Sprott Q2 Earnings Call Highlights
Sprott (NYSE:SII) reported second-quarter results marked by lower assets under management following a sharp pullback in precious-metals prices, while higher average assets over the past year supported growth in earnings and adjusted EBITDA.
Chief Executive Officer Whitney George described the period as a challenging quarter for precious metals, citing volatility across commodity, currency and interest-rate markets. Spot gold declined 14.1% during the quarter and silver fell 22%, he said. George attributed the correction primarily to cyclical factors, adding that the company believes longer-term supports for gold—including government debt, fiscal deficits, monetary debasement and demand for reserve assets outside traditional sovereign debt markets—remain in place.
Assets Under Management Decline as Precious Metals Correct
Total assets under management ended the quarter at C$55.6 billion, down C$9.5 billion from the prior quarter and 15% below C$65.1 billion as of March 31. AUM was also down 7% from C$59.6 billion at the end of 2025.
The company reported C$400 million in net redemptions during the quarter, primarily from precious-metals physical trusts. John Ciampaglia, CEO of Sprott Asset Management, said the physical-trust business experienced a C$8.2 billion, or 16%, AUM decline as investors took profits in precious metals after eight consecutive quarters of inflows.
Despite the quarterly decline, Ciampaglia said AUM in physical trusts remained more than 40% higher than a year earlier. Average AUM for the second quarter was C$63.9 billion, up 70% from C$37.6 billion in the year-earlier period. Year-to-date average AUM was C$66.6 billion, an 88% increase from the comparable period in 2025.
Managed-equities AUM declined by about C$700 million during the quarter as lower precious-metals prices weighed on mining equities. George said the segment recorded modest net redemptions, although the company saw positive flows in its U.S. business as it completed the conversion of legacy brokerage client accounts into AUM.
Earnings and EBITDA Rise on Higher Average AUM
Second-quarter net income was C$34.3 million, compared with C$13.5 million a year earlier. For the first six months of 2026, net income totaled C$63.5 million, up from C$25.5 million in the prior-year period.
Adjusted EBITDA was C$50.8 million in the quarter, doubling from C$25.5 million a year earlier. First-half adjusted EBITDA reached C$108.7 million, compared with C$47.4 million in the first half of 2025.
Chief Financial Officer and Co-COO Kevin Hibbert said the increases were driven primarily by higher average AUM in the company’s exchange-listed products and managed-equity businesses. The first-half results also benefited from carried-interest crystallization in the private-strategies segment during the first quarter.
George said Sprott’s adjusted EBITDA margin was 71% and characterized the company’s model as one that can generate operating leverage without financial leverage. He said the company is debt-free, produces significant free cash flow and continues to repurchase shares opportunistically.
Critical Materials ETFs Post Positive Net Flows
Critical-materials products were a relative bright spot in the quarter. While the company’s ETF suite recorded a 10% AUM decline, it generated positive net flows, supported by investor interest in uranium, copper, critical materials and rare earths. Positive performance in copper stocks also helped ETF AUM, Ciampaglia said.
Ciampaglia said uranium prices remained resilient amid what he called a structural supply deficit, while copper prices were near all-time highs because of tight physical-market conditions and speculation about potential U.S. tariffs on a broader range of copper products.
In response to analyst questions, Ciampaglia identified copper and uranium as two commodities Sprott views as especially important to energy-security and electricity-demand themes. He cited copper’s role in electricity transmission and uranium’s role in nuclear power generation, while noting that new copper mines are expensive and lengthy projects to develop.
The company said its newer ETFs have reached asset and liquidity milestones more quickly than earlier launches. Its Sprott Rare Earths ETF Ex-China, trading under the symbol REXC, reached C$50 million in assets in 32 trading days. Ciampaglia said the fund’s early traction reflected investor attention to rare-earth supply chains, the fund’s pure-play focus and its lack of Chinese-equity exposure.
Ciampaglia also said scale is improving ETF profitability. He said many of Sprott’s North American ’40 Act funds can reach break-even at approximately C$25 million in assets, while larger asset bases reduce fixed costs as a percentage of AUM and can lower service-provider costs.
Private Strategies and Outlook
Private-strategies AUM was C$2 billion as of June 30. George said Sprott is evaluating new strategies and extensions of existing offerings, while fundraising continues for its fourth private-lending fund. The company expects that fund to close sometime in 2027.
Management said it continues to invest in sales, marketing and technology capabilities and has formed a team to monitor developments in digital offerings. George said geopolitical and trade disruptions had created near-term pressure on commodity prices, but management continues to see structural investment interest in both precious metals and critical materials.
About Sprott (NYSE:SII)
Sprott Inc is a Toronto‐based alternative asset manager specializing in precious metals, real assets and related investment vehicles. Founded in 1981 by Eric Sprott, the firm has built a reputation for offering physically backed bullion trusts, exchange‐traded funds (ETFs), mutual funds and private managed accounts that provide exposure to gold, silver, platinum and other hard assets. Sprott's product lineup also includes royalty and streaming strategies, which grant investors long‐term participation in mining project cash flows without direct operational risk.
In addition to its flagship physical bullion trusts, Sprott offers actively managed equity portfolios that focus on companies engaged in the exploration, development and production of precious metals.
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