Upexi (UPXI) Q2 2026 Earnings Call Transcript

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DATE

Tuesday, February 10, 2026 at 5:30 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Allan Marshall
• Chief Strategy Officer — Brian Rudick
• Chief Financial Officer — Andrew Norstrud

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TAKEAWAYS

• Solana Holdings -- Upexi held approximately 2,170,000 Solana tokens as of December 31, 2025, of which 1,320,000 were liquid and 850,000 were locked.
• Cash Position -- The company had approximately $1.6 million in cash at quarter end, increasing to $9.7 million after quarter end due to capital raises.
• Revenue Growth -- Total revenue was $8.1 million for the quarter, up just over 100% from $4 million in the prior year quarter.
• Digital Asset Revenue -- For the six months ended December 31, 2025, the company generated $11.2 million in digital asset revenue, adding approximately 65,700 Solana tokens.
• Treasury Expense -- Direct treasury expenses for the six months ended December 31, 2025, totaled approximately $6 million, including management, custodial, service fees, and interest.
• Unrealized Loss -- The treasury posted an unrealized loss on digital assets of approximately $86.4 million, reflecting Solana’s price per token at $124.48 as of December 31, 2025.
• Q2 Net Loss -- Net loss for the quarter was approximately $178.9 million, or $2.94 per share, driven primarily by $164.5 million in unrealized non-cash fair value adjustments and $8.3 million in stock compensation expense.
• Capital Markets Activity -- The company completed a private placement of $19 million in common stock and warrants, an additional $7 million stock and warrants offering, and a $36 million in-kind convertible note issuance, all at a premium to fully loaded NAV.
• Token Growth -- The number of Solana tokens in the treasury increased by approximately 106,000 during the quarter, sourced from spot token purchases and partially offset by a swap from locked Solana.
• Staking Participation -- Upexi had approximately 95% of all Solana tokens staked as of December 31, 2025.
• Buyback Authorization -- A $50 million share repurchase program was announced, adding flexibility for capital management.
• Strategic Initiatives -- Management stated plans to increase yield through non-on-chain, low-risk strategies and to utilize maturing options markets for hedging positions.
• Solana ETF Inflows -- Chief Strategy Officer Brian Rudick said, "The Spot Solana ETFs launched and have seen over $850 million of net inflows since."
• On-Chain Yield Policy -- CEO Allan Marshall said, "What we do believe there's a time and a place for on-chain yields, today is not it for us." The company plans to avoid on-chain yield strategies pending regulatory clarity.

SUMMARY

Management highlighted that declining Solana prices and treasury company multiple compression materially affected quarterly performance, resulting in substantial unrealized and reported losses. Executives described recent capital raises and convertible note issuances as completed at a premium to NAV and designed to increase Solana tokens per share, supporting long-term value creation. Strategic priorities included further growth of Solana holdings, a non-on-chain yield strategy with a hurdle rate in the low-to-mid teens, and plans to opportunistically utilize expanded hedging tools as market liquidity improves.

• Executives promoted unique capital structure advantages, specifically the ability to increase Solana per share through accretive capital actions not available to ETFs or native tokens.
• Upcoming yield initiatives are expected to be "more familiar in the markets" and to avoid smart contract and liquidation risks associated with on-chain products.
• Upexi became self-eligible and filed an effective shelf statement on Form S-3, providing flexibility for future capital activities.
• Tokenized equities, new stablecoin records, and institutional partnerships were cited as evidence of advancing Solana fundamentals.

INDUSTRY GLOSSARY

• Locked Solana: Solana tokens subject to transfer or sale restrictions, often due to vesting schedules, swaps, or discounted purchase agreements.
• Staking: The process of committing tokens to support blockchain operations and security, with participants receiving yield or rewards in return.
• Spot ETF: Exchange-traded fund holding an underlying asset directly, enabling investors to gain exposure to that asset's price without holding it physically.
• In-kind Convertible Note: A convertible debt instrument settled in assets (such as digital tokens) rather than cash, often at terms linked to asset value per share.
• Net Asset Value (NAV): The total value of a company's assets minus liabilities, often used as a valuation benchmark for investment firms and funds.

Full Conference Call Transcript

Allan Marshall: Thank you, Valter, and welcome to our second quarter 2026 earnings conference call. I'm happy to review our results and discuss why, despite the difficult market backdrop, I remain extremely optimistic for the future and why we remain well-positioned to win. The market presented two key challenges for us last quarter with both declining asset prices and treasury company multiple compression. This was reflected in our quarterly results as well as in our stock price. I'll discuss each in succession. On the former, the price of Solana fell 40% during the quarter, and it has fallen a further 31% since the quarter end.

While there have been many reasons cited, including rising geopolitical risks, precious metals stealing the show, and many more, the fact of the matter is the biggest determinant of any treasury company's success has and always will be the performance of its underlying token. Thus, we are not immune, and Solana's performance had a big impact on the company. That said, I remain encouraged for three key reasons. The first is given their latency, such volatility is normal with digital assets. And Solana often exhibits large movements in both directions along a significant uptrend over time. Second, as Brian will discuss in more detail, the underlying fundamentals for Solana continue to improve as global finance moves on-chain.

Here, I'm particularly optimistic because over time, price follows fundamentals. And improving fundamentals against the falling price is a recipe for greater potential upside. Lastly, as a treasury company, we have multiple mechanisms not available to native tokens or ETFs that can create value for shareholders, like accretive issuance and discounted lock token purchases. We have in the past and aim to, in the future, increase our Solana per share to help offset any decline in token price, or to add to any increase in price in an upmarket.

So overall, between the volatility being expected, a positive view for potential Solana price appreciation, and our ability to increase Solana per share, we remain positive about the opportunity and continue to believe 2026 will be a strong year for Solana and Upexi. The second key challenge during the quarter was general multiple compression in the treasury space. We believe this was due to the law of supply and demand. With over 200 treasury companies, it's not hard to see why many are trading at discounts to net asset value. Despite this, I remain optimistic for so many reasons.

First, I believe the subsector will work through some of its oversupply, either through M&A or from treasury companies selling their digital assets to close the discounts. Secondly, I believe there are fundamental reasons why Upexi can and should trade at a premium valuation in constructive market environments. As discussed in the past, these have to do with our multiple value accrual mechanisms which have value. Third, as we have publicly stated, we are working to increase the yield that we generate on a treasury in a risk-prudent and recurring fashion. Should we be successful, we believe this would increase our multiple, which in turn would accelerate the model and differentiate Upexi from others.

Lastly, I believe we're likely to see multiple expansion in a bull market, as has been the case historically with public companies. And there are large catalysts like the potential passage of US digital asset legislation that could quickly bring this to fruition. In closing, while we have had a turbulent start to 2026, we remain positive about the future and the company has developed a strong strategic plan to, one, increase yield, two, hedge positions using maturing option markets, and lastly, capitalize on top of opportunities the volatility creates. All of these things should lead to significant growth in yield, cash flow, and stability for 2026 and beyond.

With that, I'd like to turn the call over to our Chief Strategy Officer, Brian Rudick.

Brian Rudick: Thanks, Allan, and hello, everyone. Despite the challenges during the quarter, the underlying fundamentals for both Solana and Upexi remained solid. As a brief reminder, Solana's North Star is what it calls Internet capital market, where it aims to upgrade our antiquated global financial infrastructure. Existing constructs like ACH and the credit card issuer networks were created fifty-plus years ago and are slow and expensive. While even fintech is simply a front-end wrapper on this antiquated infrastructure. But we can now use Internet and blockchain-based rails to upgrade this antiquated infrastructure for huge speed and cost savings, in addition to other benefits around transparency, composability, investor access, and many more.

Solana continued to progress throughout the quarter with increased development, adoption, and usage. The Spot Solana ETFs launched and have seen over $850 million of net inflows since. Stablecoin supply reached a new record, tokenized equities are booming. Non-native tokens like MON, STRK began trading on Solana, and the FireDancer client launched on Mainnet. And importantly, key announcements were made by various leading institutions, including Western Union, Visa, Coinbase, Revolut, Robinhood, Cauchy, and SoFi. In short, Solana demonstrated strong momentum and particularly so related to its Internet capital markets goal. The opportunity to revolutionize finance is massive, and Solana is at its very heart.

We remained active with the capital markets highlighted by the private placement of $19 million in common stock and warrants, and subsequent to quarter end, an additional $7 million common stock and warrants offering as well as a $36 million in-kind convertible note issuance. Both were done at a premium to our fully loaded NAV meaning they increased adjusted Solana per share. We also became self-eligible during the quarter and quickly filed our shelf statement on Form S-3 with the SEC which is now effective. And we announced a $50 million share repurchase program adding another important tool to manage capital.

On the visibility front, we participated in over 10 conferences and events during the quarter, including Solana Breakpoint, Maxim, Cantor, Rothschild, Roth, Clear Street, and others. These resulted in myriad presentations and panels, as well as in over 100 investor meetings where we continue to evangelize both Solana and Upexi. And we continue to appear in many news articles and podcasts throughout the quarter. Put simply, Solana is executing on its Internet capital markets road map and Upexi is adding additional value for shareholders. And with that, I'd like to turn the call over to our Chief Financial Officer, Andrew Norstrud, for a review of our financial performance.

Andrew Norstrud: Thank you, Brian. As of December 31, the company had approximately $1.6 million in cash and 2,170,000 Solana tokens. 1,320,000 of those tokens were liquid, 850,000 of those tokens were locked. For the six months ended 12/31/2025, the company had digital asset revenue of approximately $11.2 million or approximately 65,700 tokens added. We expect to increase the number of tokens we hold in our treasury each quarter and also increase the quarterly revenue from the treasury. The direct treasury expenses for the six months ended 12/31/2025 were approximately $6 million which included management fees, custodial fees, service fees, and interest.

For the six months ended 12/31/2025, the treasury had an unrealized loss on digital assets of approximately $86.4 million reflective of the Solana price per token of $124.48 at 12/31/2025. There are no comparable financial information for the prior period as the Digital Treasury was started in April 2025. The company continues to develop the digital asset treasury with a focus on maximizing the return for shareholders and had approximately 95% of all token stake at 12/31/2025. For the second quarter, total revenue was approximately $8.1 million, an increase of approximately $4 million or just over 100%, compared to $4 million in the prior year quarter.

For the six months period ended 12/31/2025, total revenue was $17.3 million compared to $8 million in the prior period. This increase reflects the addition of digital asset treasury business in 2025. The net loss for the quarter was approximately $178.9 million or approximately $2.94 per share. This loss was primarily driven by the $164.5 million of unrealized losses on digital assets reflecting non-cash quarter-end fair value adjustments as well as approximately $8.3 million of stock compensation expense. Excluding these fair value changes, the underlying treasury's performance remains strong. We increased the number of Solana tokens in our treasury during the quarter by approximately 106,000 tokens.

The increase was driven by spot token purchases partially offset by a decline in the locked Solana through a swap transaction. We continue to strengthen our balance sheet in light of the changing market environment. Due primarily to accretive equity raises previously mentioned, we currently have approximately $9.7 million of cash on hand. Management continues to focus on growing Solana's holdings on a per-share basis through disciplined capital activities, staking yield, and opportunistic purchases of discounted locked tokens, while maintaining prudent leverage and risk management. And now I'll turn it back over to Allan for concluding remarks.

Allan Marshall: Thanks, Andrew. I wanted to conclude the call by highlighting our top priorities. While we, as always, remain hyper-focused on external visibility and intelligent capital issuance, there are two key initiatives worth highlighting. The first is a continued focus on accretive growth. We aim to raise capital above NAV to increase our digital assets per share. We will continue to look for ways to raise equity capital in the most cost-effective manner available. Additionally, we will also continue to issue in-kind convertible notes at a premium to NAV. Such notes offer differentiated risk-reward for investors while significantly reducing credit risk for both parties.

Our second key focus going forward is to increase the yield on the treasury in a low-risk fashion, which we believe would enhance our valuation. If we are successful, we should trade at a sustainable premium, which itself would accelerate the capital markets flywheel. In closing, we've remained active even in a significant downtrend, completing both a capital raise and an in-kind convert both at slowly or above NAV. While this has not helped stem the downturn in this or the stock performance, we believe it will accelerate the upturn when Solana and crypto begin to recover from the current drawdown. With that, I'll turn it over to the operator for questions.

Operator: Thank you. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Brian Kinstlinger with Alliance Global Partners. Please proceed.

Brian Kinstlinger: Great. Thanks for taking my questions. Recent pressure on Solana coupled with your high conviction, is there any change in terms of your capital raising strategy? Are you more willing to raise capital at a lower premium to MNAV? To reduce your average purchase price? And then is the goal to use the ATM as much as possible to lower your cost of capital.

Allan Marshall: I'll jump in here, Brian. I don't think we've changed our perspective at all on this. We have one of the lowest costs on Solana tokens. We were able to, like we said, do two capital raises subsequent to the quarter end, with the one with Hivemind and then the cash one not too long ago, just over NAV. So we don't want to panic here and let or I shouldn't say panic, but, you know, decisions based on just daily movement. We continue to bring that cost down. We'll definitely be open to raising capital as that gap to NAV closes again, but we're still going to look to raise above NAV or at NAV as often as possible.

The ATM, obviously, is the lowest cost. Now that we have all the tools in place going forward, we'll certainly be willing to use that, but we'll also be willing to sell Solana to buy stock back if that gap gets too wide as well. Well, to that point, you've got $9.7 million of cash. How do you weigh buying Solana versus keeping a reserve? I think the one thing that this downturn has taught everybody is to keep a reserve. Right? Like, the volatility has been even I think would from the crypto neos, we would consider pretty volatile in such a short period of time, especially into what everyone considers tailwinds.

So right now, we're going to just be prudent. We do think we're getting close to washing out at the bottom here. Hopefully, it'll bounce around for a while and recover. So cash reserves are okay. What we've done is, you know, just kind of throw the balance sheet, make sure that we're set. The other thing with the whole market, and I said it in our call, is the options market and everything are getting much more liquid. So you're going to have a lot more opportunity to hedge these positions or to partially hedge these positions. We tried to do it earlier in the year.

We're just unable to get a liquid enough market to do the size we wanted. Now looking back, we wish we could have, but with all of the new kind of attention to it, all of the ETFs launching with, you know, liquidity is coming. So everything's maturing, and I think all of that's going to still bring a lot of opportunity both to raise capital again, to hedge in any movements, to sit on cash. You know, right now, we're just in general, like, playing it as close to the vest we can, but we're still looking to grow.

Brian Kinstlinger: Right. My last question is you've alluded to your high yield strategy plans. I think you had a press release a while back on that too. Any more you can share we've seen a number of DApps lend their digital coins they've generated a much higher return. I guess I'm curious is there a lower appetite or would be partners for this type of transaction given the pressure in cryptocurrency? Or are there still a number of parties that have a high degree of interest in something's imminent.

Allan Marshall: Couple things. One is, like, I want to see what how that yield like, we understand how they're looping those tokens and everything. I don't believe that creates the yield that they're talking about, so I want to see how that's I'm not sure it's presented in apples to apples, presentation. So we want to see that. However, we are currently going through the exercise to pinpoint, like, the risk-adjusted, high yield strategies we're looking for opportunities. What we do believe there's a time and a place for on-chain yields, today is not it for us. We're not willing to go on-chain. We're still waiting for that regulatory clarity. The on-chain comes with additional smart contract liquidation risks.

We don't want to enter into any of that. Like you said, with that volatility, and those yields, you know, can also compress. So what we're looking at is a more familiar and really easily understood by traditional kind of investors. We're looking at something that's more familiar in the markets. We're going to try to launch that here into the second quarter. April 4. And at that point, we'll probably give you more clarity on how we're doing that. But it's not on-chain. That's all I can tell you for now.

Brian Kinstlinger: Okay. Thank you for taking my questions.

Operator: As a reminder, it is star one on your telephone keypad if you would like to ask a question. Our next question is from Brett Knobloch with Cantor Fitzgerald. Please proceed.

Brett Knobloch: Hi, Thanks for taking my question. I might have missed this, but is there an updated Solana balance following the direct offering in the placement of the convertible notes? In the press release, it said around 2,400,000. Is that the number that we should be using?

Allan Marshall: That's the public number we have so far as it's really close. It's really close to that number. Nothing much has changed.

Brett Knobloch: Perfect. Appreciate it. And then just to maybe double click on the generating additional yield outside of staking. Can you maybe elaborate in what forms of activities you would participate in? Obviously, you said nothing on-chain, but any additional color on how or where you would generate additional yield to staking?

Allan Marshall: You know, what I'll let Brian step in here. But, yeah, what I will say is we're, you know, we will definitely collaborate on that going forward. But right now, we're trying to get it set up the way we want to get it set up. But I'll let Brian step in and elaborate a little bit there.

Brian Rudick: Yeah. Thanks, Allan, and thanks, Brett. Yeah. As Allan mentioned, we're still in the exploratory phase. We think that we've identified specifically one strategy that can generate high yield in a low-risk way. But we're waiting till we're a bit further along in that path before we reveal too many details. The one thing I'd say is, like, we've got really two key things that we're focused on. One is making sure that this is recurring. And number two, making sure that this is low risk. And so when we think about it internally, our hurdle rate is that low to mid-teens that we can get on the lock. And so we've bought locked Solana at a 15% discount.

When you think of it like OID and you put that 15% discount into the yield equivalent, we still get the 7% staking yield on that, and so it translates to an all-in, you know, low teens yield. And so that and we view that as low risk as well. So that is kind of the hurdle rate of what we're looking to do. And everything that we do will be compared against that. But we will give more information in the future as we continue to progress there.

Brett Knobloch: Perfect. Thanks, guys. Appreciate it.

Operator: There are no more further questions. I would like to turn the conference back over to Allan Marshall for closing remarks.

Allan Marshall: Well, thank everybody for joining the call. I know it's been a tough quarter for everyone in crypto. We, like I said, during the call, we do think the future is still bright. We think we're on the right path. And thank you for the great questions. And we look forward to updating you guys during the quarter, and look forward to the next conference call. Thank you very much.

Operator: The conference has now concluded. Thank you for attending today's call. You may now disconnect.

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