Sprott (SII) Q2 2024 earnings summary

Executive summary

• Assets under management (AUM) reached $31.1 billion as of June 30, 2024, up 6% from March 31, 2024, and 8% from December 31, 2023, and further increased to $31.5 billion as of August 1, 2024, driven by market appreciation and net inflows, including the Sprott Physical Copper Trust IPO.

• Net sales rebounded to $357 million in Q2, plus $110 million from the Sprott Physical Copper Trust IPO, offsetting Q1 redemptions.

• Adjusted base EBITDA for Q2 2024 was $22.4 million ($0.88 per share), up 25% year-over-year, with a 58% margin.

• Net income for Q2 2024 was $13.4 million ($0.53 per share), down 25% year-over-year due to a prior non-recurring gain, but up on an adjusted basis.

• Precious metals and critical materials strategies are well positioned amid market volatility and geopolitical uncertainty.

Financial highlights

• Management fees were $38.1 million in Q2 2024, up 16% year-over-year; net fees were $34.4 million, up 15%.

• Commission revenues increased to $3.3 million in Q2 2024 from $1.6 million in Q2 2023, driven by ATM activity and COP launch.

• Finance income was $4.1 million in Q2 2024, up from $1.7 million in Q2 2023, reflecting higher streaming syndication activity.

• Adjusted base EBITDA for the quarter was $22.4 million, up from $18 million in Q2 2023; year-to-date adjusted base EBITDA was $42.1 million, up 19%.

• Total net revenues for Q2 2024 were $41.6 million, up from $32.0 million in Q2 2023.

Outlook and guidance

• Management expects continued growth in critical materials and precious metals strategies, with a constructive operating environment.

• Inflation remains persistent; U.S. rate cuts are anticipated, with the Fed expected to move in September.

• Fiscal deficits and geopolitical risks are expected to support gold prices.

• Management remains confident in continued AUM growth, positive net sales, and supporting dividend levels while funding future growth.

• Board declared a quarterly dividend of $0.25 per share on August 6, 2024.