Solana Company Q2 FY2026 earnings call

Strategic Transition and Core Flywheel Strategy

• Management is executing a three-pillar flywheel strategy (treasury, institutional validator infrastructure, advisory) focused on serving Asia Pacific institutional demand for Solana-based digital asset services, where each segment reinforces the others to increase SOL per share.
• Completed full exit from the cash-consuming legacy PoNS medical device business to focus exclusively on digital asset operations, and closed the acquisition of a regulated Hong Kong trust company for $2 million (50% cash, 50% stock) to provide a licensed regional counterparty for institutional clients.

Key Operational Milestones

• Launched the first institutional Pacific Backbone validator cluster in Tokyo in early July 2026, with 3 redundant nodes for testing and compliance; secured the first third-party institutional stake commitment of ~0.5 million SOL ahead of full commercial operation.
• Established two strategic partnerships to expand market reach: a collaboration with Jito Foundation to integrate Jito's market layer technology and deliver high-performance institutional staking solutions across APAC, and a partnership with Alatau City, Kazakhstan to develop blockchain infrastructure, drive enterprise adoption, and engage on policy development.
• Expanded the leadership team and Board of Directors to support growth: added Teddy Hung (ex-Boston Consulting Group, JPMorgan) as Head of Business Development and Advisory, and appointed two new independent directors with deep Asian crypto and capital markets expertise (Michel Lee of Cybertech Partners/Hashkey Group, Sergio Mello of Anchorage Digital).

Treasury and Capital Markets Activity

• SOL price declined 12% in Q2 2026 following a 33% drop in Q1, but management maintained its strategy of accretive capital allocation to grow SOL per share. The company achieved 6.14% net staking APY, outperforming the network average, with all staking rewards automatically compounded.
• Executed $2.3 million in share repurchases (retiring 1.3 million shares) as the stock traded at a discount to net asset value (NAV); year-to-date repurchases total $5.9 million. Completed a $8 million strategic institutional financing round led by Mirae Asset with participation from Hashkey Capital, reflecting institutional confidence in the company's APAC-focused strategy.
• As of quarter-end, the company traded at 0.81x modified NAV, up from 0.73x in Q1 2026.

Ecosystem Growth Context

• Solana's on-chain real-world asset market reached an all-time high of $3.62 billion at the end of Q2 2026, with 5 of 30 globally systemically important banks announcing Solana-based partnerships. Tokenized equity trading volume on Solana hit $4.8 billion in Q2 (up from $1.1 billion in Q1), representing 97% of all global on-chain tokenized equity spot volume as of late July 2026, confirming Solana's leading position for institutional tokenized securities.

Solana Company reports its core business results for Q2 2026: 1. Digital Asset Treasury: Total staking revenue was $2.5 million, representing 100% of total Q2 2026 revenue (other revenue contributed only $14,000, less than 1% of total revenue). As of June 30, 2026, the company held 2.3 million SOL with a total fair value of $170.6 million. Average net staking yield for the quarter was 6.14% APY, outperforming the Solana Network average of 5.68% APY by 46 basis points. 2. Advisory Services: No material revenue generated in Q2 2026, as the business was still building its institutional client pipeline. The segment delivered 15 educational and advisory workshops across Asia Pacific and is in late-stage negotiations for its first paid engagement, with revenue expected to begin later in 2026. 3. Validator Infrastructure (Pacific Backbone): No revenue reported in Q2 2026, as the first Tokyo institutional cluster launched in early July 2026 after quarter-end. The company secured its first third-party stake commitment of ~0.5 million SOL in July 2026, with first validator revenue expected to be recognized in Q3 2026. 4. Legacy Medical Device Business: Fully divested in April 2026, removed as an operating segment. A $3.1 million gain on the sale of this business was recorded in Q2 2026, alongside $6.8 million in non-recurring severance costs related to the exit. Overall Q2 2026 total company revenue was $2.5 million, with a gross profit of $2.4 million (97% gross margin) and a net loss of $30.3 million ($0.38 per diluted share).

• General and administrative (G&A) expenses are expected to decline and normalize back to Q1 2026 levels after the full removal of non-recurring costs related to the legacy medical device divestiture, while the company continues cautious, disciplined investment in the new validator and advisory lines.
• First revenue from the Pacific Backbone validator business will be recognized in Q3 2026, and management expects the validator business to be profitable by the end of 2026.
• The advisory segment is expected to begin contributing meaningful revenue in 2026, as the current pipeline of client engagements is converted to signed contracts.
• The company will maintain its core capital allocation strategy of maximizing SOL per share: while shares trade at a discount to NAV, it will continue prioritizing accretive share repurchases; if shares trade at a premium, it will allocate capital to additional SOL accumulation. The company will continue to pursue strategic institutional financings with large Asia-Pacific financial partners when accretive.
• Additional APAC validator nodes will be launched gradually over the course of 2026 as favorable market and demand conditions arise.
• Long-term platform development of the AI-powered orchestration and compliance stack will continue throughout fiscal 2026, with operational impact building incrementally on a multi-year trajectory.

• Actual results may differ materially from forward-looking statements due to general market volatility in digital asset prices, which impacts the fair value of the company's SOL treasury holdings and overall market demand for institutional digital asset services.
• The company is in the early stages of building its new advisory and validator business lines, and there is no guarantee that current client pipelines will convert to revenue-generating engagements, or that the validator business will achieve profitability as expected.
• Regulatory uncertainty for digital asset and blockchain services across Asia Pacific and global jurisdictions creates compliance risk that could delay or prevent business expansion.
• Competition in the institutional Solana infrastructure and treasury space is increasing, and the company may not be able to maintain its yield outperformance or differentiated positioning against other providers.

Q: Asked about the revenue model for Pacific Backbone after integrating Jito technology, and the timeline for moving from a cost center to profitable revenue generation. / A: The revenue model aligns with standard industry arrangements for Jito partner validators, focused on optimizing performance to deliver above-market yields. The business is not expected to operate as a sustained cost center: the company already secured third-party stake immediately after launch, and revenue will be reported starting in Q3 2026. Management expects the validator business to be profitable by the end of 2026, with additional new validator node launches expected in coming quarters. /

Q: Asked about near-term capital allocation priorities for the balance of 2026, given accretive share buybacks executed in Q2 2026 while the stock trades below NAV. / A: The core priority remains maximizing SOL per share accretion in all market conditions. While the stock trades at a discount to NAV, the company will continue executing accretive share buybacks. The company also continues to welcome strategic investments from large Asia-Pacific institutional partners when transactions are accretive for existing shareholders, and will adjust capital market activity inline with broader market conditions. /

Q: Asked how the company will deploy future cash flow from operating businesses: whether it will prioritize additional share buybacks (while below NAV) or reinvestment into operating growth. / A: The company uses a total portfolio approach to capital allocation, regardless of the source of cash flow. After covering required expenses for ongoing business growth, any excess capital will be allocated to the highest-value use for shareholders: if the stock remains below NAV, excess capital will go to buybacks; if the stock trades at a premium, excess capital will go to purchasing additional SOL, all to maximize SOL per share. /

Q: Asked whether Solana Company plans to act as a consolidator of other Solana digital asset treasury (DAT) companies trading at deeper discounts, and if consolidation is an attractive path to grow SOL per share. / A: There are a limited number of Solana DATs in the market, and consolidation opportunities exist that could deliver accretive gains for shareholders. Any potential combination requires alignment on terms, timing, and management synergies, which requires extensive work to execute. The company is open to any transaction that maximizes shareholder value, but no specific deals are disclosed.