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, 2024, and 16% from December 31, 2023; AUM further increased to $34.2 billion as of November 1, 2024, 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 during Q3, primarily in physical gold and silver funds, and continued inflows to exchange listed products.

• Board declared a Q3 dividend of $0.30 per share, a 20% increase, with plans to repay the line of credit by month-end, resulting in a debt-free balance sheet.

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

Financial highlights

• Adjusted base EBITDA for Q3 2024 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%.

• 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%).

• 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.

• Cash and cash equivalents at quarter-end were $43.5 million, up from $20.7 million at year-end.

Outlook and guidance

• New precious metals ETFs are in development and expected to launch in Q1 2025.

• Expectation to repay the remaining line of credit by month-end, achieving a debt-free balance sheet.

• Management maintains a constructive outlook for precious metals and critical materials, citing strong positioning to navigate volatile markets and benefit from global trends in electrification and onshoring.