What is the expected revenue impact from the validator business in Q3?

Joseph Chee declined to provide specific numbers for Q3 revenue forecast, stating that the company expects revenue to come through and is working to build more SOL into its validators. “Fedor, I don't think we have the numbers available and probably this is not the right place to give a forecast of this sort.”

What should be expected from the capital allocation perspective for the balance of the year, especially regarding buybacks?

Cosmo Jiang reiterated the strategy of maximizing SOL per share accretion. When the stock trades at a discount to NAV, buybacks are accretive. When there's strategic interest from corporates, capital raises are pursued. The goal is always maximizing SOL per share. “At this very moment and over the last quarter, we've traded at a discount to NAV and when that happens, we are happy to buy back stock. When we do that is accretive on a SOL per share basis for the company and so we're creating value.”

How will incremental cash flow from operating businesses be deployed, specifically whether it will go into buybacks or back into the operating business?

Cosmo Jiang stated that capital allocation is a total approach, regardless of revenue source. If buybacks are the highest and best use due to trading below NAV, they will be prioritized. If buying SOL is better due to trading at a premium, that will be done. The goal is always maximizing SOL per share. “The end goal is always maximizing SOL per share, regardless of where the revenue comes from.”

HSDT

Solana Company (HSDT) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Financials· Aug 14, 2026

Source: earnings call transcript

Executive summary

Solana Company Q2 FY26 — Digital Asset Flywheel Gains Momentum

Solana Company successfully transitioned to a focused digital asset treasury and infrastructure business in Q2 FY26, divesting its legacy medical device unit and acquiring a Hong Kong trust company. The company's "flywheel" strategy, integrating advisory, validated infrastructure, and treasury, is gaining momentum with its first institutional validator cluster live in Tokyo and initial third-party stake commitments. Despite a declining SOL price and increased G&A expenses due to restructuring, the company demonstrated strong net staking yield outperformance and accretive capital allocation through share repurchases and strategic capital raises.

Highlights

First institutional validated cluster operational in Tokyo.
Secured first third-party stake commitment of ~0.5 million SOL in July.
Acquired a profitable Hong Kong regulated trust company for $2 million.
Average net staking yield of 6.14% APY, outperforming network average by 46 basis points.
Executed $2.3 million in share repurchases, retiring 1.3 million shares.
Strategic institutional round of $8 million led by Mirae Asset.

Concerns

SOL declined approximately 12% in Q2, following a 33% decline in Q1.
General and administrative expenses increased to $11.1 million in Q2 2026 from $3.3 million in Q2 2025, primarily due to $6.8 million severance from PoNS divestiture.
Realized loss in digital assets of $25.4 million related to strategic sales.
Net loss for Q2 2026 was $30.3 million, or $0.38 per basic and diluted common share.

Guidance & targets

Category	Target	Timeline	Confidence
Validator business revenue recognition	Revenue recognition medium materiality	Q3 · FY26	High
Pacific Backbone scaling and recurring revenue	Scale Pacific Backbone, build larger third-party book, recurring fee-based revenue, recognition of first validator-related rewards high materiality	Q3 · FY26	High
Advisory pipeline conversion to revenue	Convert pipeline to executed engagements and recognized revenue medium materiality	Next quarter and ongoing	High
Capital allocation strategy	Focus on enhancing SOL backing per share through buybacks high materiality	Next quarter and ongoing	High
Validator business profitability	Profitable high materiality	FY26	Medium

Deals & partnerships

Not specified Sale of cash-consuming noncore operation (PoNS medical device business).

The divestiture of the PoNS medical device business was finalized on April 8, 2026.

Not specified Acquisition of a profitable Hong Kong-based trust company to better realize the financial focus of the new operating model. $2 million

On March 17, we acquired a Hong Kong-based trust company and the transaction closed on July 15. Total consideration was $2 million in a combination of 50% payable in cash, 50% payable by stock issuance.

Jito Foundation Strategic partnership to expand institutional-grade Solana infrastructure throughout Asia-Pacific by combining Jito's market layer technology with Pacific Backbone.

In May, we announced a strategic partnership with the Jito Foundation to expand institutional-grade Solana infrastructure throughout Asia-Pacific.

Alatau City, Kazakhstan Partnership to collaborate on blockchain infrastructure, enterprise adoption, education, research and policy development.

In June, Solana Company announced a partnership with Alatau City, Kazakhstan's future-oriented city, to collaborate on blockchain infrastructure, enterprise adoption, education, research and policy development.

Risks & headwinds

SOL Price Volatility Q1 and Q2 FY26

12% decline in Q2, 33% decline in Q1

Mitigation:Disciplined capital allocation strategy focused on maximizing SOL per share, including share repurchases when trading below NAV.

Increased Operating Expenses due to Restructuring Q2 FY26

$11.1 million in Q2 2026 (vs $3.3 million in Q2 2025), including $6.8 million severance

Mitigation:Expectation for G&A expenses to decline and normalize to Q1 levels as PoNS cost basis comes out in full and cautious investment in new businesses.

Realized Losses on Digital Assets Q2 FY26 and YTD FY26

$25.4 million in Q2 FY26, $32.4 million YTD FY26

Mitigation:Part of capital allocation program, implies active management of treasury.

Market-to-NAV Discount Q2 FY26

0.81x mNAV at quarter end, up from 0.73x in Q1

Mitigation:Executing share repurchases to enhance SOL per share.

What to watch in Q3 FY26

Validator Business Revenue Recognition

Q3 FY26

Current Not yet recognized

Target Recognition of first validator-related rewards

Why it matters

This will be the first revenue stream from the new core infrastructure business, validating the "flywheel" model.

This is expected to include the recognition of our first validator-related rewards during the third quarter.

Find out whether HSDT delivers this. Inve re-checks your case every morning.

Q&A highlights

How will the Jito integration impact the revenue model for Pacific Backbone, and what's the timeline for it to become a revenue contributor?

Joseph Chee stated that the validator business is expected to be profitable this year, not a cost center, and revenue from third-party SOL stakes will start coming through. He expects more validator nodes to launch in coming quarters.

“I would think that this is actually going to be profitable for this year.”

asked by Fedor Shabalin · answered by Choon Wee Chee

2 min read 7 chapters

Detailed narrative

Strategic Transformation and Flywheel Model

Solana Company completed its strategic transformation in Q2 FY26, divesting the cash-consuming PoNS medical device business and acquiring a profitable Hong Kong regulated trust company. This shift solidifies its focus on a digital asset treasury and infrastructure strategy, centered around a "flywheel" model of advisory, validated infrastructure, and treasury, designed to strengthen each other and diversify revenue sources.

Institutional Adoption of Solana

The Solana Network saw accelerated growth in institutional adoption, with on-chain real-world asset market reaching $3.62 billion and tokenized equities generating $4.8 billion in trading volume in Q2. Solana Company positions itself as a trusted partner for institutions in the Asia Pacific region, building the necessary infrastructure and advisory services to facilitate this adoption.

Pacific Backbone and Third-Party Staking

The company's first institutional validated cluster, "Pacific Backbone," became operational in Tokyo in early July, with 3 machines running. It secured its first third-party stake commitment of approximately 0.5 million SOL in July, demonstrating the demand for institutional-grade, compliant infrastructure. The company is pursuing ISO 27001 and SOC 2 certification to further differentiate its offering.

Advisory Services and Pipeline Development

Advisory services are generating a pipeline of durable recurring relationships, with 15 institutional education sessions and workshops delivered across Asia Pacific. The company is in negotiations for its first advisory engagement, which is expected to contribute meaningfully to revenue and serve as a demand generation engine for infrastructure services.

Capital Allocation and Shareholder Value

Despite a decline in SOL price, the company maintained a disciplined capital allocation strategy focused on maximizing SOL per share. This included $2.3 million in share repurchases (1.3 million shares retired) when trading at a discount to NAV, and an $8 million strategic institutional capital raise led by Mirae Asset, reflecting strong institutional conviction.

Team and Board Strengthening

Solana Company strengthened its leadership and governance with key additions. Madelene Gani joined as CFO and COO, Teddy Hung as Head of Business Development and Advisory, and Michel Lee and Sergio Mello were appointed to the Board of Directors, bringing extensive Web3 and traditional finance experience.

Strategic Partnerships

The company formed strategic partnerships with Jito Foundation to expand institutional-grade Solana infrastructure in Asia-Pacific, and with Alatau City, Kazakhstan, to collaborate on blockchain infrastructure, enterprise adoption, and policy development. These partnerships are expected to contribute to treasury yield and open doors for broader engagement.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.