A-Mark Precious Metals Inc’s Mixed Q3 Earnings Call

A-Mark Precious Metals Inc ((AMRK)) has held its Q3 earnings call. Read on for the main highlights of the call.

A-Mark Precious Metals Inc’s latest earnings call presented a mixed sentiment, highlighting both significant achievements and notable challenges. The company reported impressive revenue growth and strategic acquisitions that have bolstered its market position. However, these positives were tempered by a net loss, a substantial decrease in EBITDA, and increased operating expenses, painting a complex picture of the company’s financial health.

Revenue Growth

A-Mark Precious Metals Inc reported a robust revenue increase for fiscal Q3 2025, with revenues climbing 15% to $3 billion from $2.6 billion in the same quarter of the previous year. Over the nine-month period, revenues rose by 18% to $8.5 billion, up from $7.2 billion in the prior year. This growth underscores the company’s ability to expand its market reach and capitalize on new opportunities.

Strategic Acquisitions

The company completed three strategic acquisitions: Pinehurst Coin Exchange, Spectrum Group International, and AMS Holding, LLC. These acquisitions are expected to strengthen A-Mark’s competitive positioning and allow expansion into higher-margin luxury segments, enhancing its overall market presence.

Increased Gross Profit

A-Mark’s gross profit for fiscal Q3 2025 increased by 18% to $41 million from $34.8 million in the previous year. This increase was primarily driven by higher gross profits from the Direct-to-Consumer (DTC) segment, reflecting the company’s successful efforts in this area.

Customer Growth in DTC Segment

The DTC segment saw a remarkable increase in new customers, with 899,600 new customers in Q3 fiscal 2025, marking a 1489% rise from the previous year. This surge highlights the effectiveness of A-Mark’s customer acquisition strategies and the growing demand for its offerings.

Improved Inventory Turn Ratio

The inventory turn ratio for fiscal Q3 2025 improved to 2.4, a 4% increase from 2.3 in the previous year. This improvement indicates better inventory management and operational efficiency.

Net Loss

Despite the revenue growth, A-Mark reported a net loss of $8.5 million for Q3 fiscal 2025, a stark contrast to the net income of $5 million in the same quarter last year. This loss reflects the financial pressures the company is facing.

Decrease in EBITDA

EBITDA for Q3 fiscal 2025 fell dramatically by 90% to $1.3 million, down from $12.6 million in the previous year. This significant decrease highlights the challenges in maintaining profitability amidst rising costs.

Decrease in Gold and Silver Sales

Sales of gold and silver experienced declines, with gold sales down 3% and silver sales down 39% from the previous year. These decreases suggest a shift in market dynamics affecting precious metal sales.

Increased SG&A Expenses

Selling, General, and Administrative (SG&A) expenses rose by 46% to $33.4 million in Q3 fiscal 2025, up from $22.9 million the previous year. This increase in expenses is a significant factor in the company’s financial performance.

Increased Interest Expense

Interest expenses also increased by 31% to $13 million, compared to $9.9 million in the same quarter of the previous year, adding to the financial burdens faced by A-Mark.

Forward-Looking Guidance

Looking ahead, A-Mark remains focused on integrating its recent acquisitions, optimizing operations, and leveraging its expanded brand portfolio for long-term growth. Despite market challenges, the company achieved a gross profit of $41 million and a non-GAAP adjusted net income of $5.7 million. The DTC segment continues to be a significant growth driver, contributing 19% of consolidated revenue and showing a substantial increase in new customers and average order value.

In summary, A-Mark Precious Metals Inc’s earnings call reflects a company navigating through a complex landscape of growth and challenges. While revenue and customer growth are promising, the financial hurdles such as net loss and decreased EBITDA present areas for improvement. The company’s strategic acquisitions and focus on the DTC segment are pivotal for its future trajectory.