EPS of $0.00 decreased by 102.3% from previous year
Gross margin of -126.3%
Net income of -35.00K
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US Global Investors Inc (0LHX.L) QQ3 2024 Results Analysis: Revenue Contraction, Margin Pressures, and a Robust Balance Sheet
Executive Summary
US Global Investors Inc (0LHX.L) reported QQ3 2024 results showing meaningful top-line contraction and a negative gross profit that culminated in a net loss for the quarter. Revenue totaled USD 2.593 million, down 28.45% YoY and 7.98% QoQ, while gross profit was negative USD 3.275 million, yielding a gross margin of -1.26%. The company recorded an operating loss of USD 0.538 million and an EBITDA of USD -0.497 million, with a net income of USD -0.035 million and basic/diluted earnings per share of USD -0.0025. These results reflect a challenging profitability environment despite a cash-rich balance sheet.
The balance sheet remains exceptionally liquid with cash and equivalents of USD 28.46 million and negligible debt, contributing to a substantial stockholders’ equity base of USD 49.846 million. Total assets stand at USD 52.772 million, while total liabilities are a modest USD 2.926 million. Despite weak quarterly profitability, the company generated negative operating cash flow of USD -0.057 million and negative free cash flow of USD -0.125 million, driven by working capital movements and capital expenditures of USD 0.068 million. The firm’s net cash position and light leverage provide strategic optionality for pursuing growth initiatives, share repurchases, or balance sheet optimization if market conditions improve.
Looking ahead, the absence of formal forward guidance in the provided data constrains a precise forecast. Management commentary (where available) would be critical to gauge expectations on AUM traction, product expansion (e.g., mutual funds, ETFs), and cost discipline. Given the small scale of current revenue and the sensitivity to market cycles, material de-risking will rely on revenue diversification, disciplined expense management, and potential accretive actions leveraging the ample liquidity.
Key Performance Indicators
Revenue
2.59M
QoQ: -7.98% | YoY:-28.45%
Gross Profit
-3.28M
-1.26% margin
QoQ: -276.45% | YoY:-238.77%
Operating Income
-538.00K
QoQ: -380.21% | YoY:-173.70%
Net Income
-35.00K
QoQ: -102.85% | YoY:-102.16%
EPS
0.00
QoQ: -102.91% | YoY:-102.27%
Revenue Trend
Margin Analysis
Key Insights
Cash & Equivalents: USD 28,460,000
Short-Term Investments: USD 10,071,000
Total Cash & Investments: USD 37,531,000
Total Current Assets: USD 40,942,000
Total Assets: USD 52,772,000
Financial Highlights
Revenue: USD 2,593,000; YoY change: -28.45%; QoQ change: -7.98%.
Gross Profit: USD -3,275,000; Gross Margin: -1.2630%.
Operating Income: USD -538,000; Operating Margin: -0.2075%.
EBITDA: USD -497,000; EBITDA Margin: -0.1917%.
Net Income: USD -35,000; Net Margin: -1.3498%.
EPS (Diluted): USD -0.0025; Weighted Avg Shares Out (diluted): 14,077,042.
Free Cash Flow: USD -125,000.
Cash Flow (Operating): USD -57,000; Capital Expenditures: USD -68,000; Investing Activities (net): USD -935,000; Financing Activities (net): USD -884,000; Net Change in Cash: USD -6,000.
Balance Sheet:
- Cash & Equivalents: USD 28,460,000
- Short-Term Investments: USD 10,071,000
- Total Cash & Investments: USD 37,531,000
- Total Current Assets: USD 40,942,000
- Total Assets: USD 52,772,000
- Total Liabilities: USD 2,926,000
- Total Stockholders’ Equity: USD 49,846,000
- Net Debt: USD -27,864,000 (net cash position)
Liquidity and Coverage:
- Current Ratio: 17.49x; Quick Ratio: 17.49x; Cash Ratio: 12.16x.
Profitability and Efficiency:
- Net Income Margin: -1.35%; Asset Turnover: -0.0613; Equity Multiplier: 1.059; Return on Equity: -0.07%; Return on Assets: -0.07%
Notes: The quarter shows a negative gross profit due to cost structure exceeding revenue; however, the company benefits from a strong liquidity cushion and minimal leverage.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
2.59M
-28.45%
-7.98%
Gross Profit
-3.28M
-238.77%
-276.45%
Operating Income
-538.00K
-173.70%
-380.21%
Net Income
-35.00K
-102.16%
-102.85%
EPS
0.00
-102.27%
-102.91%
Key Financial Ratios
currentRatio
17.49
grossProfitMargin
101.3%
operatingProfitMargin
16.6%
netProfitMargin
1.08%
returnOnAssets
-0.07%
returnOnEquity
-0.07%
debtEquityRatio
0.01
operatingCashFlowPerShare
$-0
freeCashFlowPerShare
$-0.01
dividendPayoutRatio
-906%
priceToBookRatio
0.79
priceEarningsRatio
-279.53
Net Income vs. Revenue
Expense Breakdown
Management Commentary
No earnings call transcript was provided in the dataset. Consequently, management quotes and theme-driven highlights are not available within this analysis.
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Forward Guidance
No formal forward guidance is included in the provided data. Given the environment for small-cap investment managers, potential guidance would typically cover expectations for: (1) AUM growth trajectory and fee-related revenue, (2) expense discipline and operating leverage, (3) product/channel expansion (e.g., ETFs, mutual funds, or outsourced mandates), (4) capital deployment plans (buybacks, strategic investments). Absent explicit guidance, investors should monitor: quarterly AUM inflows/outflows, remarketability of AUM, SG&A as a percentage of revenue, and any announced strategic actions (e.g., acquisitions, restructurings). The achievability of improvement hinges on revenue growth and cost control aligning with the company’s liquidity position.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
0LHX.L Focus
-1.26%
16.60%
-0.07%
-279.53%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Quantitatively, QQ3 2024 shows a materially weaker profitability profile (gross profit negative, net income negative) alongside a small revenue base, but qualitatively the company benefits from a robust liquidity foundation and negligible leverage. The primary investment thesis hinges on execution: the ability to grow AUM, diversify revenue streams, and achieve cost discipline to convert top-line stability into meaningful operating leverage. The large cash reserve provides optionality for strategic actions, including potential acquisitions, product launches, or capital returns if operating results improve. In the near term, investors should monitor quarterly AUM trends, any announced product-line expansions, and the company’s ability to convert revenue growth into improving gross and operating margins. Absent a clear growth trajectory or guidance, the investment case remains contingent on strategic actions that can unlock sustainable profitability and value creation.
Key Investment Factors
Growth Potential
Potential growth drivers include possible AUM expansion through enhanced distribution, new product offerings (e.g., index funds or specialty strategies), and geographic diversification. The company’s substantial net cash position provides optionality for strategic investments or buybacks should market conditions improve.
Profitability Risk
Key risks include continued profitability pressure due to a small revenue base and potential market-driven fee declines. The negative gross profit this quarter signals a fragile margin structure. Significant dependence on market cycles and client inflows creates revenue volatility. Minimal leverage reduces financial risk but also limits debt-funded growth options.
Financial Position
Balance sheet is exceptionally solid with USD 28.46 million in cash and nearly no debt (net debt negative USD 27.864 million). Total stockholders’ equity stands at USD 49.846 million on USD 52.772 million assets, implying a conservative capital structure and ample liquidity for potential strategic actions.
SWOT Analysis
Strengths
Strong liquidity position: Cash and equivalents of USD 28.46 million with a net cash position (net debt negative USD 27.864 million).
Low leverage: Total debt is minimal (USD 47,000), providing financial flexibility.
Healthy stockholders’ equity: USD 49.846 million against total assets of USD 52.772 million.
Diversified asset manager profile with exposure to global equity and fixed income markets.
Weaknesses
Significant profitability challenges in QQ3 2024: negative gross profit and net income for the quarter.
Heavy reliance on a small revenue base leading to high margin volatility.
No visible management-guidance in the dataset, limiting visibility into near-term strategic plans.
Opportunities
Strategic use of excess liquidity for growth initiatives, acquisitions, or accretive buybacks.
Revenue diversification through product expansion (mutual funds, ETFs) and broader distribution.
Cost optimization and SG&A discipline could lift operating margins if revenue stabilizes.
Threats
Market cycles directly impacting AUM-driven revenue and fee income.
Competition in the financial services space, including larger asset managers with scale advantages.
Regulatory and fee-compression pressures common to the asset management industry.