Upexi(UPXI) - 2026 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For the second quarter, total revenue was approximately $8.1 million, an increase of approximately $4 million or just over 100% compared to $4 million in the prior year quarter [15] - For the six months ended December 31st, 2025, total revenue was $17.3 million, compared to $8.4 million in the prior period [15] - The net loss for the quarter was approximately $178.9 million or approximately $2.94 per share, primarily driven by $164.5 million of unrealized losses on digital assets [15][16] - The company had approximately $1.6 million in cash and 2.17 million Solana tokens as of December 31st [14] Business Line Data and Key Metrics Changes - Digital asset revenue for the six months ended December 31st, 2025, was approximately $11.2 million, reflecting the addition of the digital asset Treasury business [14][15] - The Treasury had an unrealized loss on digital assets of approximately $86.4 million, reflective of the Solana price per token of $124.48 at December 31st, 2025 [14][16] - The company increased the number of Solana tokens in its Treasury during the quarter by approximately 106,000 tokens [16] Market Data and Key Metrics Changes - The price of Solana fell 40% during the quarter and has fallen a further 31% since the quarter end [4][5] - The Spot Solana ETFs launched and have seen over $850 million of net inflows since [11] Company Strategy and Development Direction - The company aims to increase yield, hedge positions using a maturing options market, and capitalize on top opportunities created by market volatility [8] - The strategic plan includes raising capital above NAV to increase digital assets per share and issuing in-kind convertible notes at a premium to NAV [18] - The company is focused on developing a high-yield strategy that is low-risk and familiar to traditional investors, with plans to launch this strategy in the second quarter [29][36] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the future despite a turbulent start to 2026, citing potential for Solana price appreciation and the ability to increase Solana per share [6][8] - The company believes that the subsector will work through oversupply through M&A or asset sales, and expects multiple expansion in a bull market [7][8] - Management emphasizes the importance of maintaining cash reserves and being prudent in capital allocation during volatile market conditions [24][25] Other Important Information - The company became shelf-eligible during the quarter and filed a shelf registration statement on Form S-3 with the SEC [12] - A $50 million share repurchase program was announced, adding another tool for capital management [12] Q&A Session Summary Question: Any change in terms of capital raising strategy given the pressure on Solana? - Management stated there has been no change in perspective and they continue to aim for raising capital above NAV [22] Question: Weighing buying SOL versus keeping a reserve? - Management emphasized the importance of maintaining cash reserves during volatile periods and being prudent with capital [24] Question: Any updates on generating additional yield outside of staking? - Management is in the exploratory phase for high-yield strategies that are low-risk and will provide more details in the future [35]