U.S. Global Investors (NASDAQ:GROW) used its latest webcast to outline its operating performance, capital return priorities and thematic investment views, with CEO and Chief Investment Officer Frank Holmes joined by CFO Lisa Callicotte and Director of Marketing Holly Schoenfeldt.
Schoenfeldt opened with standard forward-looking statement disclosures and a brief company overview, describing U.S. Global Investors as an “innovative investment manager” that uses a “quantamental” approach to create thematic “Smart Beta 2.0” products. She said the firm has a long history in global investing, including launching what it characterized as the first no-load gold fund, and maintains focus areas that include gold and precious metals, natural resources, airlines and luxury goods.
Holmes emphasizes volatility, ETF industry shifts and product economics
Turning to industry structure, Holmes said actively managed ETFs have gained greater acceptance over time and described ETFs as “Uber-izing mutual funds.” He noted that actively managed domestic mutual funds continue to see net redemptions, while ETF flows remain strong. Holmes said the firm still maintains active mutual funds and is watching how industry service providers handle potential mutual fund-to-ETF conversions.
Holmes also discussed fee dynamics, saying the company’s ETFs are around 60 basis points for revenue calculations, while active mutual funds have higher fees that can have a bigger impact during strong performance periods in asset classes such as gold.
In discussing product scale, Holmes said an ETF priced at 60 basis points generally needs about $50 million in assets to break even on core costs such as audit and legal, closer to $80 million to begin covering broader portfolio and marketing costs, and around $100 million to become “profitable…in a very strong way.”
Capital return: stock repurchases and monthly dividend
Holmes said the company has been buying back stock using an algorithm on “flat or down” trading days, describing repurchases alongside dividends as a two-pillar approach to shareholder value. He said the company has not increased its dividend in recent years but has “increased substantially” the dollar amount dedicated to buybacks.
He cited repurchase activity for the three months ended December 31, 2025, stating the company repurchased 260,195 Class A shares using approximately $664,000 in cash. Holmes also said the company has reduced shares outstanding by about 10% over the past 18 months.
Holmes highlighted “shareholder yield,” describing it as dividends plus buybacks (and debt reduction, though he said the firm has no debt) divided by market capitalization. He said GROW’s shareholder yield is 9.89%, compared with Treasury yields he cited of 4.18% on the 10-year and 3.73% on the 5-year. He also noted the company has paid monthly dividends since 2000 and has kept payments “pretty consistent” since 2007, with dividends reviewed quarterly by the board.
Holmes additionally discussed ownership, saying he holds about 19% of the company and approximately 99% of the voting control, which he attributed to regulatory structure and a desire to protect mutual fund investors, while emphasizing the presence of an independent board.
Assets and profitability commentary, with a GAAP tax timing issue
Holmes reviewed assets under management, noting average AUM levels over time and saying assets were approximately $1.7 billion “as of today,” up from $1.4 billion at year-end. He also referenced quarterly EBITDA per share, stating it had been negative in the prior year but turned positive, reaching $0.04 per share in December.
He said there was a swing in reported earnings tied to tax-related accounting and audit review, describing an issue involving how certain items “should have been done differently,” which he suggested would reverse in the next quarter. Callicotte later provided specific details on that timing.
CFO details: revenue growth, lower expenses, and expected tax method change benefit
Callicotte reported average AUM of $1.48 billion and operating revenues of $2.5 million for the quarter, with pre-tax income of $535,000. She said total operating revenues of $2.5 million increased by $279,000, or 13%, from $2.2 million in the same quarter last year, driven primarily by higher AUM in USGI’s equity mutual funds, partially offset by lower AUM in the JETS ETF.
Operating expenses were $2.6 million, down $172,000, or 6%, which she attributed mainly to a $207,000 (15%) decrease in general and administrative expense due to lower ETF-related costs. This was partially offset by a $45,000 (4%) increase in employee compensation and benefits, which she said was mainly due to higher performance-based bonuses.
Callicotte said the operating loss for the quarter was $88,000, an improvement of $451,000 versus the same quarter of fiscal 2025. She said other income increased $200,000 year over year, largely due to improved unrealized investment results and a swing to realized foreign currency gains.
She also reported a net loss after taxes of $846,000, or $0.07 per share, compared with a net loss of $86,000, or $0.01 per share, in the same quarter last year. Callicotte attributed the larger net loss to a tax adjustment of approximately $1.3 million related to the tax treatment of certain securities. She said the company filed a tax accounting method change with the IRS and expects to record an offsetting benefit in the quarter ending March 31, 2026, with the net tax expense related to the method change expected to be zero for the fiscal year.
On the balance sheet, Callicotte said cash and cash equivalents were approximately $25.2 million at December 31, 2025, up about $675,000 (3%) since June 2025. She reported current investments totaling $9.2 million, other-asset investments of approximately $6.5 million, and said liabilities increased about $193,000 since June 30, 2025. She also reported net working capital of $36.7 million and a current ratio of 19.4-to-1.
Marketing and distribution: social channels and investor content
Schoenfeldt closed with updates on marketing and distribution efforts, emphasizing the company’s use of YouTube and TikTok for market commentary and shareholder engagement. She highlighted recent content focused on gold and global markets, including two market updates featuring retired Lieutenant General John Evans, and pointed to recent interviews with Holmes across several media outlets. She also referenced the firm’s interactive “periodic table of commodity returns” and said gold remained a central theme among the most-read “Frank Talk” blog posts during the quarter.
The company directed shareholders to contact it via email with follow-up questions.
About U.S. Global Investors (NASDAQ:GROW)
U.S. Global Investors, Inc is an independent asset management firm that specializes in natural resource and global equity investing. The company focuses on sectors such as precious metals, energy, agriculture and emerging markets, seeking long-term capital appreciation for individual and institutional investors. Its investment strategies are built around thematic, research-driven approaches that aim to capture opportunities across commodity cycles and global economic trends.
The firm offers a range of investment products, including open-end mutual funds, closed-end funds, exchange-traded funds and separately managed accounts.
