A-Mark's Q4 2025 Earnings Call: Contradictions Emerge on Market Activity, Backwardation, and Strategic M&A

The above is the analysis of the conflicting points in this earnings call

Date of Call: September 9, 2025

Financials Results

• Revenue: $2.51B, down 1% YOY
• EPS: $0.41 per diluted share, compared to $0.29 in the prior year
• Gross Margin: 3.25%, compared to 1.7% in the prior year

Business Commentary:

• Revenue Trends and Market Conditions:
• A-Mark reported net income of $17.3 million for fiscal year 2025, with a non-GAAP earnings before interest, taxes, depreciation, and amortization (EBITDA) of $64.4 million.
• Despite market challenges, there was a 2,167% increase in non-GAAP EBITDA in Q4 2025 compared to the previous quarter.

• The reported results were driven by the integration of recent strategic acquisitions, although ongoing uncertainties in the physical markets and range-bound premium spreads affected profitability.

• Impact of Strategic Acquisitions:

• The acquisition of Spectrum Group International, AMS Holdings, Pinehurst Coin Exchange, and a controlling interest in Silver Gold Bull led to a 22% increase in gross profit and a 5% increase in revenues for the full fiscal year.

• These acquisitions expanded A-Mark's product offerings and customer base, particularly in higher-margin luxury segments and international markets.

• Inventory Management and Cost Optimization:

• Inventory levels were managed effectively, with a 1.9 inventory turn ratio in Q4 2025, down from 2.3 in Q4 2024.

• A-Mark is focusing on reducing inventories to lower carrying costs and increase flexibility amid current market conditions where premiums have contracted.

• International Expansion:

• A-Mark's international presence, particularly in Asia, grew significantly, contributing over 60% of revenue year-to-date in 2025.
• The expansion into Asia, summarized by the full operation of LPM in Singapore, broadened A-Mark's reach into higher-margin collectible and luxury segments.

Sentiment Analysis:

• “Q4 results improved from the previous quarter with a 99% increase in gross profit…” but “the market is about how it has been over the last 3 to 6 months.” Management cited headwinds from higher spot prices, compressed silver premiums, tariff-related uncertainty, and episodes of backwardation, yet remained “confident in A‑Mark’s long-term trajectory” with integration and cost optimization underway.

Q&A:

• Question from Thomas Forte (Maxim Group LLC): Where are we in the cycle given Q/Q improvement?
  Response: Environment remains sluggish with high spot prices and compressed premiums; focus is on integration and cost optimization to offset headwinds.

• Question from Thomas Forte (Maxim Group LLC): Current thoughts on strategic M&A after recent deals?
  Response: Pipeline remains active; integration progressing; open to additional deals while balancing capital allocation.

• Question from Thomas Forte (Maxim Group LLC): Are countercyclical acquisitions delivering?
  Response: Yes—rare coins are strong; Stack’s Bowers posted a record $62M auction, supporting higher-margin, countercyclical mix.

• Question from Thomas Forte (Maxim Group LLC): Is the Las Vegas distribution center upgrade complete?
  Response: About 95% complete and operational; delivering capacity and cost savings with ongoing software integration.

• Question from Michael Baker (D.A. Davidson & Co.): What constitutes a good environment for A‑Mark?
  Response: Volatility and investor fear spur demand; current equity-market strength and high spot prices haven’t translated into DTC momentum.

• Question from Michael Baker (D.A. Davidson & Co.): How are tariffs impacting the business?
  Response: Tariff uncertainty disrupted metal location and hedging, raised carry costs, and at times flipped contango to backwardation.

• Question from Michael Baker (D.A. Davidson & Co.): What drove the strong gross margin?
  Response: Mix shift from higher-margin acquisitions lifted GP%, though SG&A rose; plan to reduce inventories to lower carry costs.

• Question from Andrew Scutt (ROTH Capital Partners): Outlook for international mix as exposure rises?
  Response: Early but promising—LPM Singapore retail/wholesale is onboarding customers and accessing higher-margin Asia-origin products.

• Question from Andrew Scutt (ROTH Capital Partners): Which DTC areas show strength now?
  Response: Rare coins and select higher-premium bullion; CFC loan book growing; some silver interest >$40, but premiums remain pressured.

• Question from Gregory Gibas (Northland Capital Markets): Q4 vs Q3 backwardation/carry costs—trending better?
  Response: Still challenging; policy headlines created short-term backwardation and financing disruptions, typically easing after weeks.

• Question from Gregory Gibas (Northland Capital Markets): Integration progress for SGI and AMS?
  Response: Purchase accounting largely done; Pinehurst logistics consolidated to Las Vegas; leveraging AMS marketing; building integrated trading desk.