Franco-Nevada Q2 2025 slides: record results as gold price surge boosts margins

Introduction & Market Context

Franco-Nevada Corporation (NYSE:FNV) presented its second quarter 2025 results on August 11, highlighting record financial performance driven primarily by a substantial increase in gold prices. The gold-focused royalty and streaming company benefited from a 40.2% year-over-year increase in gold prices, which reached $3,279 per ounce in Q2 2025 compared to $2,338 per ounce in the same period last year.

Despite the strong results, Franco-Nevada’s stock showed weakness in premarket trading, down 1.78% to $168.54, continuing a pattern similar to what occurred following its Q1 2025 results when the stock initially declined despite exceeding analyst expectations.

The company’s presentation highlighted how commodity price changes affected its business, with precious metals showing significant gains while energy commodities experienced declines.

Quarterly Performance Highlights

Franco-Nevada reported exceptional financial results for Q2 2025, with substantial growth across all key metrics. Revenue increased by 42.0% to $369.4 million, while Adjusted EBITDA surged by 64.8% to $365.7 million compared to the same period in 2024. Most impressively, net income more than tripled, rising 210.8% to $247.1 million.

The company’s Gold Equivalent Ounces (GEOs) sold increased by 1.7% to 112,093 ounces, demonstrating that while volume growth was modest, the significant increase in commodity prices, particularly gold, drove the substantial financial improvements.

The following slide from the presentation highlights these record results, showing the remarkable year-over-year improvements across all key financial metrics:

Franco-Nevada’s adjusted EBITDA margin expanded to an impressive 99.0%, representing a 16.1% increase from Q2 2024. This near-perfect margin reflects the company’s royalty and streaming business model, which requires minimal operational costs while capturing the upside of rising commodity prices.

The company’s performance metrics showed consistent improvement over the past five quarters, with GEO margins steadily expanding as illustrated in the following chart:

Detailed Financial Analysis

Franco-Nevada’s revenue diversification remains a key strength of its business model. The company’s Q2 2025 revenue was well-distributed across different commodities, geographies, assets, and asset types, providing stability and reducing dependency on any single source.

The following chart illustrates how Franco-Nevada’s revenue is diversified across these categories:

The company’s financial performance in Q2 2025 continues the strong momentum seen in Q1, when Franco-Nevada reported a 43% year-over-year increase in revenue and a 49% increase in adjusted EBITDA. The Q2 results show even stronger margin improvement, with adjusted EBITDA margin expanding to 99.0% compared to the 87.4% reported in Q1 2025.

Adjusted net income per share increased by 65.3% to $1.24, while net income per share rose by 121.2% to $1.28. These results significantly outpaced the 1.7% increase in GEOs sold, demonstrating the substantial leverage Franco-Nevada’s business model provides to rising commodity prices.

Strategic Initiatives & Available Capital

Franco-Nevada maintains a strong financial position with approximately $1.61 billion in available capital as of June 30, 2025. This includes a $1 billion corporate revolver and $450 million in marketable securities. The company has allocated $250 million for the Arthur Gold Project acquisition, leaving approximately $1.36 billion in available capital for future investments.

The following slide details the company’s capital position and ongoing cash generation:

The company continues to generate substantial cash from operations, ranging from $275 million to $325 million per quarter. This strong cash flow, combined with the available capital, positions Franco-Nevada well for future acquisitions and investments in the mining sector.

The presentation was delivered by President and CEO Paul Brink and CFO Sandip Rana, who have overseen the company during this period of exceptional growth and margin expansion.

Forward-Looking Statements

While Franco-Nevada’s Q2 2025 results demonstrate exceptional performance, investors should note that the company’s results are heavily influenced by commodity prices, particularly gold. The 40.2% increase in gold prices was the primary driver of the company’s financial improvements, rather than significant volume growth.

The company’s continued success will depend on maintaining its operational efficiency and effectively deploying its substantial available capital. With $1.36 billion available for investments after the Arthur Gold Project acquisition, Franco-Nevada is well-positioned to continue expanding its portfolio of royalty and streaming assets.

The company’s ability to maintain its near-perfect margins while growing its asset base will be crucial for sustaining its performance, especially if commodity prices stabilize or decline from their current elevated levels. However, Franco-Nevada’s diversified revenue streams and low-cost business model provide significant protection against potential market volatility.

Based on the presentation and recent performance, Franco-Nevada appears well-positioned to continue delivering strong results, supported by its efficient business model, substantial available capital, and ongoing cash generation from operations.

Full presentation:

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