Sprott (SII) Q3 2024 earnings summary

Executive summary

• Assets under management (AUM) reached $33.4 billion at September 30, 2024, up 8% from June 30 and 16% from December 31, with a further increase to $34.2 billion as of November 1, marking record highs each quarter in 2024.

• Net income for Q3 2024 was $12.7 million ($0.50 per share), up 87% year-over-year; year-to-date net income was $37.6 million ($1.48 per share), up 17%.

• Strong sales momentum with $589 million in net sales and $617 million in net flows during Q3, driven by gold and silver trusts and ETFs.

• Dividend increased by 20% to $0.30 per share, with the company expecting to be debt-free by end of November.

• Focus on precious metals and critical materials positions the company to benefit from favorable macro trends.

Financial highlights

• Adjusted base EBITDA for Q3 was $20.7 million ($0.81 per share), up 16% year-over-year; year-to-date adjusted base EBITDA was $62.8 million ($2.47 per share), up 18%.

• Q3 2024 total net revenues were $42.1 million, up from $30.8 million in Q3 2023; YTD net revenues were $120.8 million, up from $97.2 million.

• Management fees for Q3 were $38.7 million, up 18% year-over-year; net fees were $38.9 million, up 31% year-over-year.

• Net compensation expense for Q3 was $16.9 million, up 11% year-over-year, with a net compensation ratio of 46% (down from 50%).

• Net income margin for Q3 was 27% (up from 20% in Q3 2023); adjusted base EBITDA margin was 58% (up from 56%).

Outlook and guidance

• Two new precious metals ETFs are in development, expected to launch in Q1 2025.

• Management expects to repay the remaining line of credit by end of November, resulting in a debt-free balance sheet.

• Constructive outlook for precious metals and critical materials, with anticipated benefit from macro trends and increased demand.

• Company expects to benefit from global trends in electrification, onshoring, and increased demand for precious and critical materials.

• Confidence in supporting the increased dividend level without impacting future growth initiatives.