Gold.com Inc.
11/05/2026 | Press release | Distributed by Public on 11/05/2026 13:51
Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CAUTIONARY STATEMENT PURSUANT TO THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This Quarterly Report on Form 10-Q ("Form 10-Q") contains statements that are considered forward-looking statements. Forward-looking statements give the Company's current expectations and forecasts of future events. All statements other than statements of current or historical fact contained in this Quarterly Report, including statements regarding the Company's future financial position, business strategy, budgets, projected costs and plans, and objectives of management for future operations, are forward-looking statements. The words "anticipate," "believe," "continue," "estimate," "expect," "intend," "may," "plan," and similar expressions, as they relate to the Company, are intended to identify forward-looking statements. These statements are based on the Company's current plans, estimates and beliefs, and the Company's actual future activities and results of operations may be materially different from those set forth in the forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. Any or all of the forward-looking statements in this Quarterly Report may turn out to be inaccurate. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy, and financial needs. The forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events occurring after the date hereof. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained in this Form 10-Q.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and notes contained elsewhere in this Form 10-Q, and in the audited consolidated financial statements and notes contained in the Form 10-K for the fiscal year ended June 30, 2026. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those factors discussed below and elsewhere in this Quarterly Report.
INTRODUCTION
Management's discussion and analysis of financial condition and results of operations is provided as a supplement to the accompanying condensed consolidated financial statements and related notes to aid in the understanding of our results of operations and financial condition. Our discussion is organized as follows:
•
Executive overview. This section provides a general description of our business, as well as significant transactions and events that we believe are important in understanding the results of operations.
•
Results of operations. This section provides an analysis of our results of operations presented in the accompanying condensed consolidated statements of income by comparing the results for the respective periods presented. Included in our analysis is a discussion of performance metrics; see "Performance Metrics" below.
•
Segment results of operations. This section provides an analysis of our results of operations presented for our four segments:
o
Wholesale Sales & Ancillary Services,
o
Direct-to-Consumer,
o
Minting & Refining, and
o
Secured Lending
comparing results for the periods presented. The prior year amounts of our Minting & Refining segment were not significant and therefore are not presented below.
•
Non-GAAP Measures. This section provides an analysis of our non-GAAP measures with a reconciliation to the most directly comparable U.S. Generally Accepted Accounting Principles ("U.S. GAAP") measure reported on the consolidated financial statements. The Company uses the following two non-GAAP measures:
o
"adjusted net income before provision for income taxes", and
o
"earnings before interest, taxes, depreciation, and amortization", or "EBITDA".
•
Liquidity and financial condition. This section provides an analysis of our cash flows, as well as a discussion of our outstanding debt as of September 30, 2026, sources of liquidity and the amount of financial capacity available to fund our future commitments and other financing arrangements.
•
Critical accounting policies and estimates. This section discusses critical accounting policies that are considered both important to our financial condition and results of operations and require management to make significant judgment and estimates.
•
Recent accounting pronouncements. This section discusses new accounting pronouncements, dates of implementation, and their expected impact on our accompanying condensed consolidated financial statements.
EXECUTIVE OVERVIEW
Our Business
Founded in 1965, Gold.com offers comprehensive solutions for all aspects of the precious metals (gold, silver, platinum, and palladium) and collectibles (including rare coins and currency) value chains. Our vertically integrated platform combines market expertise with state-of-the-art logistics, financing, and minting capabilities to serve customers, collectors, and institutional clients globally. We conduct our operations through four complementary segments: Wholesale Sales & Ancillary Services, Direct-to-Consumer, Minting & Refining, and Secured Lending.
Effective December 2, 2025, the Company changed its name to Gold.com, Inc. and transferred the listing of its common shares from the Nasdaq Stock Market to the New York Stock Exchange ("NYSE"). The shares of the Company are now being traded on the NYSE under the symbol "GOLD" as of December 2, 2025. Prior to December 2025, Gold.com, Inc. was operating as A-Mark Precious Metals, Inc.
Factors Affecting Revenues, Gross Profit, Interest Income, and Interest Expense
Set forth below are the key factors affecting the Company's revenues, gross profit, interest income, and interest expense. These factors may be attributable to both the Company's ongoing business activities as well as from Company acquisitions.
Revenues. The Company enters into transactions to sell and deliver gold, silver, platinum, and palladium to industrial and commercial users, coin and bullion dealers, mints, and financial institutions. The metals are investment or industrial grade and are sold in a variety of shapes and sizes.
The Company also sells and delivers gold, silver, platinum, palladium, and copper products directly to customers and the investor community through its Direct-to-Consumer segment. Customers may place orders online at one of the Company's websites or over the phone.
The Company sells precious metals on forward contracts at a fixed price based on current prevailing precious metal spot prices with a certain delivery date in the future (up to six months from inception date of the forward contract). The Company also uses other derivative products (primarily futures contracts) or combinations thereof to hedge commodity risks. We enter into these forward and futures contracts as part of our hedging strategy to mitigate our price risk of holding inventory; they are not entered into for speculative purposes.
Forward sales contracts by their nature are required to be included in revenues, unlike futures contracts which do not impact the Company's revenue. The decision to use a forward contract versus another derivative type of product (e.g., a futures contract) for hedging purposes is based on the economics of the transaction. Since the volume of hedging can be significant, the movement in and out of forwards can substantially impact revenues, either positively or negatively, from period to period. For this reason, the Company believes ounces sold (excluding ounces sold on forward sales contracts) is a meaningful metric to assess our top line performance.
In addition, the Company earns revenue by providing storage solutions for precious metals and numismatic coins for financial institutions, dealers, investors, and collectors worldwide and by providing storage and order-fulfillment services to our retail customers. The Company also earns fees for facilitating specialized auctions of numismatics, through providing minting and refining services, and from advertisements placed on our Direct-to-Consumer websites. These revenue streams represent less than 5% of the Company's consolidated revenues.
The Company operates in a high volume/low margin industry. Revenues are impacted by three primary factors: product volume, market prices, and market volatility. A material change in any one or more of these factors may result in a significant change in the Company's revenues. A significant increase or decrease in revenues can occur simply based on changes in the underlying commodity prices and may not be reflective of an increase or decrease in the volume of products sold.
During the first fiscal quarter of 2027, 25.3% of our revenues were generated from sales to Tether. A decline in our trading activity with Tether could adversely affect our revenues and operating results.
Gross Profit. Gross profit is the difference between our revenues and the cost of our products sold. Since we quote prices based on the current commodity market prices for precious metals, we often enter into a combination of forward and futures contracts to effect a hedge position equal to the underlying precious metal commodity value, which substantially represents inventory subject to price risk. We enter into these derivative transactions solely for the purpose of hedging our inventory, and not for speculative purposes. Our gross profit includes the gains and losses resulting from these derivative instruments. However, the gains and losses on the derivative instruments are substantially offset by the gains and losses on the corresponding changes in the market value of our precious metals inventory. As a result, our results of operations generally are not materially impacted by changes in commodity prices.
Interest Income. The Company enters into secured loans and secured financing structures with its customers under which it charges interest. CFC originates loans and acquires loan portfolios that are secured by precious metal bullion and numismatic material owned by the borrowers and held by the Company for the term of the loan. Also, the Company offers a number of secured financing options to its customers to finance their precious metals purchases including consignments and other structured inventory finance products whereby the Company earns a fee based on the underlying value of the precious metal ("repurchase arrangements with customers").
Interest Expense. The Company incurs interest expense associated with its lines of credit, notes payable, product financing agreements for the transfer and subsequent re-acquisition of gold, silver, and platinum at a fixed price with a third-party finance company ("product financing arrangements"), and short-term precious metal borrowing arrangements with our suppliers ("liabilities on borrowed metals" and "precious metals leases").
Performance Metrics
In addition to financial statement indicators, management also utilizes key operational metrics to assess the performance of our business.
Gold and Silver Ounces Sold and Delivered to Customers. A key performance metric we utilize is the number of ounces of gold and silver sold and delivered to our customers (excluding ounces recorded on forward contracts). These metrics reflect our business volume without regard to changes in commodity pricing, which also impacts revenue, but can mask actual business trends.
The primary purpose of entering into forward sales transactions is to hedge commodity price risk. Although the revenues realized from these forward sales transactions are often significant, they generally have negligible impact on gross margins. As a result, the Company excludes the ounces recorded on forward contracts from its performance metrics, as the Company does not enter into forward sales transactions for speculative purposes.
Wholesale Sales Ticket Volume. Another measure of our business that is unaffected by changes in commodity pricing is ticket volume (or number of orders processed). Ticket volume for the Wholesale Sales & Ancillary Services segment measures the total number of wholesale orders processed during the period. In periods of higher volatility, there is generally increased trading in the commodity markets, causing increased demand for our products, resulting in higher business volume. During periods of heightened demand, order size per ticket may increase.
Direct-to-Consumer Customers. We are focused on attracting new customers and retaining existing customers to drive revenue growth. We use the following three metrics as revenue growth indicators when assessing our customer base:
•
New Direct-to-Consumer Customers means the number of customers that have registered or set up a new account, made a purchase for the first time during the period, or acquired through investment activity.
•
Active Direct-to-Consumer Customers means the number of customers that have made a purchase during any month during the period.
•
Total Direct-to-Consumer Customers means the aggregate number of customers that have registered or set up an account or have made a purchase in the past.
Direct-to-Consumer Ticket Volume. Ticket volume for the Direct-to-Consumer segment measures the number of product orders processed during the period. In periods of higher volatility, there is generally increased consumer demand for our products, resulting in higher business volume. We use the following three metrics indicators when assessing our ticket volume:
•
Ticket Volume from New Direct-to-Consumer Customers means the number of product orders from new Direct-to-Consumer customers (refer to the definition of new customers above) processed during the period.
•
Ticket Volume from Pre-existing Direct-to-Consumer Customers means the number of product orders from pre-existing Direct-to-Consumer customers processed during the period.
•
Total Ticket Volume from Direct-to-Consumer Customers means the aggregate number of Direct-to-Consumer product orders processed during the period.
Average Order Value. Average order value for the Direct-to-Consumer segment and JMB measures the average dollar value of product orders (excluding accumulation program orders) delivered to the customer during the period.
Inventory Turnover. Inventory turnover is another performance measure on which we are focused and is calculated as the cost of sales divided by the average inventory during the relevant period. Inventory turnover is a measure of how quickly inventory has moved during the period. A higher inventory turnover ratio, which we typically experience during periods of higher volatility when trading is more robust, typically reflects a more efficient use of our capital.
The period of time that inventory is held by the Company varies depending upon the nature of our inventory commitments with customers and suppliers. See Note 6 to the Company's condensed consolidated financial statements for our classifications of inventory by type. When management analyzes inventory turnover on a period over period basis, consideration is given to each inventory type and its corresponding impact on the inventory turnover calculation. For example:
•
The Company enters into various borrowing arrangements that commit the Company's inventory (such as product financing arrangements or liabilities on borrowed metals) for an unspecified period of time. While the Company is able to obtain access to this inventory on demand, this type of inventory tends not to turn over as quickly as other types of inventory.
•
The Company enters into repurchase arrangements with customers under which it holds precious metals which are subject to repurchase for an unspecified period of time. While the Company has legal title to this inventory, the Company is required to hold this inventory (or like-kind inventory) for the customer until the arrangement is terminated or the material is repurchased by the customer. As a result, this type of inventory tends not to turn over as quickly as other types of inventory.
Additionally, our inventory turnover ratio can be affected by hedging activity, as the period over period change of the inventory turnover ratio may be significantly impacted by a period over period change in hedging volume. For example, if trading activity were to remain constant over two periods, but there were significantly higher forward sales in the current period compared to a prior period, the calculated inventory turnover ratio would increase notwithstanding the constancy of the trading volume.
Minting & Refining Metrics. We monitor certain operating metrics to evaluate production activity and capacity utilization within the Minting & Refining segment. These metrics include:
•
Gold and Silver Ounces Minted and Refined means the total ounces of gold and silver minted or refined during the period.
•
Refining Capacity Utilization represents refined ounces processed during the period as a percentage of estimated refining capacity.
Number of Secured Loans. Finally, as a measure of the size of our Secured Lending segment, we utilize the number of outstanding secured loans to customers that are primarily collateralized by precious metals at the end of each quarter.
Non-GAAP Measures
In addition to key operational metrics that are used to assess the performance of our business, management also uses non-GAAP financial performance and liquidity measures. We believe "adjusted net income before provision for income taxes" and "EBITDA" can provide useful information to evaluate our financial performance and liquidity position. Non-GAAP measures do not have standardized definitions and should not be a substitute for measures that are prepared in accordance with U.S. GAAP. For a reconciliation of these non-GAAP measures to the most directly comparable U.S. GAAP measure reported in our condensed consolidated statements of income and condensed consolidated statements of cash flows and a discussion of certain limitations inherent in such measures, refer to the "Non-GAAP Measures" section below.
Fiscal Year
Our fiscal year end is June 30 each year.
Macroeconomic Volatility
Macroeconomic uncertainty and the volatility in the financial markets in recent years have positively affected the Company's trading revenues and gross profit as the volatility of the price of precious metals and numismatics typically results in an increase in the spread between bid and ask prices on these products. Although conditions may fluctuate from period to period, when volatility is high, we historically experience increased demand for products in each of our coin and bar, industrial, and retail businesses. While macroeconomic uncertainty continues to impact our business, its effects have been less pronounced in the current and prior fiscal year. The Company cannot predict the periods during which increased volatility will occur or the level of increased volatility, the effect of volatility and macroeconomic uncertainty on the Company, or whether other effects on the Company and its businesses will materialize in the short or long term.
RESULTS OF OPERATIONS
Overview of Results of Operations
Consolidated Results of Operations for the Three Months Ended September 30, 2026 and 2025
The operating results of our business were as follows (in thousands, except per share and performance metrics data):
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of revenue |
$ |
% of revenue |
$ |
% |
||||||||||||||||||||||||
|
Revenues |
$ |
3,265,269 |
100.000 |
% |
$ |
3,680,766 |
100.000 |
% |
$ |
(415,497 |
) |
(11.3 |
%) |
||||||||||||||||
|
Gross profit |
89,617 |
2.745 |
% |
72,897 |
1.980 |
% |
$ |
16,720 |
22.9 |
% |
|||||||||||||||||||
|
Selling, general, and administrative expenses |
(71,178 |
) |
(2.180 |
%) |
(59,822 |
) |
(1.625 |
%) |
$ |
11,356 |
19.0 |
% |
|||||||||||||||||
|
Depreciation and amortization expense |
(9,074 |
) |
(0.278 |
%) |
(7,583 |
) |
(0.206 |
%) |
$ |
1,491 |
19.7 |
% |
|||||||||||||||||
|
Interest income |
6,313 |
0.193 |
% |
5,571 |
0.151 |
% |
$ |
742 |
13.3 |
% |
|||||||||||||||||||
|
Interest expense |
(12,475 |
) |
(0.382 |
%) |
(12,600 |
) |
(0.342 |
%) |
$ |
(125 |
) |
(1.0 |
%) |
||||||||||||||||
|
Earnings (losses) from equity method investments |
482 |
0.015 |
% |
(908 |
) |
(0.025 |
%) |
$ |
1,390 |
153.1 |
% |
||||||||||||||||||
|
Other (expense) income, net |
(688 |
) |
(0.021 |
%) |
2,233 |
0.061 |
% |
$ |
(2,921 |
) |
(130.8 |
%) |
|||||||||||||||||
|
Losses on foreign exchange |
(829 |
) |
(0.025 |
%) |
(99 |
) |
(0.003 |
%) |
$ |
730 |
737.4 |
% |
|||||||||||||||||
|
Net income (loss) before provision for income taxes |
2,168 |
0.066 |
% |
(311 |
) |
(0.008 |
%) |
$ |
2,479 |
797.1 |
% |
||||||||||||||||||
|
Income tax benefit (expense) |
17 |
0.001 |
% |
(660 |
) |
(0.018 |
%) |
$ |
677 |
102.6 |
% |
||||||||||||||||||
|
Net income (loss) |
2,185 |
0.067 |
% |
(971 |
) |
(0.026 |
%) |
$ |
3,156 |
325.0 |
% |
||||||||||||||||||
|
Net income (loss) attributable to noncontrolling interests |
583 |
0.018 |
% |
(32 |
) |
(0.001 |
%) |
$ |
615 |
1,921.9 |
% |
||||||||||||||||||
|
Net income (loss) attributable to the Company |
$ |
1,602 |
0.049 |
% |
$ |
(939 |
) |
(0.026 |
%) |
$ |
2,541 |
270.6 |
% |
||||||||||||||||
|
Basic and diluted net income (loss) per share attributable to Gold.com, Inc.: |
|||||||||||||||||||||||||||||
|
Basic |
$ |
0.05 |
$ |
(0.04 |
) |
$ |
0.09 |
225.0 |
% |
||||||||||||||||||||
|
Diluted |
$ |
0.05 |
$ |
(0.04 |
) |
$ |
0.09 |
225.0 |
% |
||||||||||||||||||||
|
Performance Metrics:(1) |
|||||||||||||||||||||||||||||
|
Gold ounces sold |
463,000 |
439,000 |
24,000 |
5.5 |
% |
||||||||||||||||||||||||
|
Silver ounces sold |
13,978,000 |
10,391,000 |
3,587,000 |
34.5 |
% |
||||||||||||||||||||||||
|
Inventory turnover ratio |
1.3 |
2.9 |
(1.6 |
) |
(55.2 |
%) |
|||||||||||||||||||||||
|
Number of secured loans at period end |
372 |
424 |
(52 |
) |
(12.3 |
%) |
|||||||||||||||||||||||
(1)
See "Segment Results of Operations" for a description of additional metrics not listed above.
Revenues
|
in thousands, except performance metrics |
|||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of revenue |
$ |
% of revenue |
$ |
% |
||||||||||||||||||||||||
|
Revenues |
$ |
3,265,269 |
100.000 |
% |
$ |
3,680,766 |
100.000 |
% |
$ |
(415,497 |
) |
(11.3 |
%) |
||||||||||||||||
|
Performance Metrics |
|||||||||||||||||||||||||||||
|
Gold ounces sold |
463,000 |
439,000 |
24,000 |
5.5 |
% |
||||||||||||||||||||||||
|
Silver ounces sold |
13,978,000 |
10,391,000 |
3,587,000 |
34.5 |
% |
||||||||||||||||||||||||
Revenues for the three months ended September 30, 2026 decreased $415.5 million, or 11.3%, to $3.265 billion from $3.681 billion in 2025. Excluding a decrease of $1.368 billion of forward sales, our revenues increased $952.9 million, or 50.9%, which was due to higher average selling prices of gold and silver as well as an increase in gold and silver ounces sold. Revenues also increased due to the acquisitions of Monex in January 2026 and SMI in April 2026, whose results were not included in the same year-ago period.
Gold ounces sold for the three months ended September 30, 2026 increased 24,000 ounces, or 5.5%, to 463,000 ounces from 439,000 ounces in 2025. Silver ounces sold for the three months ended September 30, 2026 increased 3,587,000 ounces, or 34.5%, to 13,978,000 ounces from 10,391,000 ounces in 2025. On average, selling prices for gold increased by 23.5% and selling prices for silver increased by 52.7% during the three months ended September 30, 2026 as compared to the prior year.
Gross Profit
|
in thousands, except performance metric |
|||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of revenue |
$ |
% of revenue |
$ |
% |
||||||||||||||||||||||||
|
Gross profit |
$ |
89,617 |
2.745 |
% |
$ |
72,897 |
1.980 |
% |
$ |
16,720 |
22.9 |
% |
|||||||||||||||||
|
Performance Metric |
|||||||||||||||||||||||||||||
|
Inventory turnover ratio |
1.3 |
2.9 |
(1.6 |
) |
(55.2 |
%) |
|||||||||||||||||||||||
Gross profit for the three months ended September 30, 2026 increased $16.7 million, or 22.9%, to $89.6 million from $72.9 million in 2025. The overall gross profit increase was primarily due to an increase in gross profits earned by both the Wholesale Sales & Ancillary Services segment and the Direct-to-Consumer segment, including the acquisitions of Monex and SMI, whose results were not included in the same year-ago period.
The Company's overall gross margin percentage for the three months ended September 30, 2026 increased by 76.5 basis points to 2.745% from 1.980% in 2025. Excluding forward sales that had a negligible impact on the amount of gross profit, our gross margin percentage for the three months ended September 30, 2026 decreased by 72.3 basis points to 3.173% from 3.896%, which was primarily due to lower premium spreads and lower trading profits.
Our inventory turnover ratio for the three months ended September 30, 2026 decreased by 55.2% to 1.3 from 2.9 in 2025. The decrease in our inventory turnover ratio was primarily due to higher inventory balances and lower cost of sales compared to the prior year period.
Selling, General and Administrative Expense
|
in thousands |
|||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of revenue |
$ |
% of revenue |
$ |
% |
||||||||||||||||||||||||
|
Selling, general, and administrative expenses |
$ |
(71,178 |
) |
(2.180 |
%) |
$ |
(59,822 |
) |
(1.625 |
%) |
$ |
11,356 |
19.0 |
% |
|||||||||||||||
Selling, general, and administrative expenses for the three months ended September 30, 2026 increased $11.4 million, or 19.0%, to $71.2 million from $59.8 million in 2025. The change was primarily due to: (i) an increase in compensation expense of $6.7 million, (ii) higher advertising costs of $2.4 million, (iii) an increase in insurance costs of $0.7 million, and (iv) an increase in facilities expense of $0.6 million. Selling, general and administrative expenses for the three months ended September 30, 2026 included $5.2 million of expenses incurred by Monex and SMI, whose results were not included, or were not fully included in the same year-ago period. Excluding the increase from newly acquired subsidiaries, our selling, general and administrative expenses increased $6.2 million from the prior year period.
Depreciation and Amortization Expense
|
in thousands |
|||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of revenue |
$ |
% of revenue |
$ |
% |
||||||||||||||||||||||||
|
Depreciation and amortization expense |
$ |
(9,074 |
) |
(0.278 |
%) |
$ |
(7,583 |
) |
(0.206 |
%) |
$ |
1,491 |
19.7 |
% |
|||||||||||||||
Depreciation and amortization expense for the three months ended September 30, 2026 increased $1.5 million, or 19.7%, to $9.1 million from $7.6 million in 2025 primarily due to (i) an increase in depreciation expense of $0.8 million due to an increase in capital expenditures and (ii) an increase in amortization expense of $0.7 million.
Interest Income
|
in thousands, except performance metric |
|||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of revenue |
$ |
% of revenue |
$ |
% |
||||||||||||||||||||||||
|
Interest income |
$ |
6,313 |
0.193 |
% |
$ |
5,571 |
0.151 |
% |
$ |
742 |
13.3 |
% |
|||||||||||||||||
|
Performance Metric |
|||||||||||||||||||||||||||||
|
Number of secured loans at period-end |
372 |
424 |
(52 |
) |
(12.3 |
%) |
|||||||||||||||||||||||
Interest income for the three months ended September 30, 2026 increased $0.7 million, or 13.3%, to $6.3 million from $5.6 million in 2025. The increase in interest income was primarily due to an increase in interest income earned by our DTC segment of $0.7 million.
Interest Expense
|
in thousands |
|||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of revenue |
$ |
% of revenue |
$ |
% |
||||||||||||||||||||||||
|
Interest expense |
$ |
(12,475 |
) |
(0.382 |
%) |
$ |
(12,600 |
) |
(0.342 |
%) |
$ |
(125 |
) |
(1.0 |
%) |
||||||||||||||
Interest expense for the three months ended September 30, 2026 decreased $0.1 million, or 1.0%, to $12.5 million from $12.6 million in 2025. The decrease in interest expense was primarily due to: (i) a decrease of $5.8 million associated with our Trading Credit Facility due to reduced borrowings and (ii) lower interest and fees of $0.5 million related to product financing arrangements, partially offset by (iii) an increase of $6.2 million related to precious metals leases driven by higher overall borrowings.
Earnings (Losses) from Equity Method Investments
|
in thousands |
|||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of revenue |
$ |
% of revenue |
$ |
% |
||||||||||||||||||||||||
|
Earnings (losses) from equity method investments |
$ |
482 |
0.015 |
% |
$ |
(908 |
) |
(0.025 |
%) |
$ |
1,390 |
153.1 |
% |
||||||||||||||||
Earnings (losses) from equity method investments for the three months ended September 30, 2026 increased $1.4 million, or 153.1%, to earnings of $0.5 million from a loss of $0.9 million in 2025 due to increased earnings of our equity method investees.
Other Income and Expense, Net
|
in thousands |
|||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of revenue |
$ |
% of revenue |
$ |
% |
||||||||||||||||||||||||
|
Other (expense) income, net |
$ |
(688 |
) |
(0.021 |
%) |
$ |
2,233 |
0.061 |
% |
$ |
(2,921 |
) |
(130.8 |
%) |
|||||||||||||||
Other income and expense, net for the three months ended September 30, 2026 decreased $2.9 million, or 130.8%, to expense of $0.7 million from income of $2.2 million in 2025. The change in other income and expense, net was primarily due to increased expense related to changes in our contingent consideration fair value adjustments of $4.3 million partially offset by a $0.7 million unrealized gain on our holdings of XAU₮ stablecoin.
Income Tax Benefit (Expense)
|
in thousands |
|||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of revenue |
$ |
% of revenue |
$ |
% |
||||||||||||||||||||||||
|
Income tax benefit (expense) |
$ |
17 |
0.001 |
% |
$ |
(660 |
) |
(0.018 |
%) |
$ |
677 |
102.6 |
% |
||||||||||||||||
We recorded an income tax benefit of $17,000 and an income tax expense of $0.7 million for the three months ended September 30, 2026 and 2025, respectively. Our effective tax rate was approximately -0.8% and -212.2% for the three months ended September 30, 2026 and 2025, respectively. Our effective tax rate varied from the tax computed at the U.S. federal statutory income tax rate for the three months ended September 30, 2026 primarily due to the excess tax benefit from share-based compensation, partially offset by Section 162(m) executive compensation disallowance and foreign tax effects. Our effective tax rate varied from the federal statutory rate for the three months ended September 30, 2025 primarily due to state taxes (net of federal benefit), non-taxable and non-deductible items, and foreign tax effects.
SEGMENT RESULTS OF OPERATIONS
The Company conducts its operations in four reportable segments: (i) Wholesale Sales & Ancillary Services, (ii) Direct-to-Consumer, (iii) Minting & Refining, and (iv) Secured Lending.
Results of Operations - Wholesale Sales & Ancillary Services Segment
The Company operates its Wholesale Sales & Ancillary Services segment directly under the "A-Mark" brand and through its consolidated subsidiaries Transcontinental Depository Services ("TDS"), A-M Global Logistics, LLC ("AMGL"), AM/LPM Ventures, LLC, which owns a majority interest in LPM Group Limited ("LPM"), Spectrum Group International, LLC, which was formed in February 2025 to acquire all of the stock of Spectrum Group International, Inc. ("SGI"), Pinehurst Coin Exchange, Inc. ("Pinehurst"), and AM Precious Metals Singapore PTE, Ltd. The Wholesale Sales & Ancillary Services segment includes the consolidating eliminations of inter-segment transactions and unallocated segment adjustments.
Overview of Results of Operations for the Three Months Ended September 30, 2026 and 2025
- Wholesale Sales & Ancillary Services Segment
The operating results of our Wholesale Sales & Ancillary Services segment were as follows (in thousands, except performance metrics data):
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of revenue |
$ |
% of revenue |
$ |
% |
||||||||||||||||||||||||
|
Revenues |
$ |
2,306,175 |
(a) |
100.000 |
% |
$ |
2,816,871 |
(a) |
100.000 |
% |
$ |
(510,696 |
) |
(18.1 |
%) |
||||||||||||||
|
Gross profit |
26,520 |
1.150 |
% |
21,242 |
0.754 |
% |
$ |
5,278 |
24.8 |
% |
|||||||||||||||||||
|
Selling, general, and administrative expenses |
(23,437 |
) |
(1.016 |
%) |
(22,059 |
) |
(0.783 |
%) |
$ |
1,378 |
6.2 |
% |
|||||||||||||||||
|
Depreciation and amortization expense |
(1,376 |
) |
(0.060 |
%) |
(1,626 |
) |
(0.058 |
%) |
$ |
(250 |
) |
(15.4 |
%) |
||||||||||||||||
|
Interest income |
2,557 |
0.111 |
% |
3,006 |
0.107 |
% |
$ |
(449 |
) |
(14.9 |
%) |
||||||||||||||||||
|
Interest expense |
(7,276 |
) |
(0.316 |
%) |
(10,808 |
) |
(0.384 |
%) |
$ |
(3,532 |
) |
(32.7 |
%) |
||||||||||||||||
|
Earnings (losses) from equity method investments |
445 |
0.019 |
% |
(944 |
) |
(0.034 |
%) |
$ |
1,389 |
147.1 |
% |
||||||||||||||||||
|
Other expense, net |
(688 |
) |
(0.030 |
%) |
(67 |
) |
(0.002 |
%) |
$ |
621 |
926.9 |
% |
|||||||||||||||||
|
Gains (losses) on foreign exchange |
(55 |
) |
(0.002 |
%) |
341 |
0.012 |
% |
$ |
(396 |
) |
(116.1 |
%) |
|||||||||||||||||
|
Net loss before provision for income taxes |
$ |
(3,310 |
) |
(0.144 |
%) |
$ |
(10,915 |
) |
(0.387 |
%) |
$ |
(7,605 |
) |
(69.7 |
%) |
||||||||||||||
|
Performance Metrics: |
|||||||||||||||||||||||||||||
|
Gold ounces sold |
321,000 |
255,000 |
66,000 |
25.9 |
% |
||||||||||||||||||||||||
|
Silver ounces sold |
9,951,000 |
6,779,000 |
3,172,000 |
46.8 |
% |
||||||||||||||||||||||||
|
Wholesale Sales ticket volume |
24,759 |
32,702 |
(7,943 |
) |
(24.3 |
%) |
|||||||||||||||||||||||
(a)
Revenues are presented net of inter-segment transactions; see Note 19 for further information.
Revenues - Wholesale Sales & Ancillary Services
|
in thousands, except performance metrics |
|||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of revenue |
$ |
% of revenue |
$ |
% |
||||||||||||||||||||||||
|
Revenues |
$ |
2,306,175 |
(a) |
100.000 |
% |
$ |
2,816,871 |
(a) |
100.000 |
% |
$ |
(510,696 |
) |
(18.1 |
%) |
||||||||||||||
|
Performance Metrics |
|||||||||||||||||||||||||||||
|
Gold ounces sold |
321,000 |
255,000 |
66,000 |
25.9 |
% |
||||||||||||||||||||||||
|
Silver ounces sold |
9,951,000 |
6,779,000 |
3,172,000 |
46.8 |
% |
||||||||||||||||||||||||
|
Wholesale Sales ticket volume |
24,759 |
32,702 |
(7,943 |
) |
(24.3 |
%) |
|||||||||||||||||||||||
(a)
Revenues are presented net of inter-segment transactions; see Note 19 for further information.
Revenues for the three months ended September 30, 2026 decreased $510.7 million, or 18.1%, to $2.306 billion from $2.817 billion in 2025. Excluding a decrease in forward sales of $1.368 billion, our revenues increased $857.7 million, which was due to higher average selling prices of gold and silver and an increase in gold and silver ounces sold.
Gold ounces sold for the three months ended September 30, 2026 increased 66,000 ounces, or 25.9%, to 321,000 ounces from 255,000 ounces in 2025. Silver ounces sold for the three months ended September 30, 2026 increased 3,172,000 ounces, or 46.8%, to 9,951,000 ounces from 6,779,000 ounces in 2025. On average, selling prices for gold increased by 23.1% and selling prices for silver increased by 54.4% during the three months ended September 30, 2026 as compared to the prior year.
The Wholesale Sales ticket volume for the three months ended September 30, 2026 decreased by 7,943 tickets, or 24.3% to 24,759 tickets from 32,702 tickets in 2025.
Gross Profit - Wholesale Sales & Ancillary Services
|
in thousands |
|||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of revenue |
$ |
% of revenue |
$ |
% |
||||||||||||||||||||||||
|
Gross profit |
$ |
26,520 |
1.150 |
% |
$ |
21,242 |
0.754 |
% |
$ |
5,278 |
24.8 |
% |
|||||||||||||||||
Gross profit for the three months ended September 30, 2026 increased $5.3 million, or 24.8%, to $26.5 million from $21.2 million in 2025. The gross profit increase was primarily due to higher premium spreads, partially offset by lower trading profits.
This segment's profit margin percentage increased by 39.6 basis points to 1.150% from 0.754% in 2025. The increase in gross margin percentage was mainly attributable to the impact of decreased forward sales, partially offset by lower trading profits.
Excluding forward sales that had a negligible impact on the amount of gross profit, this segment's gross margin percentage for the three months ended September 30, 2026 decreased by 68.7 basis points to 1.422% from 2.109% in the prior year. Forward sales increase revenues but are associated with negligible gross profit. The Company enters into forward contracts to hedge its precious metals price risk exposure and not for speculative purposes.
Selling, General and Administrative Expenses - Wholesale Sales & Ancillary Services
|
in thousands |
|||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of revenue |
$ |
% of revenue |
$ |
% |
||||||||||||||||||||||||
|
Selling, general, and administrative expenses |
$ |
(23,437 |
) |
(1.016 |
%) |
$ |
(22,059 |
) |
(0.783 |
%) |
$ |
1,378 |
6.2 |
% |
|||||||||||||||
Selling, general, and administrative expenses for the three months ended September 30, 2026 increased $1.4 million, or 6.2%, to $23.4 million from $22.1 million in 2025. The change was primarily due to: (i) an increase in compensation expense of $0.7 million and (ii) higher advertising costs of $0.5 million.
Depreciation and Amortization Expense - Wholesale Sales & Ancillary Services
|
in thousands |
|||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of revenue |
$ |
% of revenue |
$ |
% |
||||||||||||||||||||||||
|
Depreciation and amortization expense |
$ |
(1,376 |
) |
(0.060 |
%) |
$ |
(1,626 |
) |
(0.058 |
%) |
$ |
(250 |
) |
(15.4 |
%) |
||||||||||||||
Depreciation and amortization expense for the three months ended September 30, 2026 decreased $0.3 million, or 15.4%, to $1.4 million from $1.6 million in 2025. The change in depreciation and amortization expense was not significant.
Interest Income - Wholesale Sales & Ancillary Services
|
in thousands |
|||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of revenue |
$ |
% of revenue |
$ |
% |
||||||||||||||||||||||||
|
Interest income |
$ |
2,557 |
0.111 |
% |
$ |
3,006 |
0.107 |
% |
$ |
(449 |
) |
(14.9 |
%) |
||||||||||||||||
Interest income for the three months ended September 30, 2026 decreased $0.4 million, or 14.9%, to $2.6 million from $3.0 million in 2025. The overall decrease was primarily due to: (i) a $0.7 million decrease in interest income earned from margin orders partially offset by (ii) a $0.2 million increase in interest earned from repurchase arrangements with customers.
Interest Expense - Wholesale Sales & Ancillary Services
|
in thousands |
|||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of revenue |
$ |
% of revenue |
$ |
% |
||||||||||||||||||||||||
|
Interest expense |
$ |
(7,276 |
) |
(0.316 |
%) |
$ |
(10,808 |
) |
(0.384 |
%) |
$ |
(3,532 |
) |
(32.7 |
%) |
||||||||||||||
Interest expense for the three months ended September 30, 2026 decreased $3.5 million, or 32.7%, to $7.3 million from $10.8 million in 2025. The overall decrease was primarily due to: (i) a decrease of $5.4 million in connection with our Trading Credit Facility due to reduced borrowings and (ii) lower interest and fees of $3.4 million related to product financing arrangements due to lower borrowings, partially offset by (iii) an increase of $5.4 million from precious metals leases driven by higher overall borrowings.
Earnings (Losses) from Equity Method Investments- Wholesale Sales & Ancillary Services
|
in thousands |
|||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of revenue |
$ |
% of revenue |
$ |
% |
||||||||||||||||||||||||
|
Earnings (losses) from equity method investments |
$ |
445 |
0.019 |
% |
$ |
(944 |
) |
(0.034 |
%) |
$ |
1,389 |
147.1 |
% |
||||||||||||||||
Earnings (losses) from equity method investments for the three months ended September 30, 2026 increased $1.4 million, or 147.1%, to earnings of $0.4 million from a loss of $0.9 million in 2025 due to increased earnings of our equity method investees.
Results of Operations - Direct-to-Consumer Segment
The Company operates its Direct-to-Consumer segment through its subsidiaries JM Bullion, Inc. ("JMB"), Goldline, Inc. ("Goldline"), Precious Metals Purchasing Partners, LLC ("PMPP"), AM/LPM Ventures, LLC, which owns a majority interest in LPM Group Limited ("LPM"), Spectrum Group International, LLC ("SGI"), Pinehurst Coin Exchange, Inc. ("Pinehurst"), AMS Holding, LLC ("AMS"), AM LPM Singapore PTE Ltd., Monex Deposit Company ("Monex"), and through its investment in Silver Gold Bull, Inc. ("SGB").
Overview of Results of Operations for the Three Months Ended September 30, 2026 and 2025
- Direct-to-Consumer Segment
The operating results of our Direct-to-Consumer ("DTC") segment were as follows (in thousands, except performance metrics data):
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of revenue |
$ |
% of revenue |
$ |
% |
||||||||||||||||||||||||
|
Revenues |
$ |
950,097 |
(a) |
100.000 |
% |
$ |
863,895 |
(a) |
100.000 |
% |
$ |
86,202 |
10.0 |
% |
|||||||||||||||
|
Gross profit |
62,524 |
6.581 |
% |
51,655 |
5.979 |
% |
$ |
10,869 |
21.0 |
% |
|||||||||||||||||||
|
Selling, general, and administrative expenses |
(45,231 |
) |
(4.761 |
%) |
(37,465 |
) |
(4.337 |
%) |
$ |
7,766 |
20.7 |
% |
|||||||||||||||||
|
Depreciation and amortization expense |
(6,871 |
) |
(0.723 |
%) |
(5,957 |
) |
(0.690 |
%) |
$ |
914 |
15.3 |
% |
|||||||||||||||||
|
Interest income |
733 |
0.077 |
% |
21 |
0.002 |
% |
$ |
712 |
3,390.5 |
% |
|||||||||||||||||||
|
Interest expense |
(3,473 |
) |
(0.366 |
%) |
(422 |
) |
(0.049 |
%) |
$ |
3,051 |
723.0 |
% |
|||||||||||||||||
|
Other income, net |
- |
- |
% |
2,300 |
0.266 |
% |
$ |
(2,300 |
) |
(100.0 |
%) |
||||||||||||||||||
|
Losses on foreign exchange |
(774 |
) |
(0.081 |
%) |
(440 |
) |
(0.051 |
%) |
$ |
334 |
75.9 |
% |
|||||||||||||||||
|
Net income before provision for income taxes |
$ |
6,908 |
0.727 |
% |
$ |
9,692 |
1.122 |
% |
$ |
(2,784 |
) |
(28.7 |
%) |
||||||||||||||||
|
Performance Metrics: |
|||||||||||||||||||||||||||||
|
Gold ounces sold |
142,000 |
184,000 |
(42,000 |
) |
(22.8 |
%) |
|||||||||||||||||||||||
|
Silver ounces sold |
4,027,000 |
3,612,000 |
415,000 |
11.5 |
% |
||||||||||||||||||||||||
|
Number of new customers |
96,100 |
69,400 |
26,700 |
38.5 |
% |
||||||||||||||||||||||||
|
Number of active customers |
148,600 |
147,300 |
1,300 |
0.9 |
% |
||||||||||||||||||||||||
|
Number of total customers |
4,818,400 |
4,265,400 |
553,000 |
13.0 |
% |
||||||||||||||||||||||||
|
DTC ticket volume from new customers |
58,792 |
51,950 |
6,842 |
13.2 |
% |
||||||||||||||||||||||||
|
DTC ticket volume from pre-existing customers |
214,780 |
173,413 |
41,367 |
23.9 |
% |
||||||||||||||||||||||||
|
DTC total ticket volume |
273,572 |
225,363 |
48,209 |
21.4 |
% |
||||||||||||||||||||||||
|
DTC average order value |
$ |
3,482 |
$ |
3,863 |
$ |
(381 |
) |
(9.9 |
%) |
||||||||||||||||||||
|
JMB average order value |
$ |
2,943 |
$ |
2,544 |
$ |
399 |
15.7 |
% |
|||||||||||||||||||||
(a)
Includes inter-segment sales; see Note 19 for further information.
Revenues - Direct-to-Consumer
|
in thousands, except performance metrics |
|||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of revenue |
$ |
% of revenue |
$ |
% |
||||||||||||||||||||||||
|
Revenues |
$ |
950,097 |
100.000 |
% |
$ |
863,895 |
100.000 |
% |
$ |
86,202 |
10.0 |
% |
|||||||||||||||||
|
Performance Metrics: |
|||||||||||||||||||||||||||||
|
Gold ounces sold |
142,000 |
184,000 |
(42,000 |
) |
(22.8 |
%) |
|||||||||||||||||||||||
|
Silver ounces sold |
4,027,000 |
3,612,000 |
415,000 |
11.5 |
% |
||||||||||||||||||||||||
|
Number of new customers |
96,100 |
69,400 |
26,700 |
38.5 |
% |
||||||||||||||||||||||||
|
Number of active customers |
148,600 |
147,300 |
1,300 |
0.9 |
% |
||||||||||||||||||||||||
|
Number of total customers |
4,818,400 |
4,265,400 |
553,000 |
13.0 |
% |
||||||||||||||||||||||||
|
DTC ticket volume from new customers |
58,792 |
51,950 |
6,842 |
13.2 |
% |
||||||||||||||||||||||||
|
DTC ticket volume from pre-existing customers |
214,780 |
173,413 |
41,367 |
23.9 |
% |
||||||||||||||||||||||||
|
DTC total ticket volume |
273,572 |
225,363 |
48,209 |
21.4 |
% |
||||||||||||||||||||||||
|
DTC average order value |
$ |
3,482 |
$ |
3,863 |
$ |
(381 |
) |
(9.9 |
%) |
||||||||||||||||||||
|
JMB average order value |
$ |
2,943 |
$ |
2,544 |
$ |
399 |
15.7 |
% |
|||||||||||||||||||||
Revenues for the three months ended September 30, 2026 increased $86.2 million, or 10.0%, to $950.1 million from $863.9 million in 2025. The increase in revenue was due to an increase in silver ounces sold and higher average selling prices of gold and silver, partially offset by a decrease in gold ounces sold. Revenues also increased due to the acquisition of Monex in January 2026, whose results were not included in the same year-ago period.
Gold ounces sold for the three months ended September 30, 2026 decreased 42,000 ounces, or 22.8%, to 142,000 ounces from 184,000 ounces in 2025. Silver ounces sold for the three months ended September 30, 2026 increased 415,000 ounces, or 11.5%, to 4,027,000 ounces from 3,612,000 ounces in 2025.
On average, selling prices for gold increased by 26.6% and selling prices for silver increased by 53.1% during the three months ended September 30, 2026 as compared to the prior year.
The number of new customers for the three months ended September 30, 2026 increased 26,700, or 38.5%, to 96,100 from 69,400 in 2025. The number of active customers for the three months ended September 30, 2026 increased 1,300, or 0.9%, to 148,600 from 147,300 in 2025. The number of total customers as of September 30, 2026 increased 553,000, or 13.0%, to 4,818,400 from 4,265,400 as of September 30, 2025. These changes in customer-based metrics were primarily due to the acquisition of Monex in January 2026, as well as JMB's activity.
As of September 30, 2026, the number of total CyberMetals customers was 43,300, and CyberMetals customer assets under management were $17.0 million.
For the three months ended September 30, 2026, the Direct-to-Consumer ticket volume related to new customers increased by 6,842 tickets, or 13.2%, to 58,792 tickets from 51,950 tickets in 2025. For the three months ended September 30, 2026, Direct-to-Consumer ticket volume related to pre-existing customers increased by 41,367 tickets, or 23.9%, to 214,780 tickets from 173,413 tickets in 2025. For the three months ended September 30, 2026, the Direct-to-Consumer total ticket volume increased by 48,209 tickets, or 21.4%, to 273,572 tickets from 225,363 tickets in 2025. These changes in ticket volumes were primarily due to increases from SGI and SGB, partially offset by decreases in JMB and AMS.
For the three months ended September 30, 2026, the Direct-to-Consumer average order value decreased by $381, or 9.9%, to $3,482 from $3,863 in 2025.
Gross Profit - Direct-to-Consumer
|
in thousands |
|||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of revenue |
$ |
% of revenue |
$ |
% |
||||||||||||||||||||||||
|
Gross profit |
$ |
62,524 |
6.581 |
% |
$ |
51,655 |
5.979 |
% |
$ |
10,869 |
21.0 |
% |
|||||||||||||||||
Gross profit for the three months ended September 30, 2026 increased by $10.9 million, or 21.0%, to $62.5 million from $51.7 million in 2025. The increase in gross profit was primarily driven by AMS, JMB, SGB, and Monex. The results from Monex were not included in the same year-ago period.
For the three months ended September 30, 2026, the Direct-to-Consumer segment's profit margin percentage increased by 60.2 basis points to 6.581% from 5.979% in 2025. The increase in the gross profit margin percentage was primarily due to higher gross profit margins from SGB and Monex.
Selling, General and Administrative Expense - Direct-to-Consumer
|
in thousands |
|||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of revenue |
$ |
% of revenue |
$ |
% |
||||||||||||||||||||||||
|
Selling, general, and administrative expenses |
$ |
(45,231 |
) |
(4.761 |
%) |
$ |
(37,465 |
) |
(4.337 |
%) |
$ |
7,766 |
20.7 |
% |
|||||||||||||||
Selling, general, and administrative expenses for the three months ended September 30, 2026 increased $7.8 million, or 20.7%, to $45.2 million from $37.5 million in 2025. The change was primarily due to: (i) an increase in compensation expense of $4.8 million, (ii) an increase in advertising costs of $1.8 million, and (iii) an increase in insurance costs of $0.5 million. Selling, general and administrative expenses for the three months ended September 30, 2026 included $3.3 million of expenses incurred by Monex whose results were not included in the same year-ago period. Excluding the increase from newly acquired subsidiaries, our selling, general and administrative expenses increased $4.5 million from the prior year period.
Depreciation and Amortization Expense - Direct-to-Consumer
|
in thousands |
|||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of revenue |
$ |
% of revenue |
$ |
% |
||||||||||||||||||||||||
|
Depreciation and amortization expense |
$ |
(6,871 |
) |
(0.723 |
%) |
$ |
(5,957 |
) |
(0.690 |
%) |
$ |
914 |
15.3 |
% |
|||||||||||||||
Depreciation and amortization expense for the three months ended September 30, 2026, increased $0.9 million, or 15.3%, to $6.9 million from $6.0 million in 2025 primarily due to an increase in amortization expense of $0.6 million.
Interest expense - Direct-to-Consumer
|
in thousands |
|||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of revenue |
$ |
% of revenue |
$ |
% |
||||||||||||||||||||||||
|
Interest expense |
$ |
(3,473 |
) |
(0.366 |
%) |
$ |
(422 |
) |
(0.049 |
%) |
$ |
3,051 |
723.0 |
% |
|||||||||||||||
Interest expense for the three months ended September 30, 2026 increased $3.1 million to $3.5 million from $0.4 million in 2025. The increase was primarily related to higher interest and fees related to product financing arrangements.
Other Income, Net- Direct-to-Consumer
|
in thousands |
|||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of revenue |
$ |
% of revenue |
$ |
% |
||||||||||||||||||||||||
|
Other income, net |
$ |
- |
- |
% |
$ |
2,300 |
0.266 |
% |
$ |
(2,300 |
) |
(100.0 |
%) |
||||||||||||||||
Other income, net for the three months ended September 30, 2026 decreased $2.3 million to $0.0 million from $2.3 million in 2025. The decrease was primarily due to contingent consideration fair value adjustments related to our acquisitions of Monex and AMS.
Results of Operations - Minting & Refining Segment
The Company operates its Minting & Refining segment through its consolidated subsidiaries AM&ST Associates, LLC ("AMST" or the "Silver Towne Mint") and Sunshine Minting, Inc. ("SMI"). In fiscal year 2027, the Company began separately presenting its Minting & Refining segment; in fiscal year 2026 and prior, the Company's Minting & Refining operations were included within its Wholesale Sales & Ancillary Services segment and not presented separately below.
Overview of Results of Operations for the Three Months Ended September 30, 2026
- Minting & Refining Segment
The operating results of our Minting & Refining segment were as follows (in thousands, except performance metrics data):
|
Three Months Ended September 30, |
2026 |
|||||||||
|
$ |
% of revenue |
|||||||||
|
Revenues |
$ |
8,997 |
100.000 |
% |
||||||
|
Gross profit |
573 |
6.369 |
% |
|||||||
|
Selling, general, and administrative expenses |
(2,292 |
) |
(25.475 |
%) |
||||||
|
Depreciation and amortization expense |
(827 |
) |
(9.192 |
%) |
||||||
|
Interest income |
38 |
0.422 |
% |
|||||||
|
Interest expense |
(100 |
) |
(1.111 |
%) |
||||||
|
Net loss before provision for income taxes |
$ |
(2,608 |
) |
(28.987 |
%) |
|||||
|
Performance Metrics: |
||||||||||
|
Gold ounces minted |
25,988 |
|||||||||
|
Silver ounces minted |
9,063,329 |
|||||||||
|
Gold ounces refined |
2,441 |
|||||||||
|
Silver ounces refined |
117,500 |
|||||||||
|
Refining capacity utilization |
65 |
% |
||||||||
Results of Operations - Secured Lending Segment
The Company operates its Secured Lending segment through its wholly-owned subsidiaries, Collateral Finance Corporation, LLC ("CFC") and CFC Alternative Investments ("CAI").
Overview of Results of Operations for the Three Months Ended September 30, 2026 and 2025
- Secured Lending Segment
The operating results of our Secured Lending segment were as follows (in thousands, except performance metrics data):
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of interest |
$ |
% of interest |
$ |
% |
||||||||||||||||||||||||
|
Interest income |
$ |
2,985 |
100.000 |
% |
$ |
2,544 |
100.000 |
% |
$ |
441 |
17.3 |
% |
|||||||||||||||||
|
Interest expense |
(1,626 |
) |
(54.472 |
%) |
(1,370 |
) |
(53.852 |
%) |
$ |
256 |
18.7 |
% |
|||||||||||||||||
|
Selling, general, and administrative expenses |
(218 |
) |
(7.303 |
%) |
(298 |
) |
(11.714 |
%) |
$ |
(80 |
) |
(26.8 |
%) |
||||||||||||||||
|
Earnings from equity method investments |
37 |
1.240 |
% |
36 |
1.415 |
% |
$ |
1 |
2.8 |
% |
|||||||||||||||||||
|
Net income before provision for income taxes |
$ |
1,178 |
39.464 |
% |
$ |
912 |
35.849 |
% |
$ |
266 |
29.2 |
% |
|||||||||||||||||
|
Performance Metric: |
|||||||||||||||||||||||||||||
|
Number of secured loans at period end |
372 |
424 |
(52 |
) |
(12.3 |
%) |
|||||||||||||||||||||||
Interest Income - Secured Lending
|
in thousands, except performance metric |
|||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of interest |
$ |
% of interest |
$ |
% |
||||||||||||||||||||||||
|
Interest income |
$ |
2,985 |
100.000 |
% |
$ |
2,544 |
100.000 |
% |
$ |
441 |
17.3 |
% |
|||||||||||||||||
|
Performance Metric |
|||||||||||||||||||||||||||||
|
Number of secured loans at period-end |
372 |
424 |
(52 |
) |
(12.3 |
%) |
|||||||||||||||||||||||
Interest income for the three months ended September 30, 2026 increased $0.4 million, or 17.3%, to $3.0 million from $2.5 million in 2025. The increase in interest income earned from the segment's secured loan portfolio was primarily due to higher average monthly loan balances, partially offset by fewer loans outstanding. The number of secured loans outstanding decreased by 52, or 12.3% to 372 from 424 as of September 30, 2025.
Interest Expense - Secured Lending
|
in thousands |
|||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||||||||||||||
|
$ |
% of interest |
$ |
% of interest |
$ |
% |
||||||||||||||||||||||||
|
Interest expense |
$ |
(1,626 |
) |
(54.472 |
%) |
$ |
(1,370 |
) |
(53.852 |
%) |
$ |
256 |
18.7 |
% |
|||||||||||||||
Interest expense for the three months ended September 30, 2026 increased $0.3 million, or 18.7%, to $1.6 million from $1.4 million in 2025. The change in interest expense was not significant.
NON-GAAP MEASURES
Adjusted net income before provision for income taxes
Overview
In addition to our results determined in accordance with U.S. GAAP, we believe the non-GAAP measure of "adjusted net income before provision for income taxes" is useful in evaluating our operating performance. We use this financial measure to present our pre-tax earnings from core business operations. This measure does not have standardized definitions and is not prepared in accordance with U.S. GAAP. The items excluded from this financial measure may have a material impact on our financial results. Certain of those items are non-recurring, while others are non-cash in nature. Accordingly, this non-GAAP financial performance measure should be considered in addition to, and not as a substitute for or superior to, the comparable measures prepared in accordance with U.S. GAAP.
Reconciliation
We calculate this non-GAAP financial performance measure by eliminating from net income or loss before provision for income taxes the impact of items we do not consider indicative of our core operating performance. We eliminate the impact of the following items: (i) remeasurement gains or losses related to pre-existing equity interests, (ii) contingent consideration fair value adjustments, (iii) acquisition costs, (iv) amortization expenses related to intangible assets acquired, and (v) depreciation expense.
See below for the reconciliation of this non-GAAP financial performance measure to its most closely comparable U.S. GAAP measure on our financial statements (in thousands):
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||
|
$ |
$ |
$ |
% |
||||||||||||||
|
Net income (loss) before provision for income taxes |
$ |
2,168 |
$ |
(311 |
) |
$ |
2,479 |
797.1 |
% |
||||||||
|
Adjustments: |
|||||||||||||||||
|
Contingent consideration fair value adjustment |
1,803 |
(2,461 |
) |
$ |
4,264 |
173.3 |
% |
||||||||||
|
Acquisition costs |
197 |
61 |
$ |
136 |
223.0 |
% |
|||||||||||
|
Amortization of acquired intangibles |
5,874 |
5,202 |
$ |
672 |
12.9 |
% |
|||||||||||
|
Depreciation expense |
3,200 |
2,381 |
$ |
819 |
34.4 |
% |
|||||||||||
|
Adjusted net income before provision for income taxes (non-GAAP) |
$ |
13,242 |
$ |
4,872 |
$ |
8,370 |
171.8 |
% |
|||||||||
Adjustments
Remeasurement gains or losses. When we acquired a controlling interest in SGB in June 2024, the remaining outstanding equity interests of Pinehurst in February 2025, AMS in April 2025, and SMI in April 2026, we had previously owned a noncontrolling equity interest. We are required to estimate the fair value of our pre-existing equity investment as well as any options to acquire additional equity interests and record the change in the value as a remeasurement gain or loss in our condensed consolidated statements of income. We exclude these remeasurement gains and losses when we evaluate our on-going operational performance and to facilitate comparison of period-to-period operational performance. There were no remeasurement gains or losses in the periods presented above.
Contingent consideration fair value adjustments. Upon our acquisitions of LPM, Pinehurst, AMS, and Monex, we recognized contingent consideration liabilities representing the amount we expect to pay in connection with the achievement of certain financial and performance targets. We remeasure these liabilities each reporting period, with the resulting changes recorded as other income and expense in the Company's condensed consolidated statements of income. We exclude these fair value adjustments when we evaluate our core operating performance and to facilitate comparison of period-to-period operating performance. See Note 3 to the Company's condensed consolidated financial statements for additional information.
Acquisition costs. We incur expenses for professional services rendered in connection with business combinations, which are included as a component of selling, general, and administrative expenses in the Company's condensed consolidated statements of income. Acquisition expenses are recorded in the periods in which the costs are incurred, and the services are received. We exclude acquisition expenses when we evaluate our core operating performance and to facilitate comparison of period-to-period operating performance.
Amortization of acquired intangibles and depreciation expense. Amortization expense of acquired intangibles varies in amount and frequency and is significantly impacted by the timing and size of our acquisitions. Depreciation expense is calculated using a straight-line method based on the estimated useful lives of the related assets, ranging from three years to twenty-five years. Due to these expenses being non-cash in nature, management finds it useful to exclude these charges from our operating expenses to assist in the review of a measure that more closely corresponds to cash operating income generated from our business. Amortization of acquired intangible assets and depreciation expense will recur in future periods. For additional information about the amortization of our acquired intangibles and our depreciation expense, see Note 8 and Note9 to the Company's condensed consolidated financial statements.
Earnings Before Interest, Taxes, Depreciation, and Amortization
Overview
In addition to the non-GAAP financial performance measure discussed in the section above, we use the non-GAAP liquidity measure "earnings before interest, taxes, depreciation, and amortization" or "EBITDA" to evaluate our business operations before investing activities, interest, and income taxes. Management and external users of our consolidated financial statements, such as industry analysts and investors, may use EBITDA to compare business operations with other publicly traded companies. Investors are cautioned, however, that the definition of EBITDA is not uniform, and other public companies may utilize different measures of EBITDA.
Reconciliation
We calculate EBITDA by eliminating from net income or loss the following items: (i) interest income, (ii) interest expense, (iii) amortization expenses related to intangible assets acquired, (iv) depreciation expense, and (v) income tax expense or benefit.
Management believes the most directly comparable GAAP financial measure is "net cash provided by or used in operating activities" presented in the condensed consolidated statement of cash flows. Below is the reconciliation of net income and net cash provided by or used in operating activities to EBITDA (in thousands):
|
Three Months Ended September 30, |
2026 |
2025 |
Change |
||||||||||||||
|
Reconciliation of Net Income (Loss) to EBITDA: |
$ |
$ |
$ |
% |
|||||||||||||
|
Net income (loss) |
$ |
2,185 |
$ |
(971 |
) |
$ |
3,156 |
325.0 |
% |
||||||||
|
Adjustments: |
|||||||||||||||||
|
Interest income |
(6,313 |
) |
(5,571 |
) |
$ |
742 |
13.3 |
% |
|||||||||
|
Interest expense |
12,475 |
12,600 |
$ |
(125 |
) |
(1.0 |
%) |
||||||||||
|
Amortization of acquired intangibles |
5,874 |
5,202 |
$ |
672 |
12.9 |
% |
|||||||||||
|
Depreciation expense |
3,200 |
2,381 |
$ |
819 |
34.4 |
% |
|||||||||||
|
Income tax (benefit) expense |
(17 |
) |
660 |
$ |
(677 |
) |
(102.6 |
%) |
|||||||||
|
15,219 |
15,272 |
$ |
(53 |
) |
(0.3 |
%) |
|||||||||||
|
Earnings before interest, taxes, depreciation, and amortization (non-GAAP) |
$ |
17,404 |
$ |
14,301 |
$ |
3,103 |
21.7 |
% |
|||||||||
|
Reconciliation of Operating Cash Flows to EBITDA: |
|||||||||||||||||
|
Net cash (used in) provided by operating activities |
$ |
(638,584 |
) |
$ |
195,417 |
$ |
(834,001 |
) |
(426.8 |
%) |
|||||||
|
Changes in operating working capital |
651,667 |
(187,683 |
) |
$ |
839,350 |
447.2 |
% |
||||||||||
|
Interest expense |
12,475 |
12,600 |
$ |
(125 |
) |
(1.0 |
%) |
||||||||||
|
Interest income |
(6,313 |
) |
(5,571 |
) |
$ |
742 |
13.3 |
% |
|||||||||
|
Income tax (benefit) expense |
(17 |
) |
660 |
$ |
(677 |
) |
(102.6 |
%) |
|||||||||
|
Earnings (losses) from equity method investments |
482 |
(908 |
) |
$ |
1,390 |
153.1 |
% |
||||||||||
|
Share-based compensation |
(552 |
) |
(375 |
) |
$ |
177 |
47.2 |
% |
|||||||||
|
Amortization of loan cost |
(376 |
) |
(1,635 |
) |
$ |
(1,259 |
) |
(77.0 |
%) |
||||||||
|
Other |
(1,378 |
) |
1,796 |
$ |
(3,174 |
) |
(176.7 |
%) |
|||||||||
|
Earnings before interest, taxes, depreciation, and amortization (non-GAAP) |
$ |
17,404 |
$ |
14,301 |
$ |
3,103 |
21.7 |
% |
|||||||||
|
Cash Flow Data: |
|||||||||||||||||
|
Net cash (used in) provided by operating activities |
$ |
(638,584 |
) |
$ |
195,417 |
$ |
(834,001 |
) |
(426.8 |
%) |
|||||||
|
Net cash used in investing activities |
$ |
(3,817 |
) |
$ |
(11,409 |
) |
$ |
(7,592 |
) |
(66.5 |
%) |
||||||
|
Net cash provided by (used in) financing activities |
$ |
191,244 |
$ |
(172,528 |
) |
$ |
363,772 |
210.8 |
% |
||||||||
LIQUIDITY AND FINANCIAL CONDITION
Primary Sources and Uses of Cash
Overview
Liquidity refers to the availability of cash for the Company to meet all of our cash needs. Our sources of liquidity principally include cash from operations, precious metals leases, Trading Credit Facility (see "Lines of Credit" below), and product financing arrangements. In recent periods, a primary source of our liquidity has been precious metal leases, a majority of which have been provided by Tether, a related party. In the event these leasing arrangements are reduced or terminated, we will be required to utilize alternative financing options, which may impact our interest expense.
A substantial portion of our assets are liquid. As of September 30, 2026, approximately 85% of our assets consisted of cash, receivables, derivative assets, secured loan receivables, precious metals held under financing arrangements, and inventories, measured at fair value. Cash generated from the sales or financing of our precious metals products is our primary source of operating liquidity. Among other things, these include our product financing arrangements, liabilities on borrowed metals, and precious metals leases. Typically, the Company acquires its inventory by: (i) purchasing inventory from its suppliers by utilizing our own capital and lines of credit; (ii) borrowing precious metals from its suppliers under short-term arrangements which may bear interest at a designated rate, and (iii) repurchasing inventory at an agreed-upon price based on the spot price on the specified repurchase date.
In addition to selling inventory, the Company generates cash from earning interest income. The Company enters into secured loans and financing structures with its customers under which it charges interest. The loans are secured by precious metals and graded sports cards owned by the borrowers and held by the Company as security for the term of the loan. The Company also offers a number of secured financing options to its customers to finance their precious metals purchases including consignments and other structured inventory finance products. Furthermore, our customers may enter into agreements whereby the customer agrees to repurchase our precious metals at the prevailing spot price for delivery of the product at a specific point in time in the future; interest income is earned from the contract date until the material is delivered and paid for in full.
We may also raise funds through the public or private offering of equity or debt securities, although there is no assurance that we will be able to do so at the times and in the amounts required.
We continually review our overall credit and capital needs to ensure that our capital base, both stockholders' equity and available credit facilities, can appropriately support our anticipated financing needs. The Company also continually monitors its current and forecasted cash requirements and draws upon and pays down its debt obligations so as to minimize interest expense. See Note 15 to the Company's condensed consolidated financial statements.
Lines of Credit
|
in thousands |
||||||||||||
|
September 30, 2026 |
June 30, 2026 |
Change |
||||||||||
|
Lines of credit |
$ |
- |
$ |
- |
$ |
- |
||||||
Effective December 2021, the Company entered into a borrowing facility (the "Trading Credit Facility") with CIBC Bank USA, as agent and joint lead arranger, and a syndicate of banks. As of September 30, 2026, the Trading Credit Facility provided the Company with access up to $250.0 million and has a maturity date of September 29, 2027. (See Note 15.)
When needed, the Company uses funds drawn under the Trading Credit Facility to purchase metals from its suppliers and for other operating cash flow purposes.
Notes Payable
|
in thousands |
||||||||||||
|
September 30, 2026 |
June 30, 2026 |
Change |
||||||||||
|
Notes payable - short-term |
$ |
- |
$ |
4,000 |
$ |
(4,000 |
) |
|||||
|
Notes payable - long-term |
195 |
206 |
(11 |
) |
||||||||
|
$ |
195 |
$ |
4,206 |
$ |
(4,011 |
) |
||||||
In April 2021, CCP entered into a loan agreement ("CCP Note") with CFC, which provides CFC with up to $4.0 million to fund commercial loans secured by graded sports cards to its borrowers. Effective July 2026, CCP became a consolidated subsidiary of the Company, and the CCP Note has been eliminated upon consolidation.
Liabilities on Borrowed Metals and Precious Metals Leases
|
in thousands |
||||||||||||
|
September 30, 2026 |
June 30, 2026 |
Change |
||||||||||
|
Liabilities on borrowed metals |
$ |
793,783 |
$ |
776,061 |
$ |
17,722 |
||||||
|
Precious metals leases |
$ |
1,117,361 |
$ |
1,687,603 |
$ |
(570,242 |
) |
|||||
We borrow precious metals from our suppliers and customers under short-term arrangements using other precious metal from our inventory or precious metals held under financing arrangements as collateral. Amounts under these arrangements require repayment either in the form of precious metals or cash. Liabilities also arise from metal positions held by customers in our inventory. Typically, these positions are due on demand, in a specified physical form, based on the total ounces of metal held in the position.
We lease precious metals from our suppliers and customers under short-term arrangements, in which the lease terms and interest rates are established at lease inception. Precious metals leases are included in deferred revenue and other advances on the condensed consolidated balance sheet. Amounts under these arrangements may be settled in precious metals or cash.
Product Financing Arrangements
|
in thousands |
||||||||||||
|
September 30, 2026 |
June 30, 2026 |
Change |
||||||||||
|
Product financing arrangements |
$ |
314,900 |
$ |
89,249 |
$ |
225,651 |
||||||
The Company has agreements with financial institutions and other third parties that allow the Company to transfer its gold and silver inventory to the third-party at an agreed-upon price based on the spot price, which provides alternative sources of liquidity. During the term of the agreement both parties intend for inventory to be returned at an agreed-upon price based on the spot price on the repurchase date. The third parties charge monthly interest as a percentage of the market value of the outstanding obligation; such monthly charges are classified as interest expense. These transactions do not qualify as sales and therefore are accounted for as financing arrangements and reflected in the Company's condensed consolidated balance sheets as product financing arrangements. The obligation is stated at the amount required to repurchase the outstanding inventory. Both the product financing arrangements and the underlying inventory (which is entirely restricted) are carried at fair value, with changes in fair value included as a component of cost of sales.
Secured Loans Receivable
|
in thousands |
||||||||||||
|
September 30, 2026 |
June 30, 2026 |
Change |
||||||||||
|
Secured loans receivable |
$ |
107,415 |
$ |
115,128 |
$ |
(7,713 |
) |
|||||
CFC is a California licensed finance lender that makes and acquires commercial loans secured by bullion and numismatic coins, and graded sports cards that affords our customers a convenient means of financing their inventory or collections. See Note 5 to the Company's condensed consolidated financial statements. Most of the Company's secured loans are short-term in nature. The renewal of these secured loans is at the discretion of the Company and, as such, provides us with some flexibility in regard to our capital deployment strategies.
Dividends
The Company's board of directors has adopted a regular quarterly cash dividend policy of $0.20 per common share ($0.80 per share on an annual basis). The declaration of regular cash dividends in the future is subject to the determination each quarter by the board of directors. Below is a summary of dividends paid to stockholders in the three months ended September 30, 2026.
•
On August 31, 2026, the Company's board of directors declared a regular cash dividend and a non-recurring special dividend of $0.20 per share and $1.00 per share, respectively, of common stock to stockholders of record at the close of business on September 16, 2026. The dividends were paid on September 28, 2026 and totaled $35.1 million.
See Note 17 and Note 20 to the Company's condensed consolidated financial statements for more information regarding our dividends.
Cash Flows
The majority of the Company's trading activities involve two-day value trades under which payment is received in advance of delivery or product is received in advance of payment. The combination of sales volume, inventory turnover, and precious metals price volatility can cause material changes in the sources of cash used in or provided by operating activities on a daily basis. The Company manages these variances through its liquidity forecasts and counterparty limits by maintaining a liquidity reserve to meet the Company's cash needs. The Company uses various short-term financial instruments to manage the cycle of our trading activities from customer purchase order to cash collections and product delivery, which can cause material changes in the amount of cash used in or provided by financing activities on a daily basis.
The following summarizes components of our consolidated statements of cash flows (in thousands):
|
Three months Ended |
September 30, 2026 |
September 30, 2025 |
Change |
|||||||||
|
Net cash (used in) provided by operating activities |
$ |
(638,584 |
) |
$ |
195,417 |
$ |
(834,001 |
) |
||||
|
Net cash used in investing activities |
$ |
(3,817 |
) |
$ |
(11,409 |
) |
$ |
(7,592 |
) |
|||
|
Net cash provided by (used in) financing activities |
$ |
191,244 |
$ |
(172,528 |
) |
$ |
363,772 |
|||||
For the periods presented, our principal capital requirements have been to fund (i) working capital and (ii) financing activity. Our working capital requirements fluctuated with market conditions, the availability of precious metals, and the volatility of precious metals commodity pricing.
Net Cash Flows From Operating Activities
Operating activities used $638.6 million and provided $195.4 million in cash for the three months ended September 30, 2026 and 2025, respectively, representing a $834.0 million change compared to the three months ended September 30, 2025. The period over period change was primarily due to net changes in working capital, which includes deferred revenue and other advances, inventories, derivative assets and liabilities, liabilities on borrowed metals, and accounts payable and other payables, as well as an increase in net income adjusted for non-cash items.
Net Cash Flows From Investing Activities
Investing activities used $3.8 million and used $11.4 million in cash for the three months ended September 30, 2026 and 2025, respectively, representing a $7.6 million change compared to the three months ended September 30, 2025. This period over period change was primarily due to (i) higher inflows of $17.3 million associated with the secured loan receivables in the current period, partially offset by (ii) an increase of $4.1 million in purchases of intangible assets, (iii) a $2.5 million increase in capital expenditures for property, plant, and equipment, and (iv) an increase of $1.6 million for purchases of long-term investments.
Net Cash Flows From Financing Activities
Financing activities provided $191.2 million and used $172.5 million in cash for the three months ended September 30, 2026 and 2025, respectively, representing a $363.8 million change compared to the three months ended September 30, 2025. This period over period change was primarily due to: (i) an increase in cash provided of $333.4 million related to our product financing arrangements, (ii) a decrease in cash used from our net borrowings and repayments of $55.0 million under our Trading Credit Facility, (iii) a $1.8 million reduction in cash paid for debt issuance costs, and (iv) a $1.2 million increase in cash provided from the net proceeds of share-based awards. These were partially offset by (v) an increase in dividends paid of $30.1 million due to the declaration and payment of a special dividend during the current period.
Capital Resources
We believe that our current cash availability under the Trading Credit Facility, product financing arrangements, financing derived from borrowed and leased metal arrangements and the cash we anticipate generating from operating activities will provide us with sufficient liquidity to satisfy our working capital needs, capital expenditures, investment requirements, and commitments through at least the next twelve months.
CONTRACTUAL OBLIGATIONS, CONTINGENT LIABILITIES AND COMMITMENTS
Counterparty Risk
We face counterparty risks in our Wholesale Sales & Ancillary Services segment. We manage these risks by setting credit and position risk limits with our trading counterparties, including gross position limits for counterparties engaged in sales and purchase transactions and inventory consignment transactions with us, as well as collateral limits for different types of sale and purchase transactions that counterparties may engage in from time to time.
Commodities Risk and Derivatives
We use a variety of strategies to manage our risk including fluctuations in commodity prices for precious metals. Our inventory consists of, and our trading activities involve, precious metals and precious metal products, for which prices are linked to the corresponding precious metal commodity prices. The Company's precious metals inventory is subject to fluctuations in market value, resulting from changes in the underlying commodity prices. Inventory purchased or borrowed by us is subject to price changes. Inventory borrowed is a natural hedge since changes in the value of the metal held are offset by the obligation to return the metal to the supplier or deliver metals to the customer.
Open sale and purchase commitments in our trading activities are subject to changes in value between the date the purchase or sale price is fixed (the trade date) and the date the metal is received or delivered (the settlement date). We seek to minimize the effect of price changes of the underlying commodity through the use of forward and futures contracts. Our open sale and purchase commitments generally settle within two business days, and for those commitments that do not have stated settlement dates, we have the right to settle the positions upon demand.
Our policy is to substantially hedge our inventory position, net of open sale and purchase commitments that are subject to price risk. We regularly enter into precious metals commodity forward and futures contracts with financial institutions to hedge against this risk. We use futures contracts, which typically settle within 30 days, for our shorter-term hedge positions, and forward contracts, which may remain open for up to six months, for our longer-term hedge positions. We have access to all of the precious metals markets, allowing us to place hedges. We also maintain relationships with major market makers in every major precious metals dealing center.
The Company enters into these derivative transactions solely for the purpose of hedging our inventory holding risk, and not for speculative market purposes. Due to the nature of our hedging strategy, we are not using hedge accounting as defined under ASC 815. Unrealized gains or losses resulting from our forward and futures contracts are reported as cost of sales with the related amounts due from or to counterparties reflected as derivative assets or liabilities. The Company adjusts the derivatives to fair value on a daily basis until the transactions are settled. When these contracts are net settled, the unrealized gains and losses are reversed and the realized gains and losses for forward contracts are recorded in revenue and cost of sales, respectively, and the net realized gains and losses for futures are recorded in cost of sales.
The Company's net gains and losses on derivative instruments totaled losses of $64.4 million and gains of $113.2 million, for the three months ended September 30, 2026 and 2025, respectively. These were substantially offset by the changes in fair market value of the underlying precious metals inventory, which is also recorded in cost of sales in the condensed consolidated statements of income.
The purpose of the Company's hedging policy is to substantially match the change in the value of the derivative financial instrument to the change in the value of the underlying hedged item. The following table summarizes the results of our hedging activities, showing the precious metal commodity inventory position, net of open sale and purchase commitments, which is subject to price risk, compared to change in the value of the derivative instruments (in thousands):
|
September 30, 2026 |
June 30, 2026 |
|||||||
|
Inventories |
$ |
2,436,180 |
$ |
2,360,336 |
||||
|
Less inventories not hedged: |
||||||||
|
Collectible coin inventory, held at lower of cost or net realizable value |
(104,512 |
) |
(91,339 |
) |
||||
|
Minting & Refining inventory, held at lower of cost or net realizable value |
(14,270 |
) |
- |
|||||
|
Premium on metals position |
(12,835 |
) |
(11,245 |
) |
||||
|
Precious metal value not hedged |
(131,617 |
) |
(102,584 |
) |
||||
|
Commitments at market: |
||||||||
|
Open inventory purchase commitments |
1,343,744 |
1,463,181 |
||||||
|
Open inventory sales commitments |
(1,792,397 |
) |
(2,659,026 |
) |
||||
|
Margin sales commitments |
(31,068 |
) |
(30,480 |
) |
||||
|
In-transit inventory no longer subject to market risk |
(12,830 |
) |
(23,934 |
) |
||||
|
Unhedgeable premiums on open commitment positions |
1,733 |
1,885 |
||||||
|
Borrowed precious metals |
(793,783 |
) |
(776,061 |
) |
||||
|
Product financing arrangements |
(314,900 |
) |
(89,249 |
) |
||||
|
Advances on industrial metals |
727 |
1,248 |
||||||
|
(1,598,774 |
) |
(2,112,436 |
) |
|||||
|
Precious metals inventory subject to price risk |
705,789 |
145,316 |
||||||
|
Precious metals subject to derivative financial instruments: |
||||||||
|
Precious metals forward contracts at market values |
73,034 |
(407,606 |
) |
|||||
|
Precious metals futures contracts at market values |
627,242 |
548,051 |
||||||
|
Total market value of derivative financial instruments |
700,276 |
140,445 |
||||||
|
Net precious metals inventory subject to commodity price risk |
$ |
5,513 |
$ |
4,871 |
||||
We are exposed to the risk of default of the counterparties to our derivative contracts. Significant judgment is applied by us when evaluating the fair value implications. We regularly review the creditworthiness of our major counterparties and monitor our exposure to concentrations. As of September 30, 2026, we believe our risk of counterparty default is limited based on our evaluation of the creditworthiness of our major counterparties, the strong financial condition of our counterparties, and the short-term duration of these arrangements.
We had the following outstanding sale and purchase commitments and open forward and futures contracts, which are normal and recurring, in nature (in thousands):
|
September 30, 2026 |
June 30, 2026 |
|||||||
|
Purchase commitments |
$ |
1,343,744 |
$ |
1,463,181 |
||||
|
Sales commitments |
$ |
(1,792,397 |
) |
$ |
(2,659,026 |
) |
||
|
Margin sales commitments |
$ |
(31,068 |
) |
$ |
(30,480 |
) |
||
|
Open forward contracts |
$ |
73,034 |
$ |
(407,606 |
) |
|||
|
Open futures contracts |
$ |
627,242 |
$ |
548,051 |
||||
|
Foreign exchange forward contracts |
$ |
86 |
$ |
212 |
||||
The notional amounts of the commodity forward and futures contracts and the open sales and purchase orders, as shown in the table above, are not reflected at the notional amounts in the condensed consolidated balance sheets. The Company records commodity forward and futures contracts at the fair value, which is the difference between the market price of the underlying metal or contract measured on the reporting date and the trade amount measured on the date the contract was transacted. The fair value of the open derivative contracts is shown as a component of derivative assets or derivative liabilities in the accompanying condensed consolidated balance sheets.
The Company enters into derivative forward and futures transactions solely for the purpose of hedging its inventory holding risk, and not for speculative market purposes. The Company's gains and losses on derivative instruments are substantially offset by the changes in fair market value of the underlying precious metals inventory position, including our open sale and purchase commitments. The Company records the derivatives at the trade date, and any corresponding unrealized gains or losses are shown as a component of cost of sales in the condensed consolidated statements of income. We adjust the carrying value of the derivatives to fair value on a daily basis until the transactions are physically settled. See Note 12 to the Company's condensed consolidated financial statements.
Commitments and Contingencies
Refer to Note 16 to the Company's condensed consolidated financial statements for information related to the Company's commitments and contingencies.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The Company's condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). In connection with the preparation of our financial statements, we are required to make estimates and assumptions about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that we believe to be relevant at the time the Company's condensed consolidated financial statements are prepared. On a regular basis, we review our accounting policies, assumptions, estimates and judgments to ensure that the Company's condensed consolidated financial statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could materially differ from our estimates. See our critical accounting policies and estimates discussed in the Management's Discussion and Analysis of our most recent Annual Report filed on Form 10-K. There have been no material changes to these policies.
RECENT ACCOUNTING PRONOUNCEMENTS
For a description of accounting changes and recent accounting standards, including the expected dates of adoption and estimated effects, if any, on our financial position or results of operations, see Note 2 to the Company's condensed consolidated financial statements.
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