DeFi Technologies Inc. Q1 FY2026 earnings call

• Business Resilience and Balance Sheet Strength

  • Despite challenging Q1 2026 digital asset market conditions with crypto prices hitting cycle lows, DeFi Technologies generated $11.2 million in total revenue and $4.9 million in positive net income
  • Ended the quarter with $101 million in total cash and stablecoins (USDT/USDC), $23.5 million in treasury holdings, and a $29.1 million valued venture and private portfolio; positive working capital of $47.3 million, a significant improvement from year-end 2025
  • Maintained strong cost discipline, with Q1 operating expenses of $9.7 million, remaining cash positive through the market downturn

• Product and Distribution Expansion

  • Valor now has 103 listed products across global exchanges, with continued cross-listing expansion in new markets including London and Brazil; leveraged bull/bear ETPs launched in late 2025 continue to roll out
  • Expanded global distribution onboarding across Europe, Latin America, and Asia; established a local capital markets team in Brazil following Q1 2026 launch, and already outperformed initial competitor turnover targets
  • Appointed Jakob Lindbergh as new Chief Revenue Officer to expand distribution, deepen institutional relationships, and accelerate global revenue growth

• Strategic Growth Initiatives

  • Prioritizing development of institutional-focused product structures including UCITS ICAV funds, hedge funds, actively managed certificates, and volatility-targeted asset-backed ETPs to meet strong global institutional demand; the first institutional allocation closed in Q1, with a second tranche expected in Q2
  • Built out internal business intelligence infrastructure, including the daily-updated DEFTEVOLURE Investment Opportunity Index (DVIO) to improve product targeting and identify institutional demand trends, which already supported closing two institutional ETP investments
  • Restructured the venture portfolio to increase shareholder value, and is developing an in-house proprietary digital asset custody technology stack, planned for internal use by Q3 2026 with a public release targeted later in 2026
  • Repurposed global insights events into the DeFi Technologies Capital Market Series, with the first institutional investor event scheduled for June 2026 in London at the Canadian Embassy

1. Valor ETP Platform: Generated total company revenue of $11.2 million for Q1 2026, with an average AUM of $533 million and end-of-quarter AUM of $427 million. The platform held 102 ETPs and structured products at quarter-end, with effective management fee yield of 1% (down from 1.2% in the prior period) and effective staking yield of 2.5% (down from full-year 2025's 5.2%). Total 3.5% of AUM was monetized in the quarter. Valor contributes ~74% of total Q1 revenue based on total company revenue of $11.2 million. 2. Stillman Digital: Generated $2.9 million in Q1 2026 revenue, representing a 38% year-over-year increase from $2.1 million in Q1 2025. Stillman contributes ~26% of total Q1 company revenue.

• Maintained existing guidance for Stillman Digital, projecting 15% to 20% year-over-year revenue growth in 2026, which would bring full-year 2026 revenue to $11.5 million to $12 million; Stillman is currently on track to meet or exceed this target after 30% year-over-year growth in Q1
• Management reaffirmed that the company remains positioned to achieve full-year profitability in fiscal 2026, as Q1 was profitable even at the bear market low
• Management set a conservative full-year 2026 monetization rate target of 4.5% for total AUM, down from 5.2% in full-year 2025, due to the Q1 market downturn and increased Bitcoin/ Ethereum AUM weighting
• Management has not issued formal consolidated full-year company guidance at this time, pending greater visibility on the launch and adoption of new institutional fund structures which are expected to drive meaningful future revenue growth
• Management expects significant revenue contribution from new institutional products in the second half of 2026, with material income growth expected to begin by Q3 2026 at the latest

• Challenging macroeconomic and digital asset market conditions in Q1 2026 drove a decline in AUM, reduced altcoin valuations that lowered overall staking and management fee yields, and increased Bitcoin/ Ethereum AUM weighting which carries lower margins
• Share price is currently below the $1 Nasdaq minimum listing requirement, creating investor uncertainty over potential delisting; while management notes there is no immediate delisting risk, a reverse share split may be required if the share price does not recover
• Staking yields and total monetization are heavily dependent on crypto market conditions and altcoin valuations, with staking levels declining during periods of high market volatility due to unbonding periods and hedging requirements
• The ongoing investigation into alleged share price manipulation remains in the discovery process, with potential future legal uncertainty that cannot be disclosed publicly due to attorney-client privilege rules

Q: What is the risk of Nasdaq delisting, and do you plan to conduct share buybacks? / A: Management states there is no material risk of delisting. The company has approximately a full year to regain compliance via 180-day compliance period plus an additional 180-day extension if needed. A reverse split will only be implemented if required, and data shows reverse splits do not hurt performance for healthy non-distressed firms like DeFi Technologies. Share buybacks are only an opportunistic option for the future; current cash is prioritized for growth initiatives, and buybacks are not tied to Nasdaq compliance.

Q: How much of AUM can eventually be deployed into staking and lending, and why did staking yields decline in Q1? / A: The Q1 staking yield decline was driven by market conditions: falling altcoin prices increased Bitcoin/Ethereum's share of AUM, which carry lower staking yields, while high volatility led to temporary unstaking for hedging purposes. 59% of AUM was staked in Q1; in normal market conditions management expects 70% staking, with a theoretical maximum of 80% in ideal market environments, and staking levels are already rising as market volatility eases.

Q: What is the minimum level of cash needed to operate the business through 2026 and 2027, with $100+ million in current cash holdings? / A: The company needs $25 million to $40 million in cash for in-house market making, which is strategically important to maintain tight order book spreads that outperform competitors. Additional cash is reserved for seeding new institutional funds to accelerate launch timelines, and for potential strategic acquisitions in a consolidating bear market, where DeFi Technologies' strong balance sheet gives it competitive opportunity to acquire attractive assets at favorable valuations.

Q: When can the market expect revenue growth from new institutional products, and what is the incremental impact of AUM growth on the bottom line? / A: Significant revenue contribution from new institutional products is expected in the second half of 2026, with the first new funds carrying a 1.5% management fee plus 15% performance fee structure, creating an uncorrelated third revenue stream. The business has very high operating leverage, with relatively fixed costs; existing infrastructure can support hundreds of millions in additional AUM without meaningful cost increases, so roughly 90% of incremental revenue from new AUM flows directly to the bottom line.