U.S. Global Investors (NASDAQ:GROW) reported higher revenue and returned to an operating profit in its fiscal first quarter, but net income fell as investment results weakened from a year earlier.
The investment manager recorded net income of $171,000, or 1 cent per share, for the quarter ended Sept. 30, 2026, down from $1.5 million, or 12 cents per share, in the prior-year period. Average assets under management were $1.6 billion.
Chief Financial Officer Lisa Callicotte said operating revenue rose 18% to $2.7 million from $2.3 million, primarily because of higher advisory fees from gold and natural resource mutual funds and exchange-traded funds. Operating expenses declined 6%, helping the company post operating income of $55,000, compared with an operating loss of $515,000 a year earlier.
Investment Results Weigh on Profit
Other income fell to $193,000 from $2.4 million in the prior-year quarter. Callicotte attributed the decline primarily to lower net investment income, including a $1.3 million unrealized gain recognized in the year-earlier period and $185,000 in unrealized losses on equity and debt securities in the latest quarter.
Callicotte said the company’s operating earnings are based on average assets under management, while investment earnings are primarily affected by changes in the market value of its holdings.
Lower general and administrative expenses contributed to the reduction in operating costs. Those expenses fell by $117,000, largely because of lower ETF costs, while advertising expenses declined by $37,000 following expanded ETF marketing efforts in the prior year.
At quarter-end, U.S. Global Investors held approximately $24.3 million in cash and cash equivalents and $9.8 million in current investments. Net working capital stood at $35.4 million, and the current ratio was 23.1 to 1, Callicotte said.
Buybacks and Dividends
Chief Executive Officer and Chief Investment Officer Frank Holmes said the company repurchased 105,457 Class A shares during the quarter for approximately $319,000. He said shares outstanding have declined by about 20% since December 2019.
Holmes described dividends and buybacks as the company’s two-pillar approach to returning value to shareholders. He said U.S. Global Investors has paid monthly dividends since June 2007 and cited a current dividend yield of approximately 3.36%.
The company believes its shares are undervalued and uses an algorithm to buy stock when the price is flat or lower than on the previous trading day, Holmes said. He also said he owns 21% of the company and controls approximately 99% of the voting power.
Gold and Thematic ETFs
Holmes used much of the webcast to discuss the company’s thematic investment strategy, including funds focused on gold, airlines, shipping and defense-related technology. He said the company combines economic and policy analysis with quantitative research when developing products under its “Smart Beta 2.0” approach.
Holmes said the actively managed WAR ETF, which focuses on technology and the rebuilding of military capabilities, had gained 35% year to date, compared with a 12% gain for the market. He also said the SEA ETF was up 40%. He did not specify the market benchmark in those comparisons.
He said the WAR ETF had joined the company’s JETS, GOAU and SEA funds on the Lima Stock Exchange as part of its Latin American distribution strategy.
Holmes reiterated his view that gold can play a role in a diversified portfolio, citing a 10% to 15% weighting and annual rebalancing. He said the company focuses on gold stocks and sees continued demand for precious metals, energy and infrastructure.
About U.S. Global Investors (NASDAQ:GROW)
U.S. Global Investors, Inc. (NASDAQ:GROW) is an investment management company headquartered in San Antonio, Texas. The company provides investment advisory and management services to mutual funds, exchange-traded funds and other investment accounts. Its investment products focus on specialized areas of the global economy, including natural resources, precious metals, emerging markets, global infrastructure, airlines and maritime transportation. The company also offers separately managed accounts and related shareholder and fund administration services.
