Forward Industries, Inc. Q3 FY2026 earnings call

• Core Solana Treasury Strategy Execution

  • Forward executed its third full quarter of the Solana-focused treasury strategy launched September 2025. As of June 30, 2026, the firm held 7.6 million SOL tokens and equivalents, growing to 7.8 million SOL by August 3, 2026. SOL per share (fully diluted) grew from 0.0669 at March 31 to 0.073 at June 30, a 9% quarterly gain equal to 36% annualized growth.
  • The firm accumulated 508,000 SOL during Q3 at an average cost of $79 per token, and added a further 254,000 SOL in the first month of Q4 at an average cost of $75 per token. 99% of SOL holdings are staked with Forward's top-10 validator (1.8% of total network stake), generating cumulative staking rewards of 307,000 SOL since strategy launch.
  • Disciplined share management: 2.5 million shares were repurchased, 94,000 shares issued via the accretive at-the-market (ATM) program, resulting in a net 1.7 million reduction in fully diluted shares (from 105.2 million to 103.5 million). Fully diluted mNAV was 0.908 as of quarter-end.

• Milestones and Ecosystem Growth

  • Forward was added to the Russell 2000 and Russell 3000 indices in the Q3 2026 reconstitution, which management expects to broaden the shareholder base, improve trading liquidity, and increase institutional and retail visibility.
  • The Solana ecosystem delivered strong fundamental growth in the quarter: 3.8 billion transactions in June 2026, 167 million unique token holder addresses (all-time high), $3.3 billion in tokenized real-world assets (RWA) (up from $2.5 billion at quarter start), and 40% of total Web3 application revenue ($257 million in Q3), the ninth consecutive quarter Solana outearned all other blockchains.

• Strategic Diversification and M&A

  • Forward made its first ecosystem investment: a minority stake in OnRe, plus a $25 million liquidity commitment to OnRe's ONyc RWA token. Since the investment, OnRe's AUM grew 73% to $247 million by quarter-end. This investment generates uncorrelated 12% net dollar-denominated yield, which offsets dollar-denominated operating costs and strengthens the Solana ecosystem.
  • Management intends to lead consolidation of the digital asset treasury sector, where many firms trade at persistent discounts to net asset value. Forward, as the largest Solana-focused treasury (larger than the next three competitors combined), will pursue accretive M&A of both Solana and non-Solana digital asset treasuries, converting acquired assets to SOL to grow SOL per share and scale the treasury. All transactions must meet the requirement of being accretive to SOL per share.

• Cost and Balance Sheet Management

  • SG&A expense for the quarter was $7.4 million ($4.3 million excluding $3.1 million in stock-based compensation). Management is on track to maintain average quarterly non-stock-based SG&A of $4.8 million going forward, with a deliberate lean operating structure to maximize capital compounded in the treasury.
  • Total debt outstanding was $105 million via the Galaxy facility with a 2.6% average weighted interest rate, resulting in mid-to-high teens leverage that management describes as modest and manageable. The firm ended the quarter with $11.0 million in cash, and has sufficient liquidity across cash, credit capacity, and the ATM program to execute strategy through market volatility.

• Regulatory Update

  • The U.S. Digital Asset Market Clarity Act advanced through the Senate Banking Committee and is scheduled for a cloture vote September 15, 2026. The legislation would allocate jurisdiction over digital commodity spot markets to the CFTC and retain SEC oversight over digital securities, which management expects to provide needed regulatory clarity for U.S. digital asset development. Forward is not dependent on passage of the bill and already operates with sufficient regulatory confidence. The SEC and CFTC have also made incremental progress harmonizing regulatory rules for public digital asset firms.

Forward Industries operates two core activity segments for the fiscal Q3 2026 (ended June 30, 2026): 1) Core SOL Treasury: This segment generated 99% of total quarterly revenue, contributing $10.69 million of the $10.8 million total quarterly revenue. The carrying value of SOL and SOL equivalent holdings as of quarter-end was $556.9 million, with total digital treasury assets reaching $576.6 million. 2) Solana Ecosystem Investments: This new segment contributed $110,000 (1% of total quarterly revenue) from dollar-denominated yield on a minority stake and liquidity provision in OnRe, a Solana-based tokenized reinsurance platform. Total GAAP revenue for the quarter was $10.8 million, up from $2.5 million in the prior year period. Gross margin for the quarter was 62.2%, an improvement from negative 24.9% in the prior year period.

• Management reaffirmed its core long-term strategy of growing SOL per share on a risk-adjusted basis, deploying capital with discipline, and deepening Forward's position in the Solana ecosystem for the back half of 2026
• Management confirmed it remains on track to maintain an average quarterly SG&A expense (excluding stock-based compensation) of $4.8 million on a go-forward basis
• Management is actively pursuing M&A opportunities and potential additional RWA ecosystem investments, and notes there is a chance one or more transactions could be announced before the end of 2026, though no commitments are made
• No changes to long-term leverage targets; management will maintain deliberate, modest leverage to retain balance sheet flexibility to accumulate SOL during market dislocations and pursue strategic opportunities

• Forward-looking statements regarding treasury growth, investment returns, M&A, regulatory outcomes, and Solana ecosystem growth are subject to known and unknown risks that could cause actual results to differ materially from projections, as detailed in the firm's SEC filings
• Digital asset prices remain volatile, and Solana's token price has decoupled from improving network fundamentals, declining more than 50% year-over-year as of Q3 2026; there is no guarantee the market will recognize improving fundamentals in the near term
• Direct investments in emerging sectors like agentic finance and RWA protocols are speculative; no guarantee high-conviction investment opportunities will materialize or deliver expected uncorrelated returns
• Regulatory clarity for digital assets in the U.S. remains incomplete, and the Digital Asset Market Clarity Act requires a 60-vote supermajority to pass, with no guarantee of passage
• Industry consolidation depends on willingness of target firm shareholders to agree to combinations; there is no guarantee accretive M&A opportunities will be completed on expected terms

Q: How is the emerging agentic finance sector developing on Solana, and how will Forward participate in its growth? / A: Solana already has core infrastructure for agentic payments via two live protocols, x402 (built by Coinbase) and the Machine Payments Protocol (built by Stripe), with Visa already having integrated MPP on Solana. Agentic trading terminals are already launching and active on the network today. Forward will indirectly gain from agentic activity via MEV rewards captured by its staked SOL, but has not made any direct investments in the sector, which remains extremely speculative, and is still evaluating opportunities.

Q: How does Forward balance growing core SOL holdings with building recurring dollar revenue streams, and what ecosystem areas will be the next contributors? / A: Forward is focused on RWA protocols like the OnRe reinsurance platform as the primary route to building recurring uncorrelated dollar revenue. With Forward's average cost of capital at just 2.6%, it can deploy into high single-digit to low double-digit yield RWA opportunities, capturing a positive spread that covers SG&A and interest expenses. Management will look for additional opportunities across reinsurance, credit, and royalties that combine minority equity upside and liquidity provision to support ecosystem growth while delivering stable dollar cash flow.

Q: Why is there a disconnect between Solana's strong growing network usage and its 50%+ year-over-year price decline, and what could close this gap? / A: The price decoupling from strong fundamentals is a market dislocation driven by broader macro forces impacting the entire crypto ecosystem, not Solana-specific fundamentals. This dislocation creates an attractive opportunity for Forward to continue accumulating SOL at lower average prices. While no catalyst is guaranteed, upcoming network changes to improve value accrual to SOL could act as a near to medium-term catalyst, and management expects the market will eventually align price with improving fundamentals.

Q: How much of the $25 million committed OnRe liquidity is deployed, and will we see upsized OnRe or similar RWA investments by end of 2026? / A: Approximately $20 million of the $25 million committed liquidity has been deployed as of quarter-end, plus an additional minority equity stake in the OnRe entity. The OnRe investment delivers a 12% net uncorrelated yield (tied to reinsurance risk, not crypto prices) that is highly accretive. Forward has a robust pipeline of similar RWA and minority investment opportunities, and there is a chance one or more could be announced before year-end, though nothing is ready for public disclosure at this time.