Sprott Announces Second Quarter 2025 Results

August 06, 2025 07:00 ET | Source: Sprott Inc. TORONTO, Aug. 06, 2025 (GLOBE NEWSWIRE) -- Sprott Inc. (NYSE/TSX: SII) (“Sprott” or the “Company”) today announced its financial results for the three and six months ended June 30, 2025. Management commentary "Sprott’s Assets Under Management (“AUM”) were $40 billion as at June 30, 2025, up 14% from $35.1 billion as at March 31, 2025 and up 27% from $31.5 billion as at December 31, 2024," said Whitney George, Chief Executive Officer of Sprott. "During the quarter we benefited from market value appreciation across our product suite, driven by rising precious metals and uranium prices and strong performance in our managed equities segment. We also reported $1.2 billion in net sales during the quarter, concentrated largely in our physical trusts." "We are pleased with how our balanced product offerings have performed so far this year, providing clients both safe-haven and growth opportunities. Our AUM is currently at an all-time high and investor allocations to our precious metals and critical materials strategies are steadily increasing with $1.6 billion in net sales during the first half of 2025. Our financial performance has reflected the growth in our asset base as well as our commitment to carefully managing expenses while continuing to invest in growing the business." Key AUM highlights1 AUM was $40 billion as at June 30, 2025, up 14% from $35.1 billion as at March 31, 2025 and up 27% from $31.5 billion as at December 31, 2024. On a three and six months ended basis, we benefited from positive market value appreciation across the majority of our fund products and positive net inflows to our physical trusts. Key revenue highlights Management fees were $44.4 million for the quarter, up 16% from $38.3 million for the quarter ended June 30, 2024 and $84.4 million on a year-to-date basis, up 13% from $74.9 million for the six months ended June 30, 2024. Carried interest and performance fees were $14.8 million in the quarter and on a year-to-date basis, up from $0.7 million for the quarter and six months ended June 30, 2024. Net fees were $53.2 million for the quarter, up 54% from $34.4 million for the quarter ended June 30, 2024 and $88.9 million on a year-to-date basis, up 32% from $67.1 million for the six months ended June 30, 2024. Our revenue performance in the quarter and on a six months ended basis was primarily due to higher average AUM on positive market value appreciation and inflows to our precious metals physical trusts. We also benefited from carried interest crystallization on the wind down of a legacy fixed-term exploration LP and performance fee crystallization in an active mining equities fund, both of which were housed in our managed equities segment.Commission revenues were $1.7 million for the quarter, down 48% from $3.3 million for the quarter ended June 30, 2024 and $2 million on a year-to-date basis, down 54% from $4.4 million for the six months ended June 30, 2024. Net commissions were $0.8 million for the quarter, down 49% from $1.5 million for the quarter ended June 30, 2024 and $1 million on a year-to-date basis, down 53% from $2 million for the six months ended June 30, 2024. Commission revenue decreased in the quarter and on a six months ended basis primarily due to last year's higher commissions earned on the physical copper trust offering and last year's higher ATM activity in our physical uranium trust.Finance income was $1.2 million for the quarter, down 70% from $4.1 million for the quarter ended June 30, 2024 and $2.6 million on a year-to-date basis, down 56% from $5.9 million for the six months ended June 30, 2024. Finance income decreased in the quarter and on a six months ended basis mainly due to last year's syndication activity in the first half of the year in our private strategies segment. Key expense highlights Net compensation expense was $17.8 million for the quarter, up 5% from $16.9 million for the quarter ended June 30, 2024 and $35.3 million on a year-to-date basis, up 7% from $33.1 million for the six months ended June 30, 2024. The increase in the quarter and on a six months ended basis was primarily due to higher incentive compensation on increased net fee generation. Our net compensation ratio was 43% in the quarter (June 30, 2024 - 44%) and 45% on a year-to-date basis (June 30, 2024 - 45%).Stock-based compensation was $18.6 million for the quarter, up $14.3 million from $4.3 million for the quarter ended June 30, 2024 and $24.8 million on a year-to-date basis, up $15.8 million from $9 million for the six months ended June 30, 2024. The increase in the quarter and on a year-to-date basis was primarily due to a change in accounting requirements as we moved our employees to a new cash-settled stock-based compensation plan this year. Cash-settled stock plans require the use of mark-to-market and graded vest accounting under IFRS 2, which creates the dual impact of: (1) accelerating the amount of vesting that occurs each period; and (2) adding market volatility to each vested amount, in our case, at a time when our stock has appreciated 54% in the quarter and 64% on a year-to-date basis. In contrast, last year, we had an equity-settled program that required each vest to be valued at the original grant date fair value on a constant basis over the entire amortization period. SG&A expense was $4.8 million for the quarter, down 4% from $5 million for the quarter ended June 30, 2024 and $9 million on a year-to-date basis, down 3% from $9.2 million for the six months ended June 30, 2024. The decrease in the quarter and on a six months ended basis was primarily due to lower technology costs. 1 See “non-IFRS financial measures” section in this press release and schedule 2 and 3 of "Supplemental financial information" Earnings summary Net income for the quarter was $13.5 million ($0.52 per share), up 1% from $13.4 million ($0.53 per share) for the quarter ended June 30, 2024 and was $25.5 million ($0.99 per share) on a year-to-date basis, up 2% from $24.9 million ($0.98 per share) for the six months ended June 30, 2024. Our flat net income performance was primarily due to a change in accounting requirements brought on by our new cash-settled stock plan that took effect this year, largely offsetting much of the net income we otherwise generated on market appreciation and flows into our physical trusts and carried interest and performance fee crystallizations in our managed equities segment. Cash-settled stock plans like the one we implemented this year require the use of mark-to-market and graded vest accounting under IFRS 2, which creates the dual impact of: (1) accelerating the amount of vesting that occurs each period; and (2) adding market volatility to each vested amount, in our case, at a time when our stock has appreciated 54% in the quarter and 64% on a year-to-date basis. In contrast, last year we had an equity-settled stock program that required each vest to be valued at the original grant date fair value on a constant basis over the entire amortization period.Adjusted EBITDA was $25.5 million ($0.99 per share) for the quarter, up 14% from $22.4 million ($0.88 per share) for the quarter ended June 30, 2024 and $47.4 million ($1.83 per share) on a year-to-date basis, up 12% from $42.1 million ($1.66 per share) for the six months ended June 30, 2024. Adjusted EBITDA in the quarter and on a year-to-date basis benefited from higher average AUM on market value appreciation and inflows to our precious metals physical trusts. However, offsetting these positives was our finance income being down due to last year's higher syndication fees and our net commissions also being down due to last year's physical copper trust IPO and higher ATM activity in our physical uranium trust. Subsequent events Subsequent to quarter-end, as at August 1, 2025, AUM was $40.1 billion, up slightly from $40 billion as at June 30, 2025.On August 5, 2025, the Sprott Board of Directors announced a quarterly dividend of $0.30 per share. Supplemental financial information Please refer to the June 30, 2025 quarterly financial statements of the Company and the related management discussion and analysis filed earlier this morning for further details into the Company's financial position as at June 30, 2025 and the Company's financial performance for the three and six months ended June 30, 2025 Schedule 1 - AUM continuity 3 months results (In millions $)AUMMar. 31, 2025Net inflows (1)Market value changesOthernet inflows (1)AUM Jun. 30, 2025 Net management fee rate (2) Exchange listed products - Precious metals physical trusts and ETFs - Physical Gold Trust10,732 617 614 — 11,963 0.35%- Physical Silver Trust6,235 313 382 — 6,930 0.45%- Physical Gold and Silver Trust5,764 (26)326 — 6,064 0.40%- Precious Metals ETFs518 70 103 — 691 0.29%- Physical Platinum & Palladium Trust196 104 53 — 353 0.50% 23,445 1,078 1,478 — 26,001 0.39% - Critical materials physical trusts and ETFs - Physical Uranium Trust4,262 233 941 — 5,436 0.31%- Critical Materials ETFs1,707 5 778 — 2,490 0.49%- Physical Copper Trust100 (1)3 — 102 0.33% 6,069 237 1,722 — 8,028 0.36% Total exchange listed products29,514 1,315 3,200 — 34,029 0.38% Managed equities (3)3,378 (61)566 — 3,883 0.79% Private strategies2,185 (83)27 — 2,129 0.84% Total AUM (4)35,077 1,171 3,793 — 40,041 0.45% 6 months results (In millions $)AUMDec. 31, 2024Net inflows (1)Market value changesOthernet inflows (1)AUM Jun. 30, 2025 Net management fee rate (2) Exchange listed products - Precious metals physical trusts and ETFs - Physical Gold Trust8,608 1,092 2,263 — 11,963 0.35%- Physical Silver Trust5,227 393 1,310 — 6,930 0.45%- Physical Gold and Silver Trust5,013 (188)1,239 — 6,064 0.40%- Precious Metals ETFs354 113 222 2 691 0.29%- Physical Platinum & Palladium Trust168 118 67 — 353 0.50% 19,370 1,528 5,101 2 26,001 0.39% - Critical materials physical trusts and ETFs - Physical Uranium Trust4,862 233 341 — 5,436 0.31%- Critical Materials ETFs2,020 95 375 — 2,490 0.49%- Physical Copper Trust90 (1)13 — 102 0.33% 6,972 327 729 — 8,028 0.36% Total exchange listed products26,342 1,855 5,830 2 34,029 0.38% Managed equities (3)2,873 (54)1,091 (27)3,883 0.79% Private strategies 2,320 (198)7 — 2,129 0.84% Total AUM (4)31,535 1,603 6,928 (25)40,041 0.45%(1) See "Net inflows" and "Other net inflows" in the key performance indicators and non-IFRS and other financial measures section of the MD&A.(2) Net management fee rate represents the weighted average fees for all funds in the category, net of fund expenses.(3) Managed equities is made up of primarily precious metal strategies (53%), high net worth managed accounts (40%) and U.S. value strategies (7%).(4) No performance fees are earned on exchange listed products. Certain managed equities products earn either performance fees based on returns above relevant benchmarks or earn carried interest calculated as a predetermined net profit over a preferred return. Private strategies LPs primarily earn carried interest calculated as a predetermined net profit over a preferred return. Schedule 2 - Summary financial information (In thousands $)Q22025Q1 2025Q4 2024Q3 2024Q2 2024Q1 2024Q42023Q32023Management fees44,446 39,989 41,441 38,968 38,325 36,603 34,485 33,116 Fund expense recoveries(327)(279)(280)(275)(260)(231)(241)(249)Fund expenses(2,699)(2,464)(2,708)(2,385)(2,657)(2,234)(2,200)(1,740)Direct payouts(1,709)(1,602)(1,561)(1,483)(1,408)(1,461)(1,283)(1,472)Carried interest and performance fees14,807 — 2,511 4,110 698 — 503 — Carried interest and performance fee payouts(1,298)— (830)— (251)— (222)— Net fees53,220 35,644 38,573 38,935 34,447 32,677 31,042 29,655 Commissions1,725 286 819 498 3,332 1,047 1,331 539 Commission expense - internal(180)(52)(146)(147)(380)(217)(161)(88)Commission expense - external(779)(47)(290)(103)(1,443)(312)(441)(92)Net commissions766 187 383 248 1,509 518 729 359 Finance income1,213 1,402 1,441 1,574 4,084 1,810 1,391 1,795 Co-investment income280 151 296 418 416 274 170 462 Less: Carried interest and performance fees (net of payouts)(13,509)— (1,681)(4,110)(447)— (281)— Total net revenues (1)41,970 37,384 39,012 37,065 40,009 35,279 33,051 32,271 Add: Carried interest and performance fees (net of payouts)13,509 — 1,681 4,110 447 — 281 — Gain (loss) on investments2,703 1,534 (3,889)937 1,133 1,809 2,808 (1,441)Fund expenses (2)3,478 2,511 2,998 2,488 4,100 2,546 2,641 1,832 Direct payouts (3)3,187 1,654 2,537 1,630 2,039 1,678 1,666 1,560 Fund expense recoveries327 279 280 275 260 231 241 249 Total revenues65,174 43,362 42,619 46,505 47,988 41,543 40,688 34,471 Compensation33,825 19,597 19,672 18,547 19,225 17,955 17,096 16,939 Direct payouts (3)(3,187)(1,654)(2,537)(1,630)(2,039)(1,678)(1,666)(1,560)Severance, new hire accruals and other(32)(52)(166)(58)— — (179)(122)Impact of market value fluctuation and graded vesting amortization on cash-settled equity plans (4)(12,758)(412)71 (114)(252)(155)(157)79 Net compensation17,848 17,479 17,040 16,745 16,934 16,122 15,094 15,336 Net compensation ratio43%47%44%46%44%47%47%50% Fund expenses (2)3,478 2,511 2,998 2,488 4,100 2,546 2,641 1,832 Direct payouts (3)3,187 1,654 2,537 1,630 2,039 1,678 1,666 1,560 Severance, new hire accruals and other32 52 166 58 — — 179 122 Impact of market value fluctuation and graded vesting amortization on cash-settled equity plans (4)12,758 412 (71)114 252 155 157 (79)Selling, general, and administrative ("SG&A")4,825 4,127 4,949 4,612 5,040 4,173 3,963 3,817 Interest expense286 280 613 933 715 830 844 882 Depreciation and amortization637 541 600 502 568 551 658 731 Foreign exchange (gain) loss3,263 554 (2,706)1,028 122 168 1,295 37 Other (income) and expenses— — — — (580)— 3,368 4,809 Total expenses46,314 27,610 26,126 28,110 29,190 26,223 29,865 29,047 Net income 13,501 11,957 11,680 12,697 13,360 11,557 9,664 6,773 Net income per share 0.52 0.46 0.46 0.50 0.53 0.45 0.38 0.27 Adjusted EBITDA (5)25,453 21,901 22,362 20,675 22,375 19,751 18,759 17,854 Adjusted EBITDA per share0.99 0.85 0.88 0.81 0.88 0.78 0.75 0.71 Total assets 439,429 386,131 388,798 412,477 406,265 389,784 378,835 375,948 Total liabilities 93,955 59,986 65,150 82,198 90,442 82,365 73,130 79,705 Total AUM40,040,822 35,076,761 31,535,062 33,439,221 31,053,136 29,369,191 28,737,742 25,398,159 Average AUM37,580,867 33,265,327 33,401,157 31,788,412 31,378,343 29,035,667 27,014,109 25,518,250 (1) Prior period net revenues includes revenues from non-reportable segments: Q4 2024 - $406; Q3 2024 - $497; Q2 2024 - $650; Q1 2024 - $465; Q4 2023 - $749; and Q3 2023 - $1,517.(2) Includes fund expenses and commission expense - external. Together, these amounts are included in "Fund expenses" on the income statement.(3) Includes direct payouts, internal carried interest and performance fee payouts and commission payouts. Together, these amounts are included in "Compensation" on the income statement.(4) The increase in the quarter and on a year-to-date basis was primarily due to the Company transitioning its employees, effective January 1, 2025, to a "cash-settled" stock-based compensation plan. This required mark-to-market accounting under IFRS 2 which led to market value fluctuations that were driven by NYSE:SII being up 54% in the quarter and 64% on a year-to-date basis. The Q2 balance also includes the effect of the new program's requirement to use graded vesting amortization.(5) Effective Q1 2025, we changed the name of one of our key non-IFRS measures: "adjusted base EBITDA" to "adjusted EBITDA". This was made to simplify wording and there was no impact to its calculation. Schedule 3 - EBITDA reconciliation 3 months ended6 months ended (In thousands $)Jun. 30, 2025Jun. 30, 2024Jun. 30, 2025Jun. 30, 2024Net income for the period13,501 13,360 25,458 24,917 Net income margin (1)21%28%23%28%Adjustments: Interest expense286 715 566 1,545 Provision for income taxes5,359 5,438 9,154 9,201 Depreciation and amortization637 568 1,178 1,119 EBITDA19,783 20,081 36,356 36,782 Adjustments: (Gain) loss on investments (2)(2,703)(1,133)(4,237)(2,942)Stock-based compensation (3)18,587 4,332 24,843 9,023 Foreign exchange (gain) loss3,263 122 3,817 290 Severance, new hire accruals and other32 — 84 — Revaluation of contingent consideration— (580)— (580)Carried interest and performance fees(14,807)(698)(14,807)(698)Carried interest and performance fee payouts (4)1,298 251 1,298 251 Adjusted EBITDA (5)25,453 22,375 47,354 42,126 Adjusted EBITDA margin (6)61%58%60%58% (1) Calculated as IFRS net income divided by IFRS total revenue.(2) This adjustment removes the income effects of gains or losses on short-term investments, co-investments, and private holdings to ensure the reporting objectives of our adjusted EBITDA metric are met.(3) The increase in the quarter and on a year-to-date basis was primarily due to the Company transitioning its employees, effective January 1, 2025, to a "cash-settled" stock-based compensation plan. This required mark-to-market accounting under IFRS 2 which led to market value fluctuations that were driven by NYSE:SII being up 54% in the quarter and 64% on a year-to-date basis. The Q2 balance also includes the effect of the new program's requirement to use graded vesting amortization.(4) Includes both internal and external carried interest and performance fee payouts.(5) Effective Q1 2025, we changed the name of one of our key non-IFRS measures: "adjusted base EBITDA" to "adjusted EBITDA". This was made to simplify wording and there was no impact to its calculation.(6) Prior period adjusted EBITDA margin excludes adjusted EBITDA from non-reportable segments of ($274) for the three months ended June 30, 2024 and ($735) for the six months ended June 30, 2024. Conference Call and Webcast A webcast will be held today, August 6, 2025 at 10:00 am ET to discuss the Company's financial results. To listen to the webcast, please register at: https://edge.media-server.com/mmc/p/s7hknd79 Please note, analysts who cover the Company should register at: https://register-conf.media-server.com/register/BI5667904652564dc48b47adb69137c413 This press release includes financial terms (including AUM, net commissions, net fees, expenses, adjusted EBITDA, adjusted EBITDA margin and net compensation) that the Company utilizes to assess the financial performance of its business that are not measures recognized under International Financial Reporting Standards (“IFRS”). These non-IFRS measures should not be considered alternatives to performance measures determined in accordance with IFRS and may not be comparable to similar measures presented by other issuers. Non-IFRS financial measures do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. Our key performance indicators and non-IFRS and other financial measures are discussed below. For quantitative reconciliations of non-IFRS financial measures to their most directly comparable IFRS financial measures please see schedule 2 and schedule 3 of the "Supplemental financial information" section of this press release. Net fees Net fees are calculated as: (1) total management fees net of fund expense recoveries, fund expenses and direct payouts and (2) carried interest and performance fees, net of their related payouts. Net fees is a key revenue indicator as it represents revenue contributions after directly associated costs in managing our AUM. Net commissions Net commissions are calculated as total commissions, net of commission expenses. Net commissions primarily arise from the purchase and sale of critical materials in our exchange listed products segment. Net revenues Net revenues are calculated as the total of: (1) net fees, excluding carried interest and performance fees, net of their related payouts; (2) net commissions; (3) finance income; and (4) co-investment income. Net compensation & net compensation ratio Net compensation is calculated as total compensation expense before: (1) commission expenses paid to employees; (2) direct payouts to employees; (3) carried interest and performance fee payouts to employees; (4) severance and new hire accruals; and (5) impact of market value fluctuations and graded vesting amortization on cash-settled equity plans. Net compensation ratio is calculated as net compensation divided by net revenues. EBITDA, adjusted EBITDA and adjusted EBITDA margin Effective in the first quarter of the year, we changed the name of one of our key non-IFRS measures: “adjusted base EBITDA” to “adjusted EBITDA”. The change was made to simplify wording and there was no impact to the underlying calculation. EBITDA in its most basic form is defined as earnings before interest expense, income taxes, depreciation and amortization. EBITDA (or adjustments thereto) is a measure commonly used in the investment industry by management, investors and investment analysts in understanding and comparing results by factoring out the impact of different financing methods, capital structures, amortization techniques and income tax rates between companies in the same industry. While other companies, investors or investment analysts may not utilize the same method of calculating EBITDA (or adjustments thereto), the Company believes its adjusted EBITDA metric results in a better comparison of the Company's underlying operations against its peers and a better indicator of recurring results from operations as compared to other non-IFRS financial measures. Adjusted EBITDA margins are a key indicator of a company’s profitability on a per dollar of revenue basis, and as such, is commonly used in the financial services sector by analysts, investors and management. Forward Looking Statements Certain statements in this press release contain forward-looking information and forward-looking statements (collectively referred to herein as the "Forward-Looking Statements") within the meaning of applicable Canadian and U.S. securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify Forward-Looking Statements. In particular, but without limiting the forgoing, this press release contains Forward-Looking Statements pertaining to: (i) our positioning will benefit from a highly constructive operating environment for precious metals, critical materials and their related equities; and (ii) the declaration, payment and designation of dividends and confidence that our business will support the dividend level without impacting our ability to fund future growth initiatives. Although the Company believes that the Forward-Looking Statements are reasonable, they are not guarantees of future results, performance or achievements. A number of factors or assumptions have been used to develop the Forward-Looking Statements, including: (i) the impact of increasing competition in each business in which the Company operates will not be material; (ii) quality management will be available; (iii) the effects of regulation and tax laws of governmental agencies will be consistent with the current environment; (iv) the impact of public health outbreaks; and (v) those assumptions disclosed under the heading "Critical Accounting Estimates and significant judgments" in the Company’s MD&A for the period ended June 30, 2025. Actual results, performance or achievements could vary materially from those expressed or implied by the Forward-Looking Statements should assumptions underlying the Forward-Looking Statements prove incorrect or should one or more risks or other factors materialize, including: (i) difficult market conditions; (ii) poor investment performance; (iii) failure to continue to retain and attract quality staff; (iv) employee errors or misconduct resulting in regulatory sanctions or reputational harm; (v) performance fee fluctuations; (vi) a business segment or another counterparty failing to pay its financial obligation; (vii) failure of the Company to meet its demand for cash or fund obligations as they come due; (viii) changes in the investment management industry; (ix) failure to implement effective information security policies, procedures and capabilities; (x) lack of investment opportunities; (xi) risks related to regulatory compliance; (xii) failure to manage risks appropriately; (xiii) failure to deal appropriately with conflicts of interest; (xiv) competitive pressures; (xv) corporate growth which may be difficult to sustain and may place significant demands on existing administrative, operational and financial resources; (xvi) failure to comply with privacy laws; (xvii) failure to successfully implement succession planning; (xviii) foreign exchange ("FX") risk relating to the relative value of the U.S. dollar; (xix) litigation risk; (xx) failure to develop effective business resiliency plans; (xxi) failure to obtain or maintain sufficient insurance coverage on favorable economic terms; (xxii) historical financial information being not necessarily indicative of future performance; (xxiii) the market price of common shares of the Company may fluctuate widely and rapidly; (xxiv) risks relating to the Company’s investment products; (xxv) risks relating to the Company's proprietary investments; (xxvi) risks relating to the Company's private strategies business; (xxvii) those risks described under the heading "Risk Factors" in the Company’s annual information form dated February 25, 2025; and (xxviii) those risks described under the headings "Managing Financial Risks" and "Managing Non-Financial Risks" in the Company’s MD&A for the period ended June 30, 2025. In addition, the payment of dividends is not guaranteed and the amount and timing of any dividends payable by the Company will be at the discretion of the Board of Directors of the Company and will be established on the basis of the Company’s earnings, the satisfaction of solvency tests imposed by applicable corporate law for the declaration and payment of dividends, and other relevant factors. The Forward-Looking Statements speak only as of the date hereof, unless otherwise specifically noted, and the Company does not assume any obligation to publicly update any Forward-Looking Statements, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws. About Sprott Sprott is a global asset manager focused on precious metals and critical materials investments. We are specialists. We believe our in-depth knowledge, experience and relationships separate us from the generalists. Our investment strategies include Exchange Listed Products, Managed Equities and Private Strategies. Sprott has offices in Toronto, New York, Connecticut and California and the Company’s common shares are listed on the New York Stock Exchange and the Toronto Stock Exchange under the symbol (SII). For more information, please visit www.sprott.com. Investor contact information: Glen WilliamsSenior Managing PartnerInvestor and Institutional Client Relations(416) 943-4394gwilliams@sprott.com

Sprott Announces Second Quarter 2025 Results

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