Royal Gold (RGLD -0.46%), a leading precious metals streaming and royalty company, released its second quarter 2025 earnings on August 6, 2025. The report highlighted record GAAP net income of $132.3 million. Net cash provided by operating activities totaled $152.8 million, compared to $113.5 million for the three months ended June 30, 2024, but GAAP revenue came in below analyst forecasts at $209.6 million—falling short of the $217.8 million consensus. Management emphasized progress on strategic acquisitions and portfolio diversification. Overall, the quarter reflected record financial results driven by higher precious metal prices, balanced by headwinds related to recent transactions, rising leverage, and partner mine performance.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $1.81 | $1.69 | $1.25 | 44.8 % |
| Revenue (GAAP) | $209.6 million | $217.8 million | $174.1 million | 20.4% |
| Adjusted EBITDA Margin | 84 % | 81 % | 3 pp | |
| Free Cash Flow (Non-GAAP) | $40.1 million | $62.4 million | (35.7 %) | |
| Operating Cash Flow (GAAP) | $152.8 million | $113.5 million | 34.7 % |
Source: Analyst estimates for the quarter provided by FactSet.
About Royal Gold and Its Business Model
Royal Gold acquires and manages streams and royalties from gold, silver, copper, and other metal mining operations. Instead of running mines, it finances mining partners in exchange for rights to a fixed share of production or revenue. This means it generates income without bearing the direct costs and operational risks of mining.
Its financial results depend mainly on commodity prices—especially gold, which contributed 78% of revenue. Other key factors for success include effective acquisition and management of stream and royalty interests, a strong balance sheet, and ongoing operational performance at partner mines. The company’s strategy focuses on expanding its portfolio and maintaining competitive advantage through deals and prudent capital management.
Quarter Highlights: Record Results and Major Acquisitions
The quarter saw Royal Gold achieve record GAAP net income and operating cash flow, with adjusted EBITDA margin reaching 84% (non-GAAP). However, GAAP revenue was slightly short of expectations, underscoring the volatility tied to precious metal prices and partner mine outputs.
Higher realized gold and silver prices—$3,280 per ounce for gold and $33.68 per ounce for silver—were a main driver of these results, outweighing volume headwinds at certain mines. Gold, silver, and copper prices make up the core of the business and can swing results considerably from quarter to quarter, as seen in the strong average realized prices boosting revenues.
Royal Gold announced the planned acquisitions of Sandstorm Gold and Horizon Copper for approximately $3.5 billion and $196 million, respectively, at the time of signing. After completing the transactions, Royal Gold’s pro-forma portfolio will comprise 393 streams and royalties, including 80 revenue-producing interests and 47 in development. Additionally, it secured a new $1 billion gold stream on the Kansanshi mine, a large, long-life project in Zambia, financed mainly by a draw on its revolving credit facility.
There were some setbacks in the company’s partner mining operations. Mount Milligan, operated by Centerra Gold, lowered its 2025 gold production forecast due to lower grades, while guidance at Xavantina was cut after first-half production fell short. Mara Rosa paused processing after heavy rains, impacting output for the period. Some of these issues highlight risks Royal Gold faces, as its partners’ performance directly influences its top line. Still, robust contributions from assets like Peñasquito, Pueblo Viejo (run by Barrick), and Khoemacau balanced these headwinds, illustrating the benefit of a diversified royalties and streams portfolio.
Financial Health, Liquidity, and Dividend Update
The company closed the quarter with $248.2 million in cash and access to a $1.25 billion liquidity pool—including an undrawn revolving credit facility, later partially drawn for new acquisitions. Free cash flow (non-GAAP) dropped to $40.1 million, due to $112.7 million spent on acquisitions in the period. Its leverage position will materially change following major forthcoming deals, with net debt replacing net cash on the balance sheet.
The board increased Royal Gold’s quarterly dividend by 12.5%, bringing the payout to $0.45 per share. The revolver maturity was extended to 2030, and the borrowing limit was expanded to provide more flexibility for future investments.
Operational Overview: Revenue Mix and Partner Performance
Royalties, which pay a percentage of mine revenue, contributed 36.5% of total revenue. Major revenue contributors included the Mount Milligan stream ($63.7 million), Pueblo Viejo stream ($25.6 million), and Khoemacau stream ($10.2 million) (GAAP). Peñasquito and Cortez royalties also made notable revenue contributions.
Royal Gold’s portfolio is set to become broader and more diverse as the Sandstorm and Horizon acquisitions close, adding dozens of producing assets and development projects. Management highlighted the benefits of greater scale and diversification.
Some partner operations experienced challenges: Mount Milligan revised gold production guidance downward, Xavantina faced lower-than-planned output, and Mara Rosa halted processing temporarily due to severe weather. The development pipeline remains active, with projects in Ecuador and Australia advancing, and Back River completing its first gold pour at the Goose Project. These examples underline how Royal Gold relies on successful mining operations by its partners and the diversified nature of its revenue streams.
Looking across its business lines, realized gold and silver prices increased sharply from the prior year, which had an outsized effect on results. Sales volumes for the first half of CY2025 included 101,605 ounces of gold, 1.5 million ounces of silver, and 7.5 million pounds of copper.
Outlook and Guidance
We are currently forecasting that 2025 metal sales, DD&A, and effective tax rate will be within the ranges previously provided. It anticipates that sales at several properties—including Mount Milligan, Rainy River, Xavantina, and Bellevue—will be more heavily weighted toward the second half of the fiscal year. This indicates that financial results may be impacted by production changes at these partner sites through year-end 2025.
The company continues to expect the Sandstorm Gold and Horizon Copper transactions to close in the fourth quarter of 2025. As the integration process moves forward, investors should monitor leverage, free cash flow trends, and partner mine operating updates, given new risk exposures. Royal Gold remains highly sensitive to metals pricing, a factor beyond its control, and highlights the need for vigilance regarding potential reversals in commodity markets.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
