Royal Gold (NASDAQ:RGLD) posted second-quarter 2026 results on August 6, and the numbers show a company operating at a different scale than a year ago. Revenue reached $451 million, operating cash flow hit a record $335 million, and net income landed at $236 million, gains of 115%, 119%, and 79% over the same period last year. Yet management still spent the quarter buying back shares, arguing the market has not caught up to what the portfolio is worth.
Bull Case: A Portfolio That Finally Pays For Itself
The strongest signal in the quarter is diversification. No single royalty or stream contributed more than 13% of revenue, and only two assets crossed 10%, a direct result of the 2025 acquisitions management had promised would spread out risk. Adjusted net income came to $218 million, or $2.56 per share, up 41% year-over-year, and executives pointed to gains in GEOs per share, adjusted EBITDA per share, operating cash flow per share, and EPS as proof the 2025 deals are accretive rather than dilutive.
Capital returns backed that up. Royal Gold paid $40 million in dividends at an annualized rate of $1.90 per share, 6% higher than a year earlier, and repurchased 147,000 shares for $30 million during the quarter. At the same time, the company repaid $200 million on its revolver, followed by another $75 million in July, with a further $100 million planned for mid-August, and management expects the balance fully repaid in the fourth quarter. Total available liquidity stood at $1.2 billion at quarter end.
Bear Case: The Costs Quietly Piling Up
The same quarter that produced record cash flow also produced record costs. Depreciation, depletion, and amortization expense jumped to $96 million from $31 million a year earlier, or $962 per GEO compared with $487 per GEO, driven largely by higher carrying values from the Kansanshi stream and the Sandstorm and Horizon assets picked up in 2025. General and administrative expense rose to $13.4 million for the quarter, and the company now expects full-year G&A to land near the top of its $50 million to $60 million guidance range. Interest expense climbed to $10 million from $1.5 million, a byproduct of carrying a larger revolver balance for part of the year.
Part of the headline growth was not repeatable. Royal Gold recognized $22 million of incremental revenue this quarter from an advanced delivery of 5,000 ounces tied to the Relief Canyon settlement, pulling forward 1,175 ounces originally scheduled through 2027 and concentrating them into the first half of 2026. Severe winter weather in Chile also caused temporary disruptions at both Andacollo and Caserones, though neither operator has changed full-year guidance.
What The Market Is Pricing In
Hedge fund ownership of Royal Gold climbed from 39 funds to 44 in the most recent quarter, a sign institutional conviction is building rather than fading. Short interest sits at just 4.09% of the float, which suggests little organized skepticism toward the stock. The shares trade at a forward P/E of 21.51, as of August 14, pricing in continued earnings growth rather than treating Royal Gold as a cheap, out-of-favor name.
The Question Investors Still Have To Answer
Royal Gold’s per-share metrics now show the 2025 acquisitions paying off, and the balance sheet is healing fast enough that debt could be gone by year-end. Rising depreciation, a larger G&A bill, and one-time items like the Relief Canyon advance delivery complicate how much of this quarter’s growth actually repeats. If diversification keeps widening without fresh cost surprises, the bull case gets stronger.
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