U S GLOBAL INVESTORS INC (GROW)·Q3 2025 Earnings Summary

Executive Summary

• GROW reported operating revenues of $2.10M and a net loss of $0.38M ($0.03/share) for Q3 FY2025 as AUM pressure (notably at JETS) reduced fee revenues; other income improved but could not offset a larger operating loss .
• Management reiterated capital returns (monthly dividend of $0.0075/share through June and active buybacks) and highlighted a strong liquidity position with ~$26.3M cash/cash equivalents, supporting flexibility despite weaker operating income .
• Strategic pivot: the company will increase exposure to Bitcoin monthly and accumulate HIVE shares as notes mature, citing an improving U.S. regulatory backdrop for digital assets; WAR (defense/AI ETF) is positioned to benefit from elevated geopolitical risk and defense spend .
• No formal revenue/EPS guidance and no Wall Street consensus for Q3; near‑term stock catalysts are likely to be flows/AUM sensitivity tied to gold (Basel III as a potential tailwind), airlines sentiment, traction of WAR/TRIP, and execution on the Bitcoin/HIVE allocation plan .

What Went Well and What Went Wrong

• What Went Well

  • Other income improved year over year on better realized/unrealized investment results, helping partially offset operating pressure .
  • Capital return and balance sheet strength: Board continued monthly dividends ($0.0075/share through June) and buybacks (784,466 shares repurchased in the last 12 months), with ~$26.3M in cash/cash equivalents at quarter-end .
  • Strategic positioning: WAR ETF aligned with rising global defense spending and AI/security themes; management also sees a favorable regulatory shift to increase Bitcoin/HIVE exposure. Quote: “Each month, the Company plans to gain exposure to Bitcoin; separately, we plan to accumulate common shares in HIVE….” .

• What Went Wrong

  • Revenue pressure: Operating revenues fell to $2.10M (down ~19% YoY), driven by lower AUM, “especially in our JETS ETF” .
  • Margins compressed: Operating loss widened to $(0.89)M; net loss increased to $(0.38)M as revenue decline outpaced modest OpEx reductions (G&A down, advertising up to drive AUM growth) .
  • AUM headwind: Period-end AUM declined to ~$1.2B (from ~$1.5B at Dec 31, 2024), pressuring advisory revenues; management highlighted investor apathy and tariff-driven volatility as macro headwinds .

Financial Results

Estimates vs. Actuals (S&P Global):

• Q3 2025 consensus: No EPS or revenue consensus available; cannot assess beat/miss. Values retrieved from S&P Global.*

Segment breakdown: Not disclosed in the 8-K/press release; revenue primarily reflects advisory fees tied to AUM .

KPIs

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Each month, the Company plans to gain exposure to Bitcoin; separately, we plan to accumulate common shares in HIVE as our HIVE notes mature, as we continue to believe HIVE remains significantly undervalued.”
• “Year-to-date through the end of April, WAR has performed well against the market as investors react to the ongoing conflicts in Ukraine and Israel.”
• “We’re thrilled to see gold break through $3,500 an ounce… I now believe the metal could climb as high as $6,000 an ounce… with the U.S. set to adopt Basel III rules… recognizing gold as a Tier 1 asset.”
• CFO on drivers: “Operating revenues were $2.1 million… a decrease of $490,000 or 19%… primarily due to decreases in assets under management… especially in our JETS ETF… Operating expenses… decreased 3%… offset by an increase in advertising… to grow our assets under management.”
• Buybacks detail: “For the 3 months ended March 31, 2025, the company repurchased… 187,987 Class A shares… approximately $454,000.”

Q&A Highlights

• The webcast consisted of prepared remarks; management invited emailed questions and then concluded the event. No live analyst Q&A was conducted .

Estimates Context

• S&P Global shows no active consensus for EPS or revenue for Q3 FY2025; therefore, a beat/miss assessment versus Street is not available. Values retrieved from S&P Global.*

Implications: Absent formal coverage, estimate revisions are unlikely to be a near‑term stock driver; flows/AUM sensitivity and product traction will dominate.

Key Takeaways for Investors

• Revenue decline (-19% YoY) and wider operating loss were driven by lower AUM (notably at JETS), partially mitigated by stronger other income; near-term reacceleration depends on flows into core themes (airlines, gold, defense/AI) .
• Structural tailwinds in gold (Basel III, central bank demand) and defense/AI (WAR) could support AUM recovery; monitor GOAU/WAR performance and flows as leading indicators .
• New Bitcoin/HIVE allocation plan introduces incremental balance‑sheet risk/optionality tied to digital assets; execution and regulatory evolution are key watch items .
• Capital return policy (monthly dividends, ongoing buybacks) and strong liquidity (~$26.3M cash) provide a floor to equity value during operating softness .
• Airlines sentiment remains the swing factor for JETS; management argues for secular travel strength and pricing power—watch fuel prices, tariff headlines, and industry load factors for flow inflections .
• No Street coverage reduces event‑risk from earnings prints; trading likely to be more narrative/AUM driven with catalysts around Basel III timing, defense/AI budgets, and crypto market momentum. Values retrieved from S&P Global.*
• Tactical: Consider positioning around fundamental catalysts (gold/defense tailwinds, digital asset exposure cadence) while relying on balance sheet/capital returns to buffer downside .

Footnote: *Values retrieved from S&P Global.