kind of talk about what you’ve seen in the market to your quarter-to-date?
A:Post April 2, we saw an increased level of activity. We were happy to see that based on what we went through the quarter we just described. But yes, in the first couple of weeks of April, we were very active and I believe the business is operating very efficiently. Things have slowed down a little bit the last week or two. But all in all, April was a very solid month for us.
Q:Can you just kind of talk about the progress you’ve seen in the Collectible space and the outlook on the business?
A:We closed the SGI deal as well as the Pinehurst deal within the quarter, our Q3. We’ve done a good job in my opinion of integrating the businesses, and the businesses are operating as we would expect them to. The market has been active in the Collectible space, particularly at the Stack’s Bowers division.
Q:Can you explain how backwardation impacted your results? And when was the last time A-Mark experienced backwardation?
A:The last time that backwardation was material and affected us was right after the COVID. In general, the company carries a very large short position, which hedges our inventory. The difference in backwardation is that you’re paying to be short. It disrupted our GP in that area fairly significantly in February and March.
Q:At a high level, how should we think about A-Mark’s earnings power in a period of macroeconomic uncertainty but a one-way trade in gold?
A:If you go back historically with A-Mark, we make most of our money in a very active silver market. We did see the company and the earnings power perform very well in a gold-dominated market. There’s a little bit of frozen behavior right now as to – is gold going to $5,000, is gold going back to $2,500? We’re just not sure on that.
Q:What is your current stance on acquisitions and whether your M&A focus has shifted at all following the acquisitions you closed in the quarter?
A:I want to be very active in acquisitions when the markets are slow. I feel very good and confident about the acquisitions we’ve closed. There are still a number of things we’re looking at. We will continue to deploy capital in acquisitions.
Q:Are you still seeing more favorable elevated customer activity kind of relative to normalized demand?
A:We are definitely seeing elevated interest throughout April. There does seem to be a bit more of a correlation right now in our businesses as it relates to what the stock market and equities are doing.
Q:Do you have any visibility on long-time gold owners selling their own inventory? How does that impact your earnings power?
A:The more long-term holders of precious metals that sell back into the market, it’s going to create supply situations that are different than when you have the reverse of that. It does affect throughout.
Q:Does the improvements made to your Las Vegas facility translate into higher volumes and slightly better margins?
A:We believe that the automation that we’ve created in the facility allows us to bring in more third-party shippers and other third-party inventories into the facility. We likely will be able to do 50% to 75% more packages a week without adding more employees.
Q:What are your current thoughts on buybacks given where shares are trading?
A:We’re always looking at stock buybacks if we believe that is the best use of our capital. We see great opportunity with the market being slow, and we believe that acquisitions, new clients that come with acquisitions, new DTC customers that come, we believe that is a very good long-term use or deployment of capital.
Q:Review of Unclear Management Responses
A:Management's response regarding the impact of long-time gold owners selling their inventory lacked clarity, particularly in terms of specific metrics or data on how this affects earnings power.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
CFO Simpson
Coin Exchange
JMB month
LPM Pinehurst
Pinehurst Coin
Pinehurst SGB
Pinehurst SGI
Roberts
SGB SGI
SGB decrease
SGI acquisition
SGI period
Selling
Simpson Taylor
Thor
acquisition Pinehurst
acquisition amortization
acquisition increase
acquisition interest
acquisition loss
amortization intangible
brand portfolio
change increase
consideration value
decrease income
decrease period
end acquisition
equity interest
interest Pinehurst
loss equity
month period
period decrease
period increase
period month
period number
period ounce
period subsidiary
segment month
subsidiary period
value adjustment
AMRK Transcript
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The earnings call summary shows mixed indicators: strong revenue growth and promising international market expansion, but concerns over tariffs and backwardation remain. Positive developments like strategic acquisitions and automation investments are counterbalanced by declining DTC order values and unclear management responses. The Q&A section highlights optimism in certain areas but also reveals ongoing challenges and uncertainties. Given these factors, the stock price is likely to remain stable, resulting in a neutral prediction.
A-Mark Precious Metals, Inc. (AMRK) Q3 2025 Earnings Call Transcript
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Despite a 32% revenue increase, A-Mark experienced a net loss and significant EBITDA decline, raising investor concerns. The Q&A highlighted uncertainties in gold market dynamics and unclear management responses on key issues, particularly regarding backwardation impacts and long-term gold holders' actions. While acquisitions and DTC expansion are positives, the negative financial metrics and uncertainties overshadow these. Additionally, the absence of strong guidance or a new partnership announcement further dampens sentiment. Given these factors, a negative stock price reaction is expected over the next two weeks.
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The earnings call presents a mixed picture: strong revenue growth contrasts with decreased net income and EBITDA. Despite an optimistic outlook on acquisitions and market expansion, management's vague responses about the Stacks deal's accretiveness and the balancing of dividends, buybacks, and M&A raise concerns. The maintained dividend and share repurchase provide some support, but the decline in gross profit and increased expenses temper optimism. These factors suggest a neutral sentiment, with no strong catalysts for a significant stock price movement in either direction.
AMRK Report
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