Upexi (UPXI) Q4 2026 Earnings Call Transcript

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DATE

Thursday, Sept. 17, 2026 at 5:30 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer - Allan Marshall
• Chief Financial Officer - Andrew Norstrud
• Chief Strategy Officer - Brian Rudick
• Managing Director of KCSA Strategic Communications - Valter Pinto

TAKEAWAYS

• Total Revenue -- $25.0 million for the fiscal year, up from $15.8 million in the prior year.
• Digital Asset Revenue -- $17.4 million, primarily reflecting staking income generated from the company's Solana treasury.
• Net Loss -- $246.1 million for the fiscal year, driven largely by $195.1 million in unrealized losses on digital assets.
• Solana Holdings -- 2.34 million tokens as of June 30, 2026, representing a cost basis of approximately $360.3 million.
• Average Cost per Token -- $154 per SOL, reflecting the weighted average price of acquisitions for the digital asset treasury.
• Staking Participation -- 95% of total Solana holdings, which management utilized to earn approximately 135,000 additional tokens during the fiscal year.
• Headcount Reduction -- 10 full-time employees, down from 59 a year ago due to an efficiency initiative that outsourced manufacturing and logistics.
• Cash Balance -- $5.8 million as of June 30, 2026, representing a 65% increase from the prior quarter end.
• Debt Extinguishment -- $20 million in debt retired during June, resulting in a gain on extinguishment of approximately $10.3 million.
• Credit Facility Interest Rate -- 7.5%, down from 11.5% following a refinancing completed subsequent to the fiscal year end.
• General and Administrative Expenses -- $26.4 million, up from $11.9 million in the prior year reflecting the build-out of the treasury strategy.
• Stock-Based Compensation -- $21.9 million for the fiscal year, compared to $2.4 million in fiscal year 2025.
• Interest Expense -- $13.6 million, an increase from $1.2 million due to short-term and convertible debt used to expand the treasury.
• Share Repurchases -- 2.9 million shares, bought at an average weighted price of $0.96 per share for a total of $2.8 million.
• Working Capital -- $45.6 million as of June 30, 2026, providing liquidity for ongoing operations.
• ATM Proceeds -- $2.5 million in gross proceeds from the issuance of 2.5 million shares subsequent to the end of the fiscal year.
• Realized Losses -- $11.7 million on digital assets during the year, primarily from the conversion of tokens to cash.
• Consumer Brand Revenue -- $7.6 million, reflecting a decline from $14.8 million in the prior year as the company shifted its focus.
• Total Assets -- $180.1 million as of June 30, 2026, compared to $123.8 million at the end of the previous fiscal year.
• Stockholders' Equity -- negative $53.8 million, down from positive $90.1 million due to the impact of unrealized losses on the digital asset portfolio.

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RISKS

• Marshall stated, "the crypto market has not been what we hoped for," noting that Solana generally trended lower during a subdued market environment in the fourth quarter.
• Norstrud noted that the year-over-year change in stockholders' equity primarily reflects the "impact of the unrealized losses on our digital asset treasury" and other changes associated with the strategy.

SUMMARY

Upexi, Inc. (NASDAQ:UPXI) completed a transition of its business model during the fiscal year, establishing a treasury strategy focused on the Solana blockchain. Management reported that the company restructured its operations to lower fixed costs, including a substantial reduction in internal headcount and the outsourcing of manufacturing and warehousing. The company also executed several capital markets transactions to strengthen its balance sheet, including debt retirement and the refinancing of its credit facility at lower interest rates. Management indicated that it intends to grow its token holdings on a per-share basis through staking yields and the opportunistic purchase of discounted tokens.

• Allan Marshall noted that the company embarked on its treasury strategy in April 2025 "as it became apparent that the U.S. administration and its agencies were turning from a headwind to a tailwind for digital assets."
• Chief Strategy Officer Brian Rudick described Solana as being "uniquely positioned as the first second-generation smart contract blockchain" due to its technology and network effects.
• Management expects that staking revenue will exceed ongoing cash operating expenses starting in the current quarter ending Sept. 30, 2026.
• The company's partnership with Hivemind is intended to provide greater access to the Asian market and expand the company's global footprint.
• Rudick indicated that Solana currently maintains a "97% market share" of trading volume for tokenized equities, which grew to over $420 million during the year.
• Management stated that the company will continue to use its at-the-market program to raise capital when it is accretive to the net asset value of the treasury.

INDUSTRY GLOSSARY

• At-the-Market (ATM) Program: A method for publicly traded companies to sell shares into the secondary market at prevailing market prices to raise capital over time.
• In-kind Convertible Note: A debt instrument that can be converted into an asset, such as a cryptocurrency, rather than being repaid in cash.
• Solana (SOL): A high-performance blockchain platform designed for decentralized applications and smart contracts, utilizing a proof-of-stake consensus mechanism.
• Staking: The process of locking up digital assets to support the operation and security of a blockchain network in exchange for rewards or yield.
• Tokenization: The process of converting rights to an asset into a digital token on a blockchain.
• Validator: A participant in a proof-of-stake blockchain responsible for processing transactions and maintaining the integrity of the network.

Full Conference Call Transcript

Operator: Good day, and welcome to the Upexi Fiscal Fourth Quarter 2026 Financial Results Conference Call. Please note, this event is being recorded. I would now like to turn the conference over to Valter Pinto, Managing Director of KCSA Strategic Communications. Please go ahead.

Valter Pinto: Thank you, operator. Good evening, and welcome, everyone, to the Upexi Fiscal Fourth Quarter and Full Year 2026 Financial Results Conference Call. I'm joined today by Allan Marshall, Chief Executive Officer; Andrew Norstrud, Chief Financial Officer; and Brian Rudick, Chief Strategy Officer. Before we begin, I'm going to remind everyone that statements made during today's conference call may be deemed forward-looking statements within the meaning of the safe harbor of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially due to a variety of risks, uncertainties and other factors.

For a detailed discussion of some of the ongoing risks and uncertainties in the company's business, I'll refer you to the press release issued this evening and filed with the SEC on Form 8-K as well as the company's reports filed periodically with the SEC. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless otherwise required by law. In addition, during the course of the call, we may refer to non-GAAP financial measures that are not prepared in accordance with accounting principles generally accepted in the United States, and they may be different from non-GAAP financial measures used by other companies.

The reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures are contained in our earnings release issued this evening, unless otherwise noted. I'd now like to turn the call over to Upexi's CEO, Allan Marshall.

Allan Marshall: Thank you, Valter, and welcome, everyone, to our fiscal fourth quarter 2026 earnings conference call. Our fiscal quarter ending June 30, 2026, marks not only the end of our fiscal year, but also the 1-year anniversary of our Solana treasury strategy. As such, I wanted to start with a brief review. We first embarked on our Solana treasury strategy in April 2025 as it became apparent that the U.S. administration and its agencies were turning from a headwind to a tailwind for digital assets. To bootstrap the strategy, we completed what we believe to be the first large-scale equity raise for an altcoin treasury, raising $100 million and kickstarting the digital asset treasury company trend in the U.S.

We followed with a second highly accretive raise in July 2025, taking in an additional $200 million and including, we believe, the first in-kind convertible note, again, demonstrating our innovation within the capital markets. Turning to the quarter, April, May and June were characterized by a subdued market environment for digital assets and though volatile, Solana generally trended lower throughout the quarter. During this bear market, we focused on what we could control. Management worked to fortify the balance sheet with debt reductions and increasing capital on hand using our ATM. Secondly, we dramatically reduced expenses and streamlined our business to create a very predictable expense profile.

On the balance sheet front, we spent the quarter focused on a number of initiatives to strengthen our financial position. We used some of the ATM proceeds to increase our cash position, which totaled $5.8 million as of June 30, up 65% from the prior quarter end. Separately, in June, we extinguished roughly $20 million in debt. And subsequent to quarter end, we refinanced our existing credit facility, moving the interest rate from 11.5% to 7.5% and reducing the amount of collateral required for the line. All in, we are in a much stronger position and ready for any market environment that may come.

On expense management, we successfully completed our efficiency initiative, which included outsourcing our manufacturing, warehousing and logistics operations and reducing full-time employees from 59 a year ago to just 10 today. As previously guided, we expect these efforts to show up in the current quarter ending September 30 and specifically for our staking revenue to more than cover our ongoing cash expenses on a go-forward basis. Before concluding, I want to express the fact that this is just our first year. And while the crypto market has not been what we hoped for, we believe it's still in the early innings. The market will turn up again.

And when the bull market returns, which it will, the opportunities to create value will be abundant and the premiums will return. The work we have done this year will amplify the capitalization of those as we execute upon them. With that, I'd like to turn the call over to our Chief Strategy Officer, Brian Rudick.

Brian Rudick: Thanks, Allan, and hello, everyone. Allan covered our strategic priorities and progress at the company, and I will provide an update on Solana. After all, the main determinant of the success of any treasury company will be the performance of its underlying token. Put simply, Solana remains incredibly well positioned. As a brief review, Solana is a high-performance blockchain and is uniquely positioned as the first second-generation smart contract blockchain. This gives Solana both best-in-class technology from having come later than early generation blockchains and deep network effects with a plethora of users, developers and applications.

While one may think of Solana and smart contract blockchains as a new computing paradigm, Solana is hyper-focused on internet capital markets, where it aims to provide a single liquidity venue for all the world's assets accessible to anyone, anywhere, anytime with just a simple internet connection. Personally, I like to think of this as reimagining our antiquated global financial infrastructure, which were quite literally built 50-plus years ago, with internet and blockchain-based rails for massive speed and cost advantages and through items like stablecoins, tokenization and AI agents. And with top performance and distribution, Solana is in the catbird seat to lead this revolution. Metrics agree and show that Solana is winning.

Key statistics from last quarter include a 48% increase in stablecoin supply over the prior year, tokenized equities growing to over $420 million from virtually 0 a year ago and with trading volume of over $5 billion, amounting to a 97% market share, the cheapest median transaction fee of any chain at just $0.04, a 53% market share of all blockchain transactions and strong spot ETF inflows compared to large outflows for others. A big reason for Solana's success and a pivotal factor for the future is Solana's growth with institutions. After all, institutions are likely the fastest way to onboard the masses given their billions of customers, built-in trust, billions of dollars of capital and leading developers.

Notable corporate announcements during the quarter were numerous and occurred in various areas from key players like in payments and stablecoins from SoFi, Western Union, MoneyGram and Mastercard, in tokenization and capital markets from State Street, Amundi, Securitize and Ondo and in infrastructure from Google Cloud, Amazon Web Services, Moody's and Allfunds. It's early innings, but institutions are reimagining our antiquated financial infrastructure with Solana as the rails, and we are on our way towards internet capital markets. As that continues, Solana and Upexi are well positioned to benefit. And with that, I'll 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 June 30, 2026, the company had approximately $5.8 million in cash, $165.3 million in Solana and $180.1 million in total assets and $45.6 million in working capital. Turning to the treasury. As of June 30, 2026, the company had approximately 2.34 million Solana tokens, having a cost basis of approximately $360.3 million, equating to an average cost per token of $154 and approximately 95% of these tokens were staked. For the year ended June 30, 2026, the treasury had approximately $17.4 million in digital asset revenues or approximately earned 135,000 Solana tokens. There was $195.1 million in unrealized losses and $11.7 million in realized losses.

For the year ended June 30, 2026, general and administrative expenses were $26.4 million compared to $11.9 million in the prior year. The increase reflects the build-out of the treasury strategy includes $7 million increase in employee compensation, a $4 million increase in public company expenses, a $1.5 million increase in digital asset treasury fees, a $1.2 million increase in legal fees and a $1.1 million increase in travel. Stock-based compensation was approximately $21.9 million compared to $2.4 million in the prior year. Interest expense was $13.6 million compared to $1.2 million in the prior year. The increase reflects the increase in short-term and convertible debt obtained to increase the company's treasury.

The company has recently negotiated a lower interest rate on the short-term debt to reduce the interest expense. There is a gain on extinguishment of debt of approximately $10.3 million. This reflects the debt reduction on the -- on an acquisition loan and the partial repayment of a convertible debt in the company stock. Net loss for the fiscal year was $246.1 million or $3.87 per share compared to a net loss of $13.7 million or $1.73 per share in fiscal year 2025. The loss was driven primarily by $195.1 million of unrealized losses on digital assets, $11.7 million of realized losses on digital assets and $21.9 million of stock compensation.

During the year, we repurchased approximately 2.9 million shares of common stock at an average weighted price of $0.96 per share for total consideration of approximately $2.8 million under the $50 million repurchase program of our Board authorized in November of 2025. Subsequent to year-end, we issued approximately 2.5 million shares under the at-the-market program for gross proceeds of approximately $2.5 million. Total stockholders' equity was negative $53.8 million at June 30, 2026, against positive equity of $90.1 million a year ago. The year-over-year change in stockholders' equity primarily reflects the impact of the unrealized losses on our digital asset treasury and other changes associated with the execution of our treasury strategy.

Management continues to focus on growing Solana Holdings on a per share basis through disciplined capital activities, staking yield and opportunistic purchase 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 close the call by reiterating the progress we have made despite the difficult market environment for crypto. The improvements to our balance sheet and the material reduction to our expenses leave us in a position to capitalize on the inevitable upturn. The company results will improve materially when this happens and all the groundwork we did will be amplified with material improvement in the Solana price. With that, I'll turn it over to the operator for questions.

Operator: [Operator Instructions] Our first question is from Brian Kinstlinger with Alliance Global Partners.

Brian Kinstlinger: Two questions. My first one is, I'm curious if you can discuss the progress and/or ways you can maximize yield and some of the avenues you're exploring to achieve your goals? And then what are your top priorities for Upexi in the current fiscal year? And then I'll ask my second question.

Allan Marshall: Brian, do you want to take that one? Do you want me to take it? This is Allan Marshall.

Brian Rudick: Sure. Happy to. Yes, Brian, thanks for the call. I'd say that we slow-played this a bit. We looked at several different opportunities. First, one was quite attractive from both a risk and return perspective. Recall, we have a quite high bar. We want to make sure it's very low risk, and we want to make sure that it can be recurring and also something that investors understand. What I'd say is some of the opportunities that we were looking at got less attractive during the quarter. And we think that as the crypto market comes back, a lot of those opportunities will improve as well, and we could become much more active there.

So not a ton to report there, but we're still actively looking, and that is something that we do want to do.

Brian Kinstlinger: Great. My second question is, could you explain with the stock price well below the strike price for the converts, why is management choosing to calculate NAV as though these will convert as it seems like they won't, you're trading at 1.4x. And so capital raising would be accretive to SOL per share. I'd love to hear your thought process on those converts.

Allan Marshall: Sure. Brian, it's Allan Marshall. I mean, I think we spoke about this in the past. I mean, you're speculating on SOL price and asking us to do that. And we just -- I just don't think we're in a position to do that. I mean, in July of 2025 within 150 days, SOL went from $234 to $82. So I mean, we have 281 days assuming we don't either extend them or find a way to convert them like we did with the Hivemind deal. So anything we do would have a speculation in it. So we reported this.

We know what the dates are and to assume that they're not going to convert in 281 days when SOL, like I said, went from $234 to $82 in 150 days, it is an assumption I'm not willing to make. I mean, we did this transaction, assuming they would convert. And if SOL were back at $200, they would convert. So I guess we could do percentagewise on what we think it is, but it will be speculation. So this is -- we're just being consistent with how we reported it. Like Danny said, we have -- we report on our website.

We think we'll be able to either create value with these converts, find a way to convert them, Solana could go above a level that would make them convert. So you're making one assumption that it's not going to convert, and I just don't know how we could make that -- responsibly make that same, I guess, speculation. If I was good at speculating, I would have sold on my Solana at $234 and bought it back at $82.

Brian Rudick: Yes. Brian, one thing I would add is if you take the embedded option in our in-kind notes and you run it through any sort of options pricing model like Black-Scholes, that delta is actually still quite high. It's because like the vol on our stock is extremely high, like we would trade with the beta to SOL and SOL is quite volatile, as you know. So that suggests that there's actually still a really, really darn high chance that they do end up converting. And I think like that volatility is often overlooked. So I wanted to mention that as well.

Allan Marshall: And just not to go further, but you saw we did the Hivemind deal, we converted early. So even if somehow, we had to possibly reprice them if it was close or something, so maybe there would be some additional dilution. We just can't do -- you can't do a 0. We can't do any all-or-nothing kind of transaction. So like speculating just -- it's just hard for us right now.

Operator: Our next question is from Gareth Gacetta with Cantor Fitzgerald.

Gareth Gacetta: I wanted to touch on the June private placement. It looks like you were able to retire just under $20 million of principal for around $10 million at the time. So a pretty meaningful discount to face value. I'm wondering how we should think about the capital allocation framework going forward. And maybe if you think that something like you just did would be repeatable or then how you would weigh that versus the buyback program?

Allan Marshall: On a more general -- it's Allan Marshall. Thanks for the question. On a more general level, I think what we've been able to do over the process of building this treasury or starting the treasury and then being the first to create these in-kind notes, then finding a way to get a deal done with Hivemind to make it beneficial for both sides. I think what I would take from that is just our creativity and our awareness that these are things we have to accomplish this year.

So our process there is like how do we find creative ways to create value, whether it's another deal like Hivemind, whether it's we go back to the investors and sweeten the deal to extend the duration, whether we -- there are plenty of negotiating points, which could benefit both the investor, ourselves and the shareholder. And we're very aware that we need to at least start considering those and possibly execute on them. We'll go back to like the volatility. It's not unreasonable that we could wake up in June of next year and SOL will be $250.

So we just -- we don't want to do something too early to create a situation where we give too much back or I don't think that's the way to really look at it, but that's our thought on that. And so we continue to -- when we decide to raise money on the ATM, the closer it is to NAV, above NAV, we still think -- actually, so we look at it a little differently this year than we did last year. Like everybody was raising as much money at NAV, put it to work. And it turns out that all of that is kind of incorrect in a certain way.

I mean, correct at the moment in time, but when SOL goes from $234 to $65, everything you bought is upside down where you think you'd want to raise as much money as you can if you still believe in the story at $65. Unfortunately, that's -- we all know that's not how the markets work. So we're trying to blend that. The ATM, we're trying to be creative. We are going to look to continue to raise capital in a way that we think is accretive in the scenario where SOL goes back to both where it's been and maybe to a new high.

Gareth Gacetta: Great. That's super helpful. And then maybe just touching on the Blueprint delegation. So it appears that Blueprint is under the umbrella of Hivemind. So I'm just wondering, was that maybe a portion of the deal or what it took to get the deal through? And could you maybe clarify how much of the treasury you're going to shift over to Blueprint?

Allan Marshall: Not sure I understand the question...

Andrew Norstrud: You're talking about the validator with Blueprint. And we're not shifting any more or less. We are partnering with them. They partnered with us in the past. We also have a few other validators that are primary ones that give us very good rates. We get back most of the staking and block rewards, everything else. So that's kind of how we look at it. We don't just favor one, but without looking at the economics of all of them.

Allan Marshall: Yes, and let me just put, yes, so the Blueprint deal was a deal that Hivemind, Matt and their team and I have been working on for a year. So it wasn't really connected. It was just like if we're going to deepen our partnership, we wanted to -- after that, you're like, hey, we can maybe increase the rewards side. So that's the way we look at that as well.

Gareth Gacetta: That makes sense. And I was actually looking into it. It looks like they have a pretty unique platform in general, just from like an asset management perspective. So maybe could you just touch on like how you see that platform and the uniqueness of it?

Allan Marshall: Yes. Some of the things that we -- are you talking about -- so the relationship with Hivemind we're looking to expand into other -- we think the U.S. market is a great market, but they have more access on their platform to enter the Asian market. So for us, for Upexi, that partnership was how do we expand our footprint outside of that, and they're great, making a deal with them hopefully would lead to making a deal with other investors in that area of the world. And I'm not -- I'll let Andy jump in, in case the question was more about the validator.

Andrew Norstrud: Yes, just with the dashboard and everything else. One of the things that we did with this partnership before they even had a Solana validator. That's kind of why we're putting this partnership together prior to the conversion, prior to even actually the deal being done on the convertible. So it's been a process. We work together very well, and we'll continue to try to expand that as we go forward in many different ways.

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

Allan Marshall: Thank you, everybody, for joining the call today. Thanks for the questions. Like I said, I'll just reiterate again, we're looking forward into 2027. We think there's a significant bull market coming. We think we'll be able to execute on those strategies. And I'll close that with thank you again for everyone and look forward to talking to you and listening to you on the next call.

Operator: Thank you. This will conclude today's conference. You may disconnect at this time and thank you for your participation.

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