Royal Gold 2025 Q1 Earnings Strong Performance as Net Income Surges 140.1%

Royal Gold reported its fiscal 2025 Q1 earnings on May 08th, 2025. The company delivered robust results, with net income hitting a new record high for fiscal Q1. Royal Gold's impressive performance exceeded expectations, largely driven by a 29.9% increase in revenue and a remarkable 140.1% surge in net income compared to last year. The company's production guidance remained unchanged, indicating confidence in its operational outlook. Overall, Royal Gold started 2025 with strong momentum, setting a solid foundation for the rest of the year.

Revenue
Royal Gold achieved a total revenue of $193.44 million in 2025 Q1, marking a substantial increase from $148.90 million in 2024 Q1. The stream revenue contributed $122.48 million, with Mount Milligan generating $42.81 million and Pueblo Viejo adding $28.75 million. Rainy River and Andacollo also made notable contributions of $10.42 million and $12.74 million, respectively. The royalty revenue was $70.95 million, with Wassa and Cortez Legacy Zone bringing in $12.42 million and $11.14 million, respectively, while Khoemacau contributed $9.96 million.

Earnings/Net Income
Royal Gold's earnings per share (EPS) climbed significantly by 138.9% to $1.72 in 2025 Q1, compared to $0.72 in 2024 Q1. The company's net income reached $113.58 million, representing a sharp increase of 140.1% from $47.31 million the previous year. This record-setting net income underscores Royal Gold's strong financial performance this quarter.

Price Action
The stock price of Royal Gold edged down 0.86% during the latest trading day, yet showed resilience by rising 0.36% over the past week and gaining 13.85% month-to-date.

Post-Earnings Price Action Review
Royal Gold's strategy of buying shares after quarter-over-quarter revenue growth and holding for 30 days has yielded moderate returns over the past five years, despite substantial volatility and risk. The strategy achieved a compound annual growth rate (CAGR) of 6.63%, amounting to a total return of 37.67%. However, it underperformed the benchmark, which recorded a 92.56% return. The strategy's Sharpe ratio was a low 0.22, indicating limited risk-adjusted returns. With a maximum drawdown of -44.06% and volatility of 30.53%, the strategy involves significant risk, making it more suitable for experienced investors or those with lower risk tolerance.

CEO Commentary
"Our first quarter results were strong and provided an excellent start to 2025," commented Bill Heissenbuttel, President and CEO of Royal Gold. He emphasized that underlying performance from the portfolio was as expected despite relatively soft production, which was more than compensated by rising gold prices. He acknowledged the uncertainty in economic conditions and market volatility but highlighted that the company’s diversified portfolio, strong balance sheet, and ample liquidity create a stable foundation for delivering solid results for shareholders.

Guidance
Royal Gold maintains its 2025 production guidance, with Centerra Gold expecting gold production at Mount Milligan to range from 165,000 to 185,000 ounces, while Barrick’s Cortez Complex guidance remains unchanged at approximately 680,000 to 765,000 ounces. Additionally, Teck anticipates gold production at Andacollo to be between 35,000 and 39,000 ounces, an increase from 20,800 ounces in 2024. Barrick’s Pueblo Viejo guidance is also unchanged, set at 370,000 to 410,000 ounces. Overall, the company expects continued progress across its projects while navigating market uncertainties.

Additional News
Royal Gold has recently expanded its portfolio by acquiring an additional stream interest on the Xavantina mine in Brazil. This new agreement with Ero Gold Corporation involves an upfront payment of $50 million, significantly extending its area of interest. Furthermore, Royal Gold paid a quarterly dividend of $0.45 per share, marking a 12.5% increase over the prior year period. In addition, the company has achieved full repayment of the Rainy River advance stream deposit, strengthening its financial position.