Executive Summary
US Global Investors Inc. (GROW) delivered a QQ2 2025 quarter marked by modest revenue and a net loss, reflecting ongoing sensitivity to asset flows and fund-level performance in a volatile macro environment. Revenue totaled $2.231 million, down 21% year-over-year, driven largely by weaker assets under management (AUM) post-2024 peak levels, including the JETS ETF. The company reported a net loss of $86 thousand and an EPS of -0.0064 for the quarter, with gross margin around 45% and an operating loss of $0.539 million, signaling that the quarter faced higher operating costs and lower realized investment gains. Notably, the balance sheet remains exceptionally healthy for a microcap asset manager: cash and cash equivalents of $26.0 million, no long-term debt, and a current ratio near 20:1, providing substantial liquidity headroom to weather an environment of muted asset flows. Management continues to pursue active capital return through buybacks and a steady dividend, and remains focused on long-duration themes through WAR (A&D) and JETS (airlines) as core engines for growth and diversification. Management commentary emphasizes a disciplined, quantamental approach (smart beta 2.0), ongoing portfolio back-testing, and strategic repositioning (e.g., China fund exit) to align with evolving global risk and opportunity sets. The near-term outlook leans on secular trends in defense spending, data center/gpu demand, and continued monetization of thematic products, with a clear emphasis on maintaining a robust liquidity cushion and a sizable buyback program as a signal of undervaluation.
Key Performance Indicators
QoQ: -6.60% | YoY:-45.85%
QoQ: 3.58% | YoY:-380.73%
QoQ: -127.30% | YoY:-107.00%
QoQ: -127.83% | YoY:-107.44%
Key Insights
Revenue: $2.231 million in QQ2 2025; YoY -20.8%, QoQ +3.4%. Gross Profit: $1.005 million; Gross Margin: 45.0%; YoY -45.9%, QoQ -6.6%. Operating Income: -$0.539 million; Operating Margin: -24.2%; YoY -380.7%, QoQ +3.6%. Net Income: -$0.086 million; Net Margin: -3.9%; YoY -107.0%, QoQ -127.3%. EPS: -$0.0064; YoY -107.4%, QoQ -127.8%. Average AUM: $1.5 billion. Cash & equivalents: $26.0 million; Current investments: $9.7 million; Total assets: $50.11 million. Total liabilities: $2.82 million; T...
Financial Highlights
Revenue: $2.231 million in QQ2 2025; YoY -20.8%, QoQ +3.4%. Gross Profit: $1.005 million; Gross Margin: 45.0%; YoY -45.9%, QoQ -6.6%. Operating Income: -$0.539 million; Operating Margin: -24.2%; YoY -380.7%, QoQ +3.6%. Net Income: -$0.086 million; Net Margin: -3.9%; YoY -107.0%, QoQ -127.3%. EPS: -$0.0064; YoY -107.4%, QoQ -127.8%. Average AUM: $1.5 billion. Cash & equivalents: $26.0 million; Current investments: $9.7 million; Total assets: $50.11 million. Total liabilities: $2.82 million; Total stockholders’ equity: $47.29 million; No long-term debt. EBITDA: -$0.10 million; EBITDARatio: -0.0448. Cash flow from operations: -$0.399 million; Free Cash Flow: -$0.406 million. Net cash used in financing activities: -$0.885 million; Net change in cash: -$1.296 million; Cash at end of period: $27.04 million. Current ratio: 20.0x; P/BV: 0.697x; Dividend yield (trailing): ~0.93%. Buybacks: 236,731 Class A shares repurchased in the quarter for ~$0.587 million; 2024 full-year buybacks ~807,000 shares. Management commentary highlights include ongoing JV/Sector bets via WAR and JETS, a focus on “two-pillar” shareholder value (dividend + buyback), and a strategic exit from China region exposure pending policy shifts.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
2.23M |
-20.83% |
3.43% |
| Gross Profit |
1.01M |
-45.85% |
-6.60% |
| Operating Income |
-539.00K |
-380.73% |
3.58% |
| Net Income |
-86.00K |
-107.00% |
-127.30% |
| EPS |
-0.01 |
-107.44% |
-127.83% |
Key Financial Ratios
operatingProfitMargin
-24.2%
operatingCashFlowPerShare
$-0.03
freeCashFlowPerShare
$-0.03
dividendPayoutRatio
-355%
priceEarningsRatio
-95.74
Management Commentary
- Strategy and capital allocation: Frank Holmes emphasizes a two-pillar strategy to boost shareholder value (dividends plus buybacks) and notes a disciplined algorithm for buybacks on flat/down days; management believes the stock is undervalued and will continue repurchasing shares to benefit long-term holders. (Frank Holmes) - Product and macro strategy: Holmes highlights the “DNA of volatility” and the portfolio’s exposure to volatility drivers (JETS, HIVE, data centers, AI, semiconductors). He notes that GROW’s 10-day volatility is lower than the Dow Jones Asset Managers Index due to total shareholder yield from buybacks. He also discusses macro trends narrowing the gap between active and passive ETFs and stresses growth through thematic 2.0 products. (Frank Holmes) - JETS and WAR emphasis: Holmes presents JETS as a leader among airline ETFs with outperformance relative to airline indices, and introduces WAR (aerospace & defense ETF) as a secular growth platform focused on semiconductors, data centers, cybersecurity, and defense-related equities; WAR is positioned to benefit from rising global defense spending. (Frank Holmes) - China fund exit and strategic shifts: He explains winding down the China Region Opportunity Fund due to regulatory/policy concerns and geopolitics, reinforcing a focus on more resilient “New Red Cold War” defense/tech themes. (Frank Holmes) - Marketing and distribution: Holly Schoenfeldt notes the importance of digital engagement (YouTube, TikTok) and educational content to expand shareholder reach; WEB/webcasts with defense leaders and periodic commodity insights are used to drive awareness. (Holly Schoenfeldt) - Financial performance context: Lisa Callicotte confirms a soft quarter driven by lower JETS AUM and higher operating costs; she emphasizes the balance sheet strength with cash liquidity and no long-term debt, and notes the resilience provided by a high current ratio and liquidity buffer. (Lisa Callicotte)
Our strategy is to create thematic products that are sustainable. And this is using a smart beta 2.0 strategy, which requires rigorous back-testing and ongoing detailed analysis of data graphs.
— Frank Holmes
We believe we're deeply undervalued, and we have a disciplined algorithm for flat and down days. We continue to buy back our stock for and the long-term investor gets that benefit.
— Frank Holmes
Forward Guidance
- Secular tailwinds support defense tech and data-center/AI infrastructure (WAR). Management cites global defense spending trending higher (slides reference $2.4 trillion defense spend) and aviation recovery signals ( bookings and industry demand for travel) as drivers for future asset growth in WAR and JETS. - Near-term revenue trajectory depends on asset flows and fund performance; continued emphasis on buybacks and a monthly dividend supports shareholder value while liquidity buffers remain ample. - Key watchpoints include: (a) AUM flows into JETS and other thematic funds, (b) WAR asset accumulation and performance relative to peers, (c) pace of buybacks and any changes to dividend policy, (d) progress with LATAM expansion and marketing-driven asset inflows, and (e) macro risk factors (inflation, travel demand, and regulatory changes impacting crypto-related assets like HIVE). - Achievability: While precise revenue targets are not provided, the firm’s financial position (no debt, cash-rich balance sheet) and the platform’s diversified, back-tested thematic products provide a credible path to improved shareholder value if asset flows stabilize and growth themes (air travel, defense tech, data centers, cybersecurity) remain favorable. Investors should monitor quarterly AUM, fund performance, buyback cadence, and WAR/JETS assets as primary indicators of momentum.