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    HSDT
    Earnings call· Jun 2026(Q2 FY26)

    Solana Q2 FY26 earnings call HSDT

    Aug 14, 2026 Source

    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

    6
    • 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

    4
    • 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

    5
    CategoryTargetConfidence
    Validator business revenue recognition
    Revenue recognition
    medium materiality
    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
    High
    Advisory pipeline conversion to revenue
    Convert pipeline to executed engagements and recognized revenue
    medium materiality
    High
    Capital allocation strategy
    Focus on enhancing SOL backing per share through buybacks
    high materiality
    High
    Validator business profitability
    Profitable
    high materiality
    Medium

    Operational metrics

    56
    Total Revenue
    $2.5 millionvs $43,000 in Q2 2025
    Q2 FY26

    Second quarter revenue was $2.5 million consisting of $2.5 million of staking revenue and $14,000 of other revenue. This compares with $43,000 in the second quarter of 2025, which did not include contributions from the staking revenue attributable to our treasury strategy.

    Staking Revenue
    $2.5 million
    Q2 FY26

    Second quarter revenue was $2.5 million consisting of $2.5 million of staking revenue and $14,000 of other revenue.

    Other Revenue
    $14,000
    Q2 FY26

    Second quarter revenue was $2.5 million consisting of $2.5 million of staking revenue and $14,000 of other revenue.

    Total Revenue
    $6.1 millionvs $92,000 in prior year period
    YTD FY26

    For the first 6 months of 2026, revenue was $6.1 million comprising of $5.9 million of staking revenue and $0.2 million of other revenue, compared with $92,000 in the prior year period.

    Staking Revenue
    $5.9 million
    YTD FY26

    For the first 6 months of 2026, revenue was $6.1 million comprising of $5.9 million of staking revenue and $0.2 million of other revenue.

    Other Revenue
    $0.2 million
    YTD FY26

    For the first 6 months of 2026, revenue was $6.1 million comprising of $5.9 million of staking revenue and $0.2 million of other revenue.

    Gross Profit
    $2.4 million
    Q2 FY26

    Cost of revenue for the second quarter was $0.1 million, resulting in gross profit of $2.4 million, a gross margin of approximately 97%.

    Gross Margin
    97%
    Q2 FY26

    Cost of revenue for the second quarter was $0.1 million, resulting in gross profit of $2.4 million, a gross margin of approximately 97%.

    Gross Profit
    $5.9 million
    YTD FY26

    For the first 6 months, cost of revenue was $0.3 million and gross margin was $5.9 million.

    General and Administrative Expenses
    $11.1 millionvs $3.3 million in Q2 2025
    Q2 FY26

    General and administrative expenses for the second quarter of 2026 were $11.1 million, compared with $3.3 million in the second quarter of 2025 and $16.3 million for the first 6 months. The increase reflects the expansion of operations associated with our digital asset treasury and infrastructure strategy, together with the $6.8 million of severance associated with the PoNS divestiture. Of the $11.1 million recorded this quarter, approximately $6.8 million relates to nonrecurring items, with the remainder being the digital asset treasury operating expense. Roughly 63,000 of that is noncash stock-based compensation.

    General and Administrative Expenses
    $16.3 million
    YTD FY26

    General and administrative expenses for the second quarter of 2026 were $11.1 million, compared with $3.3 million in the second quarter of 2025 and $16.3 million for the first 6 months.

    Unrealized Gain on Digital Assets and Receivables
    $2.4 million
    Q2 FY26

    During the quarter, we recorded an unrealized gain on digital assets and digital asset receivables of $2.4 million...

    Realized Loss on Digital Assets
    $25.4 million
    Q2 FY26

    ...a realized loss in digital assets of $25.4 million related to strategic sales executed as part of our capital allocation program...

    Unrealized Loss on Digital Asset Fund Investment
    $0.3 million
    Q2 FY26

    ...and an unrealized loss of our digital asset fund investment of $0.3 million.

    Unrealized Loss on Digital Assets and Receivables
    $86.8 million
    YTD FY26

    For the first 6 months, those figures were an unrealized loss of $86.8 million...

    Realized Loss on Digital Assets
    $32.4 million
    YTD FY26

    ...and realized loss of $32.4 million...

    Digital Asset Fund Investment Loss
    $2 million
    YTD FY26

    ...and a fund investment loss of $2 million.

    Net Operating Expenses
    $35.1 millionvs $3.3 million in prior year period
    Q2 FY26

    Net operating expenses for the second quarter were $35.1 million, compared with $3.3 million net operating in the prior year period and $138.2 million for the first 6 months of 2026.

    Net Operating Expenses
    $138.2 million
    YTD FY26

    Net operating expenses for the second quarter were $35.1 million, compared with $3.3 million net operating in the prior year period and $138.2 million for the first 6 months of 2026.

    Loss from Operations
    $32.7 millionvs $3.3 million in prior year period
    Q2 FY26

    The resulting loss from operations was $32.7 million, compared with $3.3 million in the prior year period and $132.3 million for the first 6 months.

    Loss from Operations
    $132.3 million
    YTD FY26

    The resulting loss from operations was $32.7 million, compared with $3.3 million in the prior year period and $132.3 million for the first 6 months.

    Nonoperating Income Net
    $2.4 million
    Q2 FY26

    Nonoperating income net was $2.4 million for the quarter. This includes the $3.1 million gain on the sale of the PoNS business, a change in fair value of our derivative liability of $0.3 million and other expense of $0.3 million, which relates primarily to the foreign exchange loss due to fluctuations in the Canadian to U.S. dollar exchange rates.

    Gain on Sale of PoNS Business
    $3.1 million
    Q2 FY26

    This includes the $3.1 million gain on the sale of the PoNS business...

    Change in Fair Value of Derivative Liability
    $0.3 million
    Q2 FY26

    ...a change in fair value of our derivative liability of $0.3 million...

    Other Expense (FX Loss)
    $0.3 million
    Q2 FY26

    ...and other expense of $0.3 million, which relates primarily to the foreign exchange loss due to fluctuations in the Canadian to U.S. dollar exchange rates.

    Net Loss
    $30.3 millionvs $9.8 million in Q2 2025
    Q2 FY26

    We reported a net loss for the second quarter of 2026 of $30.3 million, or $0.38 per basic and diluted common share, based on weighted average shares outstanding of 79.8 million. This compares with a net loss of $9.8 million in the second quarter of 2025.

    Net Loss Per Share
    $0.38
    Q2 FY26

    We reported a net loss for the second quarter of 2026 of $30.3 million, or $0.38 per basic and diluted common share, based on weighted average shares outstanding of 79.8 million.

    Net Loss
    $130.1 million
    YTD FY26

    For the first 6 months of 2026, our net loss was $130.1 million, or $1.66 per share, on weighted average shares of 78.3 million.

    Net Loss Per Share
    $1.66
    YTD FY26

    For the first 6 months of 2026, our net loss was $130.1 million, or $1.66 per share, on weighted average shares of 78.3 million.

    Total Assets
    $176.1 million
    as of June 30, 2026

    As of June 30, 2026, we had total assets of $176.1 million...

    Cash and Cash Equivalents
    $3.6 million
    as of June 30, 2026

    ...including $3.6 million of cash and cash equivalents...

    Current Digital Assets
    $23.3 million
    as of June 30, 2026

    ...$23.3 million of current digital assets...

    Long-Term Digital Assets and Digital Asset Exposure
    $147.3 million
    as of June 30, 2026

    ...and $147.3 million of long-term digital assets and digital asset exposure across staked positions, restricted assets, receivables and fund investments.

    Total Liabilities
    $6.4 million
    as of June 30, 2026

    Total liabilities were $6.4 million...

    Derivative Liability
    $4.2 million
    as of June 30, 2026

    ...including a derivative liability of $4.2 million...

    Total Stockholders and Mezzanine Equity
    $169.7 million
    as of June 30, 2026

    ...and total stockholders and mezzanine equity was $169.7 million.

    Share Repurchases
    $2.3 million
    Q2 FY26

    With our stock trading at a discount to net asset value during the quarter, we executed approximately $2.3 million of share repurchases, retiring 1.3 million shares...

    Share Repurchases
    $5.9 million
    YTD FY26

    ...and year-to-date repurchases now total approximately $5.9 million, as reflected in our treasury stock position... As of June 30, treasury stock stood at 5.9 million, representing 2.9 million shares at cost, compared with 3.5 million and 1.6 million shares at March 31.

    Strategic Institutional Capital Raise
    $8 million
    April 24, 2026

    On the issuance side, on April 24, we completed a strategic institutional round of approximately $8 million, led by Mirae Asset with participation from Hashkey Capital.

    Market-to-Net Asset Value (mNAV)
    0.81xup from 0.73x in Q1
    as of Q2 FY26 end

    On mNAV, at quarter end, we stood at approximately 0.81x, up from 0.73x in the first quarter.

    Total SOL Holdings
    2.3 million
    as of June 30, 2026

    As of June 30, 2026, Solana Company held approximately 2.3 million SOL across all categories, including liquid holdings, staked positions and receivables, with a fair value of approximately $170.6 million.

    Fair Value of SOL Holdings
    $170.6 million
    as of June 30, 2026

    As of June 30, 2026, Solana Company held approximately 2.3 million SOL across all categories, including liquid holdings, staked positions and receivables, with a fair value of approximately $170.6 million.

    In-the-Money Diluted Share Count
    85.4 million
    as of Q2 FY26 end

    Our in-the-money diluted share count was approximately 85.4 million shares, comprising 60.5 million common shares, 24.9 million in-the-money warrants and 21,000 RSUs.

    SOL Price Decline
    12%
    Q2 FY26

    SOL declined approximately 12% during the second quarter, following a decline of approximately 33% in the first quarter.

    SOL Price Decline
    33%
    Q1 FY26

    SOL declined approximately 12% during the second quarter, following a decline of approximately 33% in the first quarter.

    Average Net Staking Yield
    6.14%outperformance of 46 basis points vs network average
    Q2 FY26

    Over the second quarter of 2026, our average net staking yield was 6.14% APY. That compares with a network average of approximately 5.68% APY, representing outperformance of 46 basis points.

    Staking Rewards Contribution
    $2.5 million
    Q2 FY26

    Staking rewards contributed to $2.5 million, or 31,200 SOL in the second quarter.

    Third-Party Stake Commitment
    0.5 million
    July 2026

    We secured our first third-party stake commitment of around 0.5 million SOL in July and expect to report the results in the third quarter of 2026.

    Solana On-Chain Real-World Asset Market
    $3.62 billion
    end of June

    First, Solana's on-chain real-world asset market reached a new all-time high of $3.62 billion at the end of June.

    Tokenized Equities Trading Volume on Solana
    $4.8 billionup from $1.1 billion in Q1
    Q2 FY26

    Second, tokenized equities on Solana generated $4.8 billion in trading volume during the second quarter, up from $1.1 billion in the first quarter.

    Tokenized Equities Trading Volume on Solana
    $1.1 billion
    Q1 FY26

    Second, tokenized equities on Solana generated $4.8 billion in trading volume during the second quarter, up from $1.1 billion in the first quarter.

    Tokenized Equities Monthly Volume on Solana
    $670 million
    April

    Monthly volume grew from $670 million in April to $871 million in May before reaching $3.3 billion in June alone.

    Tokenized Equities Monthly Volume on Solana
    $871 million
    May

    Monthly volume grew from $670 million in April to $871 million in May before reaching $3.3 billion in June alone.

    Tokenized Equities Monthly Volume on Solana
    $3.3 billion
    June

    Monthly volume grew from $670 million in April to $871 million in May before reaching $3.3 billion in June alone.

    On-Chain Tokenized Equity Spot Volume on Solana
    97%
    as of late July 2026

    As of late July 2026, 97% of all on-chain tokenized equity spot volume to date had settled on Solana, which underscores its position as the leading infrastructure for institutional tokenized securities.

    Institutional Education Sessions and Advisory Workshops
    15
    Q2 FY26

    Our team delivered 15 institutional education sessions and advisory workshops with banks, asset managers and exchanges across Asia Pacific.

    Deals & partnerships

    4
    Not specifiedSale of cash-consuming noncore operation (PoNS medical device business).

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

    Not specifiedAcquisition 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 FoundationStrategic 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, KazakhstanPartnership 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

    4
    SOL Price VolatilityQ1 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 RestructuringQ2 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 AssetsQ2 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 DiscountQ2 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

    5

    Validator Business Revenue Recognition

    Q3 FY26
    CurrentNot yet recognized
    TargetRecognition 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.

    Q&A highlights

    5

    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 read7 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

    07

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.