US Global Investors Inc (GROW) Q3 2025 Earnings Report

Performance snapshot (quarter ended 2025-03-31):
- Revenue: $2.103 million (YoY growth not stated in company commentary; QoQ change: -19% from $2.604 million in Q3 2024)
- Gross Profit: $0.813 million; Gross margin: 38.66%
- Operating Expenses: $1.726 million; EBITDA: $(0.893) million; EBIT/Operating Income: $(0.893) million; Operating Margin: -42.46%
- Other Income/(Expense), Net: $0.648 million; Income Before Tax: $(0.245) million; Income Tax Expense: $0.137 million; Net Income: $(0.382) million; Net Margin: -18.16%
- EPS (GAAP): $(0.03) per share; Diluted EPS: $(0.03)
- Weighted Average Shares Outstanding: 13.02 million (basic), 13.02 million (diluted)
- AUM: $1.40 billion;assets under management
- Cash and Cash Equivalents: $26.26 million; Total Assets: $48.76 million
- Current Ratio: 21.69x; No long-term debt; Total Debt: $0.017 million; Net Debt: $(26.245) million (net cash position)
- Free Cash Flow: $(0.424) million; Operating Cash Flow: $(0.425) million
- Shareholder Activity: Dividends paid and stock repurchases contributed to a total shareholder yield around 10.5% (per ratio metrics), reflecting ongoing capital return strategy

Quarterly comparison highlights (from earnings call and 10-Q data):
- Revenue declined 19% QoQ versus the prior quarter; asset-level headwinds largely tied to lower JETS AUM and market conditions impacting advisory revenues. Management cited a weaker short-term cycle in JETS-based funds but remained constructive on the longer-term growth trajectory of gold, crypto, and defense-themed products.
- EBITDA and net income remained negative, reinforcing the ongoing profitability/scale challenge in a small cap asset manager with niche Smart Beta 2.0 strategies. The company remains focused on cost discipline, cash preservation, and strategic buybacks as a means to create value over the cycle.
- Balance sheet remained highly liquid with robust cash, minimal liabilities, and no long-term debt, enabling strategic flexibility to fund growth initiatives and capital returns.

Key management takeaways from the QQ3 2025 earnings call and webcast:
- Strategy and product discipline: Frank Holmes emphasized the Smart Beta 2.0 framework, backtesting across thousands of hours, and quarterly portfolio rebalancing to target “60-70% momentum factors” while seeking GARP-like discounts. Quote: "Smart Beta 2.0 requires rigorous back testing for thousands of hours... rebalance your portfolio every quarter and recalibrate..." Significance: reinforces a disciplined, evidence-based approach to thematic investing and risk management in a volatile market.
- Bitcoin ecosystem exposure: The leadership stressed a refocus on crypto-related opportunities and Bitcoin exposure, with a plan to redeploy capital into Bitcoin and HIVE as the regulatory environment matures. Quote: "we are going to start increasing our exposure back to the Bitcoin ecosystem". Significance: positions GROW to benefit from a potential crypto-capital inflow and regulated crypto landscape.
- Gold and Basel III protection: Holmes highlighted Basel III and the positive shift toward physical gold as Tier 1 liquidity, underscoring the secular demand for gold as a safe haven. Quote: "physical gold is going to all of a sudden be treated as tier 1, which is called high-quality liquid asset". Significance: could drive fund flows into gold strategies and strengthen balance sheet resilience.
- Market volatility and airline exposure: management noted that volatility in gold stocks can run ahead of traditional equity indices and that the airline/performance dynamic (JETS) has historically been volatile but secularly growth-oriented, aided by AI and pricing power in travel. Significance: supports a long-run thesis for diversification into JETS-like funds, while acknowledging near-term headwinds.
- Outperformance versus microcaps: Holmes pointed to outperformance versus the Russell Microcap Index on a longer horizon, signaling credibility of the thematic approach despite quarterly volatility. Quote: "we've outperformed the Russell Microcap Index". Significance: supports the premium attached to the firm’s niche asset-management bets and historical fund performance.

Overall, GROW sits at an inflection point typical for small-cap, niche asset managers: a volatile near-term earnings path but with meaningful optionality embedded in its strategic pivots. The QQ3 2025 results show a quarterly net loss and negative EBITDA, yet the balance sheet remains robust with no long-term debt and ample liquidity. The company’s strategic emphasis on Smart Beta 2.0, combined with a renewed focus on the Bitcoin ecosystem and gold-based strategies, provides multiple potential pathways for revenue and AUM growth over the next several quarters. The management’s commitment to quarterly rebalancing discipline and selective capital allocation—alongside a growing WAR ETF and travel-related themes—could unlock accretive flows if macro conditions stabilize and crypto regulatory clarity improves. Key catalysts to watch include: (1) fund inflows into WAR, JETS, and gold families; (2) the pace of Bitcoin/HIVE-related deployments and the evolving regulatory landscape for crypto assets; (3) Basel III-related demand for physical gold and how banks treat gold in liquidity metrics; and (4) potential M&A activity to broaden the asset base and distribution footprint. Given the current liquidity position and the ability to redeploy capital, the stock could rerate higher if inflows recover and the company demonstrably narrows losses while expanding high-conviction product cohorts. Investors should monitor the quarterly updates on AUM trajectory, fund performance (especially JETS and WAR), and the efficacy of the Bitcoin investment thesis as macro and policy conditions evolve.