ETHZilla Corporation (FRMM) Earnings

Management highlights

- Strategic Value Creation Initiatives • Executed an aggressive share repurchase program after an April 2026 announcement, buying back ~5.8 million shares for $24.9 million (representing ~28% of outstanding shares). All repurchased shares were retired, leaving ~14.5 million shares outstanding as of April 30, 2026. Management views share repurchases at current valuations as highly accretive and a reflection of conviction in the company's intrinsic value. The board has maintained program flexibility for opportunistic repurchases under current market conditions. • The board formed an independent special committee to conduct a formal strategic review of all available value creation alternatives, including engaging with parties that have already approached the company, with the goal of maximizing shareholder value. Management reaffirmed confidence in the standalone business model and long-term opportunity for tokenized real-world assets, and the review is intended to ensure the full value of the company's platform is recognized by the market. - Business Line Expansion • Entered the AI infrastructure financing space, focusing on short-term bridge loans to finance the acquisition and deployment of NVIDIA GPUs between hardware purchase and the closing of long-term operational financing. The company targets mid-teen annualized returns on these short-duration loans, which generate yield from day one independent of tokenization, with a path to future tokenization of a portion of each deal. The opportunity is viewed as scalable and repeatable given rapid growth in AI infrastructure demand. • Made significant progress in establishing strategic co-investment partnerships with large institutional investment firms, focused on the new AI infrastructure financing and existing commercial aircraft engine leasing verticals. These partnerships will enable Forum to earn origination and asset management fees by sourcing and managing assets for third-party institutional capital, allowing the company to scale beyond its own balance sheet. - Distribution Model Development • The company is building a dual complementary distribution model: retail access via tokenized products, and institutional access via co-investment and white-label agreements on existing institutional platforms. Liquidity.io, the company's token trading platform, is undergoing a major upgrade that will expand its product offering to include trading of stocks, bonds, cryptocurrency, and private credit securities alongside tokenized assets. The upgraded platform is expected to launch in late Q2 or early Q3 2026, and is expected to grow the platform's user base, expand the buyer pool for Forum's tokenized assets, and enable scaled token distribution. - Balance Sheet and Capital Allocation • As of April 30, 2026, total assets (excluding prepaid/accrued items) were ~$170.5 million, with cash and cash equivalents of $62.5 million, and net asset value per share of $9.93. Capital allocation priorities are: deploying capital into high-quality cash-generating real-world assets, expanding platform origination and distribution capabilities, and maintaining balance sheet flexibility.

Guidance

- Management revised full year 2026 guidance downward to reflect the capital allocated to share repurchases after the prior guidance was set. - Expected assets under management for full year 2026 is now $100 million to $175 million, down from the prior guidance range of $125 million to $200 million. - Expected full year 2026 revenue is now $18 million to $22 million, down from the prior guidance range of $18 million to $26 million. The lower range reflects slower near-term capital deployment to asset origination due to share repurchase activity, while still capturing expected yield and origination income from the existing asset base. - Management confirmed this is expected to be the last quarter with large mark-to-market adjustments from legacy digital asset positions, as the company's revenue mix continues to shift toward real-world asset income.

Segment performance

For Q1 2026, Forum Markets generated total revenue of $2.9 million, up from $2.4 million in Q4 2025. Staking revenue contributed $1.8 million, representing 62.1% of total Q1 revenue. Commercial aircraft engine leasing revenue contributed $1.1 million, representing 37.9% of total Q1 revenue. Selling, general, and administrative expenses were $7.5 million. Net loss for the quarter was $77.5 million, driven primarily by realized and mark-to-market losses on legacy digital asset positions; adjusted EBITDA loss was $76 million. As of April 30, 2026, the company's asset base (net of depreciation/liabilities) was: $17.6 million in aircraft engine assets (12.2% of net asset value), $1.8 million in auto loans and warehouse facilities (1.2%), $14.8 million in manufactured home loans (10.2%), $2 million net ETH collateral position (1.4%), and $45.8 million in aggregate equity positions in strategic partners (31.7%). Total net asset value was $144.5 million as of April 30, 2026.

Risks & headwinds

No explicit discussion of material operational failures or new unforeseen risks was included in the call. The standard forward-looking statement disclaimer notes that actual results could differ materially from management projections, and investors should refer to recent SEC filings for a full discussion of risk factors.

Analyst Q&A

• Q: What has customer feedback been on live token products, which business segments do you expect to see the most material growth over the next two years, how do you balance share repurchases below NAV versus deploying capital for yield, and what underpins your confidence in GPU bridge loan takeout commitments? /

  A: Management says institutional investors currently prefer direct traditional investment structures, while retail investors are the primary focus for tokenized assets, as tokenization enables fractional access for smaller retail investors. They expect the most token growth from aircraft engine assets (which offer unique tax benefits for direct investors), AI infrastructure finance, and mortgages/auto loans. Management says they strike a deliberate balance between repurchases and yield deployment, and the revised guidance directly reflects capital allocated to buybacks. For GPU bridge loans, underwriting focuses on well-capitalized counterparties, offtake contracts with hyperscalers that are included in the collateral package, and pre-arranged long-term takeout financing from USDAI and other market players.