SharpLink Gaming Ltd. Q2 FY2025 earnings call

Mission and Vision: To become the world's largest and most trusted Ethereum treasury company, aligning with Ethereum's growth and macro trends. Ethereum Treasury Strategy: Focus on accumulating and activating ETH through native staking, liquid staking, and DeFi participation in a risk-managed manner, leveraging institutional-grade experience and Consensys partnership. Affiliate Marketing: Current focus on performance-based acquisition in iGaming, with exploration of blockchain integration for future growth. Financial Results: Q2 2025 revenue was $0.7 million, gross profit $0.2 million, SG&A expenses $2.3 million, and net loss $103.4 million, with ETH treasury strategy activity starting mid-quarter.

Ethereum Treasury Strategy: As of June 30, 2025, the company held 24,704 ETH with a net value of $61.5 million and 164,731 LsETH (liquid staked ETH) with a net value of $382.4 million after an impairment of $87.8 million. Affiliate Marketing: Focused on performance-based customer acquisition for sports books and online casinos, with a dual approach of a flagship affiliate network (PAS.net) and state-specific direct-to-player websites, contributing to revenue but with limited activity in the quarter due to the new Ethereum treasury strategy launch.

Long-term Accumulation: Continued aggressive accumulation of ETH. Capital Raising: Exploration of equity-linked securities and other capital-raising structures to increase ETH concentration. Yield Generation: Focus on activating ETH through native staking, liquid staking, and DeFi to generate yield while maintaining risk management.

Accounting Complexities: Impairment of LsETH due to accounting rules for digital intangible assets. Market Volatility: Fluctuations in ETH value affecting asset valuations. Regulatory Uncertainties: Potential regulatory changes impacting digital asset operations and investments.

Q: Congrats on the launch and progress on strategy to date. I want to dig in on activating ETH to drive incremental yield beyond staking. How are you focused near term and evolving long term, and what yield pickup expected?

A: Joseph Chalom mentioned focusing on native staking, liquid staking, and DeFi yields in a risk-managed way, aiming for institutional-grade risk-return continuum with Consensys expertise.

Q: You have a valuation opportunity for ETH of $15,000 to $40,000 by 2028. How do you think about ETH valuation and adoption needed?

A: Joseph Lubin stated Ethereum is at mainstream moment with scalability, affordability, and legislative support, expecting applications to sit on decentralized rails driving ETH value.

Q: Away from ETH treasury strategy, are there other things you're working on to broaden value use of ETH ecosystem?

A: Joseph Chalom mentioned exploring additional revenue-generating opportunities synergistic with current strategy, leveraging Consensys partnership.

Q: Comparing to MicroStrategy, how does yield generation form different treasury accumulation approach?

A: Joseph Chalom noted SharpLink has yield generation capability in addition to capital appreciation, compounding yields as an added benefit.

Q: Key developments to ensure Ethereum sustains lead?

A: Joseph Lubin and Chalom discussed scalability improvements, composability across Layer 2 and 1, hard forks for performance, and institutional adoption driving network value.

Q: Approach to debt and capital-raising structures?

A: Joseph Chalom mentioned focus on common equity raised so far, exploring equity-linked securities and preferred securities for future capital raises.

Q: Major infrastructure gaps for world moving on chain?

A: Joseph Lubin discussed usability improvements, AI integration for digital twin agents to make DeFi more understandable.

Q: Running validator nodes and back-office operations?

A: Joseph Chalom stated use of delegated staking through leading custodians, focusing on risk-managed, best-in-class operations.

Q: Approach to day-to-day buying of ETH?

A: Joseph Chalom indicated focus on accumulating ETH early in the adoption cycle as part of the long-term ETH opportunity thesis