Royal Gold — Second Quarter 2026 Earnings Summary

Financial Performance

• Total revenue reached $450.5 million for the quarter, a 114.9% increase from $209.6 million in the prior year period; year-to-date revenue was $919.7 million, up 128.2% from $403.1 million.
• Net income was $236.4 million ($2.78 per share), compared to $132.3 million ($2.01 per share) in the prior year; adjusted net income was $218.2 million ($2.56 per share) versus $118.8 million ($1.81 per share).
• Operating cash flow hit a record $335.2 million, up from $152.8 million in the prior year; free cash flow (operating cash flow less acquisitions and equity calls) was $215.1 million.
• Adjusted EBITDA margin was 83%, down slightly from 84% in the prior year period.
• Revenue composition was 76% gold, 12% silver, and 8% copper; sales volume was 100,000 GEOs, up 56.5% from 63,900 in the prior year.
• Cost of sales increased to $60.1 million from $24.2 million, driven by higher metal prices and new revenue streams.
• Depreciation, depletion, and amortization (DD&A) increased to $96.2 million from $31.2 million.
• Income tax expense was $58.2 million, resulting in an effective tax rate of 19.7% compared to 7.4% in the prior year.

Guidance and Future Outlook

• Performance through June 30, 2026, is forecast to be within the ranges provided for total sales, DD&A, and effective tax rate.
• Copper and other metals sales are trending to be around or above the top end of the respective guidance ranges.
• Management expects to repay the outstanding revolving credit facility balance from future cash flow in the fourth quarter of 2026, assuming current metal prices and no further acquisitions.
• The final $50 million of conditional Warintza funding is expected to be paid in the third or fourth quarter of 2026, subject to security filings in Ecuador.

Business Segments and Product Lines

• North America: Revenue was $250.4 million; key contributors included Mount Milligan, Pueblo Viejo, and Cortez.
• South and Central America: Revenue was $99.5 million; Andacollo and Antamina were significant drivers.
• EMEA: Revenue was $85.4 million; Kansanshi, Khoemacau, and Wassa contributed to growth.
• Australia Pacific: Revenue was $15.3 million; Bellevue and South Laverton were primary sources.
• Hod Maden: Restructured ownership to a 15% direct equity interest in Artmin and a new 2.5% NSR royalty; funded $70 million in project costs.
• Warintza: Advanced $50 million following EIA approval and PFS publication; remaining $50 million conditional on security filings.
• Relief Canyon: Settled fixed delivery obligations by selling 5,000 ounces of gold and receiving 2,652,532 shares of Americas Gold and Silver Corporation.

Market and Competitive Landscape

• Average realized metal prices for the quarter were $4,506/oz for gold, $73.15/oz for silver, and $6.05/lb for copper, representing significant year-over-year increases.
• Operators such as Newmont, Centerra, Teck, and Vale provided updates on production volumes and guidance, generally aligning with Royal Gold's expectations or indicating growth.
• The company maintains a large and diversified portfolio of streams and royalties in mining-friendly jurisdictions.

Risks and Challenges

• Forward-looking statements note risks including changes in metal prices, operator performance variations, permitting delays, and operational disruptions.
• Specific risks include the timing of metal deliveries, contractual issues, and the success of development projects like Hod Maden and Warintza.
• External factors such as environmental hazards, labor disputes, and geopolitical risks in foreign jurisdictions are cited as potential impacts.

Management Commentary and Tone

• President and CEO Bill Heissenbuttel described results as "strong" and highlighted progress on executing priorities with a "disciplined approach to capital allocation."
• Management expressed a positive outlook for the second half of the year, citing a solid first half driven by a large and diversified portfolio.
• The tone emphasized maintaining discipline and a long-term focus while considering accretive capital deployment opportunities.

Analyst Questions and Answers

• No specific analyst questions and answers are included in the provided press release text.

Other Key Points

• Debt Repayment: Repaid $200 million on the revolving credit facility during the quarter; subsequent to quarter-end, an additional $75 million was repaid, leaving $325 million outstanding.
• Share Repurchase: Repurchased 147,205 shares at an average price of $203.80 for a total of $30 million under a $500 million program; shares were cancelled.
• Dividend: Paid a quarterly dividend of $0.475 per share, a 6% increase over the prior year.
• Liquidity: Total liquidity increased to approximately $1.2 billion, comprising $243.8 million in working capital and $1.0 billion undrawn under the credit facility.
• Credit Facility: Added a $600 million uncommitted accordion feature to the $1.4 billion revolving credit facility, increasing potential aggregate commitments to $2.0 billion.
• M&A/Investments: Advanced $50 million to Solaris Resources; funded $70 million for Hod Maden; acquired stream and royalty interests totaling $50 million in cash calls.
• Equity Method Investment: Recorded a $21.9 million gain on fair value changes in equity securities, primarily related to Entrée Resources Ltd. shares from the Sandstorm and Horizon acquisition.