SharpLink Gaming Ltd. Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Joseph Lubin: Highlighted Ethereum's institutional adoption super cycle, including SEC initiatives, stablecoin developments, and partnerships like Swift using Linea. Emphasized Ethereum's scalability, upcoming upgrades like Fusaka, and role in AgenTek AI with ERC-8004 and X402.
• Joseph Chalom: Noted strong Q3 results with revenue up over 10x YOY and net income from Ethereum holdings. Staked nearly 100% of ETH, deployed $200 million of ETH onto Linea, and added key team members. Focused on risk-managed yield generation and Ethereum's role in tokenization of assets.
• Rob Phythian: Mentioned the affiliate marketing segment operated steadily but with reduced emphasis due to shift in management focus to ETH treasury strategy.
• Robert DeLucia: Recapped Q3 financials, including revenue increase to $10 million, SG&A expenses at $12.4 million, net income at $104.3 million, and cash on hand at $11.1 million as of September 30, 2025.

Segment Performance

• Ethereum Treasury Strategy: In the third quarter, total revenue was approximately $10.8 million, up over 10x year over year due to successful ETH staking strategy. Net income was $104.3 million, largely driven by gains in Ethereum holdings. They staked nearly 100% of their ETH and deployed $200 million of ETH onto ConsenSys's Linea layer two platform. As of September 30, 2025, the company held 580,841 ETH with a net fair value of $2.4 billion and 236,906 LSEs. Subsequent to the quarter, combined ETH holdings climbed to 861,251.
• Affiliate Marketing Business: Revenue declined to $570,000 in Q3 2025 from $882,000 in 2024. However, the consolidated net loss from continuing operations improved, with losses decreasing to approximately $800 compared to $781,000 in the same period in 2024.

Guidance

• Continues to focus on identifying best ETH deployment opportunities and ecosystem partnerships to maximize value creation.
• Aims for risk-adjusted yield through institutional-grade treasury management, with a focus on multiyear deals and maintaining custody with qualified custodians.
• No specific numerical guidance but emphasis on ongoing execution of Ethereum treasury strategy to enhance ETH per share for investors.

Risks

• Volatility: Price volatility of digital assets, particularly ETH, which can impact financial results.
• Regulatory Uncertainties: Changing regulations could affect business operations and institutional adoption of Ethereum.
• Competition: Competition from other digital asset treasuries and blockchain platforms like Solana, which may impact Ethereum's market position.

Question and Answer

Q: Devin Patrick Ryan asked about Ethereum growth, particularly Linea, and the pipeline of use cases.

A: Joseph Michael Lubin stated Ethereum has seen institutional adoption with scalability improvements, Linea's ZK EVM compatibility, and upcoming upgrades like Fusaka. Use cases include interoperability, DeFi, and AgenTek AI. Joseph Chalom added focus on risk-managed yield from partnerships like Linea.

Q: Brian David Kinstlinger inquired about AgenTek AI and Solana competition.

A: Joseph Michael Lubin discussed ERC-8004 for AgenTek AI and Ethereum's scalability surpassing Solana with composability. Joseph Chalom noted Ethereum's dominance in stablecoins and tokenized assets.

Q: Fedor Chabalin asked about multiple to NAV and December upgrade.

A: Joseph Chalom mentioned focus on ETH per share accretion and capital efficiency. Joseph Michael Lubin explained December upgrade (Fusaka) includes data availability sampling and parameter-based upgrading for scalability.

Q: Kevin Darryl Dede asked about token issuance, capital raising tools, and validator nodes.

A: Joseph Michael Lubin discussed Ethereum's low inflation (approx 0.8%) and deflationary potential. Joseph Chalom noted multiple capital raising tools like convertibles and prefs are considered, with no current plans on validator nodes.