Verb Technology Q3 2026 Earnings Results & Report

Verb Technology EPS Results

• Actual EPS: -$0.40
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Verb Technology Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Verb Technology (NASDAQ:TONX) developed interactive, video-based sales and marketing software designed to help businesses engage customers and manage digital commerce activities. Its technology included sales-enablement and customer relationship management tools, as well as video presentation and livestreaming capabilities.

The company’s best-known platform was MARKET.live, a livestream social-shopping marketplace that connected brands, retailers, creators and consumers. The platform was designed to support product demonstrations, interactive broadcasts and purchases across digital and social-commerce channels. Verb also offered related software products under the Verb brand, including tools for customer engagement, sales communication and live video commerce.

Verb Technology served businesses and consumers primarily through internet-based platforms, with operations focused on the U.S. market and digital commerce opportunities more broadly. Rory J. Cutaia founded the company and served as its chief executive officer. The company has also pursued strategic changes to its business direction and corporate identity, so its current operations may differ from its earlier software and social-commerce focus.

Verb Technology Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: TON Strategy earned approximately 9.4 million Gram from staking in Q3, maintaining an annualized gross yield of about 16%. About 99% of its Gram holdings were staked, and Gram per common share rose 9% from year-end 2025 to 4.24.
• Positive Sentiment: Operating expenses fell 39% sequentially to $8.4 million, helping operating income from continuing operations improve to $4.0 million from about $0.5 million in Q2. Management expects remaining costs from discontinued VERB operations to be no more than $150,000 in 2027, absent unforeseen expenses.
• Negative Sentiment: Q3 included a $27.2 million loss from changes in the fair value of Gram holdings, compared with an $82.8 million gain in Q2; net loss from continuing operations before taxes was $22.9 million. Gram’s reported fair value declined to $348.5 million from $369.5 million during the quarter.
• Positive Sentiment: Telegram began a limited rollout of its native, self-custodial Gram wallet, with features including contact-to-contact transfers and sponsored fees for some transactions. Management views this as a potential adoption catalyst, but said investors should watch sustained usage, transaction activity, and demand for Gram rather than wallet activations alone.
• Neutral Sentiment: The company repurchased about 1.8 million shares for $5.7 million in Q3 and said further buybacks remain an option. Management emphasized that repurchases must be weighed against preserving dollar liquidity and the staking productivity of its Gram treasury.

Presentation

[Operator]

Good morning, and welcome to TON Strategy Company's third quarter 2026 earnings conference call. Joining us today are Chief Executive Officer Kevin Wilson and Chief Financial Officer and Chief Operating Officer Sarah Olsen. Earlier today, the company issued a press release reporting financial results for the quarter ended September 30th, 2026. The release is available through the Investors section of the company's website. Following prepared remarks, management will address selected questions submitted in advance by shareholders. Before we begin, I would like to remind everyone that today's call includes forward-looking statements within the meaning of the federal securities laws. These statements are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements.

[Operator]

Please refer to the company's filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31st, 2025, for discussion of these risks and uncertainties. The company undertakes no obligation to update any forward-looking statements except as required by law. Today's remarks may also refer to non-GAAP financial measures and supplemental measures that are not defined under GAAP, and the required reconciliations and explanations of these measures are included in the earnings release. I will now turn the call over to Kevin Wilson. Please go ahead.

[Kevin Wilson, CEO at TON Strategy Company]

Thank you, operator, and good morning, everyone. On our Q2 call in August, we outlined TON Strategy's next phase in three words: own, advance, and compound. Those three pillars define both our long-term strategy and the priorities guiding our day-to-day decisions. Own refers to our significant Gram treasury and our role in supporting TON security and operation through staking and validator participation. Advance represents our opportunity to support the infrastructure, accessibility, and economic development of the TON ecosystem and the Gram market. Compound describes our objective of building long-term per-share value for all shareholders through productive treasury management and disciplined capital allocation. During the third quarter, we continued to make progress across all three areas. Our treasury earned approximately the same number of Gram as in Q2, continuing to benefit from elevated network staking economics introduced by TON's April network upgrades.

[Kevin Wilson, CEO at TON Strategy Company]

We also made progress toward more efficient operations as we continued simplifying the business following the wind-down of inherited VERB operations. On the network side, we participated in validator governance decisions that established important new infrastructure for Telegram's native Gram Wallet and increased TON's capacity to support transaction activity. Telegram also began a limited rollout of its native Gram Wallet during the third quarter, an important step toward bringing Gram transfers directly into the Telegram experience. I'll begin today's discussion with an overview of our treasury performance. Sarah will then review the financial results in greater detail, and I'll return to discuss our capital allocation approach and developments across TON and Telegram. Turning to our treasury performance, at September 30th, we held approximately 235.1 million Gram, including approximately 232.9 million, or 99% of our Gram holdings, deployed in staking.

[Kevin Wilson, CEO at TON Strategy Company]

During the quarter, our treasury earned approximately 9.4 million additional Gram, consistent with the prior quarter. Our staking operations generated an annualized gross yield of approximately 16% during Q3. As we discussed on our Q2 call, TON's Catchain 2.0 consensus upgrade shortened block production times and increased validator reward issuance. Along with improvements to the TON Virtual Machine, these network changes have supported substantially higher staking yields than those available earlier this year. As one of the network's largest staking participants, we continue to benefit from these improvements through additional Gram earned on our holdings. Our net treasury position increased by approximately 4.6 million during the quarter, even after other treasury activity, including sales to support USD liquidity. In line with our compound pillar, staking continues to enable us to earn additional Gram through participation in network validation without requiring additional cash purchase of those tokens.

[Kevin Wilson, CEO at TON Strategy Company]

Those rewards can themselves be staked, contributing to future reward generation. The other major operational priority is ensuring that the benefits of our productive treasury are supported by an appropriately sized corporate cost structure. On our last call, we highlighted the simplification of our business following the transition away from our inherited VERB operations. We continue to focus on operating efficiently, treasury management, and financial flexibility as we pursue opportunities to increase long-term value for shareholders. I will now turn it over to Sarah to review our financial results.

[Sarah Olsen, CFO and COO at TON Strategy Company]

Thank you, Kevin. Our third quarter results were driven primarily by Gram staking activity and movements in the fair value of our digital asset holdings. Total revenue was $13.1 million compared with $15 million in Q2 2026. Revenue primarily consisted of staking rewards recognized at the fair value of Gram when earned. The sequential decrease of approximately 13% was primarily attributable to lower Gram prices, while the number of Gram earned remained consistent with Q2. Gross profit was $12.4 million, or 95% of revenue, compared with $14.3 million, or approximately 95% of revenue in Q2 2026. Total operating expenses were $8.4 million compared with $13.8 million in Q2, a decrease of approximately $5.4 million, or 39%. The decrease primarily reflected lower Kingsway-related advisory fees, personnel costs, and professional services expenses, along with the effect of elevated non-cash expenses recognized in Q2.

[Sarah Olsen, CFO and COO at TON Strategy Company]

These improvements were partially offset by higher legal fees associated with ongoing litigation matters. Excluding share-based compensation, general and administrative expenses declined approximately $3.4 million, or 41%, sequentially to $4.9 million, primarily reflecting lower advisory fees and personnel costs. Operating income from continuing operations was $4.0 million, compared with income of approximately $0.5 million in Q2 2026. Lower operating expenses more than offset the change in staking revenue, resulting in approximately $3.5 million of sequential improvement in operating income. Net loss from continuing operations before taxes was $22.9 million, compared with Q2 income of approximately $83.5 million in the prior quarter. The third quarter included a $27.2 million net loss from changes in the fair value of the company's Gram holdings. Q2 2026 included an $82.8 million net gain from digital assets fair value changes.

[Sarah Olsen, CFO and COO at TON Strategy Company]

As a reminder, these fair value adjustments reflect changes in the reported value of our GRAM holdings, not cash operating expenses. At September 30th, our digital assets had a reported fair value of approximately $348.5 million, compared with $369.5 million at June 30th. We held approximately 235.1 million GRAM, of which 119.1 million were classified as restricted and 116 million were unrestricted. During the quarter, approximately 42 million previous restricted GRAM became unrestricted. As a reminder, restricted GRAM can still be staked and generate rewards, although it cannot be transferred or sold while restrictions are in effect. At September 30th, we had approximately $25.3 million in cash and restricted cash, compared with $29 million in cash and restricted cash at June 30th. The company has no outstanding debt, which, along with our cash resources and productive digital asset holdings, supports our financial flexibility.

[Sarah Olsen, CFO and COO at TON Strategy Company]

Turning to our staking performance, the chart illustrates the increase in GRAM rewards following TON's April network upgrades and the sustained level of staking production through Q3. Our treasury earned approximately 9.4 million GRAM during the third quarter, representing a gross annualized staking yield of approximately 16%. Since beginning staking in August 2025, the company has earned approximately 23.2 million GRAM in total. Over that same period, we've recognized approximately $35.1 million in cumulative staking revenue. As a reminder, staking rewards are determined by network-level protocol mechanics and validator participation. At September 30th, we had 55.4 million basic common shares outstanding, compared with 56.5 million at June 30th. This change represents a net reduction of approximately 1.1 million common shares during the quarter, reflecting share repurchase activity in the quarter, partially offset by shares issued in connection with vested equity awards.

[Sarah Olsen, CFO and COO at TON Strategy Company]

At September 30th, we held approximately 4.24 GRAM per common share, compared with 3.89 at December 31st, 2025, representing a 9% increase. We continue to evaluate our capital allocation decisions with focus on their potential impact on long-term shareholder value, including the amount of GRAM attributable per share. With that, I'll turn it back to Kevin.

[Kevin Wilson, CEO at TON Strategy Company]

Thank you, Sarah. Turning now to capital allocation, which is central to our compound pillar. Our disciplined approach to capital allocation continues to guide our decisions as we balance opportunities to enhance long-term value per share with preserving US dollar liquidity and maintaining a productive GRAM treasury during periods of elevated network-level staking rewards. As previously announced, on July 1st, we entered into a Rule 10b5-1 trading plan to facilitate repurchases of our common stock over a two-month period under the existing $250 million authorization. During Q3, we repurchased approximately 1.8 million common shares for an aggregate purchase amount of $5.7 million. Repurchases funded with cash reduce the dollar liquidity available to support our operations and pursue future opportunities. Selling GRAM to fund repurchases, meanwhile, preserves cash, but reduces the productive treasury that continues to benefit from elevated staking rewards.

[Kevin Wilson, CEO at TON Strategy Company]

We also carefully consider the liquidity characteristics of the GRAM market, where selling could involve price slippage and transaction costs that affect the overall economics of a repurchase. We also consider the importance of maintaining sufficient trading liquidity in TONX shares to attract and support long-term institutional ownership. The way I would describe our approach is that we're evaluating the overall economics of a repurchase beyond just the discount to book value. Against these considerations, additional share repurchases continue to be one option available to us under our existing board authorization. We will continue evaluating opportunities with our board of directors to repurchase shares based on market conditions, valuation, and alongside the importance of maintaining USD liquidity and preserving the productivity of our Gram treasury.

[Kevin Wilson, CEO at TON Strategy Company]

We also see potential value over time in initiatives that could improve institutional access to Gram, deepen trading liquidity, and strengthen custody and execution infrastructure. We have not committed capital to these opportunities to date, and any investment would need to demonstrate a compelling economic benefit to our shareholders. Ultimately, our objective is to make capital allocation decisions that we believe will enhance long-term value per share while maintaining financial flexibility to support our treasury strategy. Turning to TON, we've seen important progress this year in network performance, Telegram's involvement in TON's development, and most recently, the introduction of Telegram's native Gram wallet.

[Kevin Wilson, CEO at TON Strategy Company]

The foundation of our investment thesis rests on TON's ability to support fast, inexpensive transactions at consumer scale, combined with Telegram's distribution to more than 1 billion users, a combination that creates a direct path for bringing digital asset ownership and consumer payments into a global platform already used around the world. In April, Telegram founder Pavel Durov introduced a seven-step initiative to accelerate TON's development and strengthen its integration with Telegram. Four steps have been publicly announced to date: the implementation of Catchain 2.0, which substantially accelerated transaction processing, a six-fold reduction in network transaction fees, Telegram's increased leadership and participation in network validation, and the restoration of Gram as the native currency's original name. Telegram's more active role is significant because it brings network development into closer alignment with the products and services being introduced to its users.

[Kevin Wilson, CEO at TON Strategy Company]

The increased alignment was evident during Q3 when validators, including TON Strategy, approved two network upgrades supporting Telegram's native Gram wallet and improvements in transaction capacity. Config -123 introduced a shared smart contract design that allows Telegram's native wallets to receive updates through validator-approved network upgrades without requiring users to manually transfer assets to new addresses. Separately, Config 30 was designed to increase network throughput by up to 30%, improving capacity to support more transaction activity on the network. Taken together, the upgrades position the network to better support consumer applications and improve the wallet experience. One of the most important developments came near the end of Q3 when Telegram began rolling out its native Gram wallet. To put that development in context, Telegram users now have access to two distinct but complementary wallet experiences. The first is Walt, formerly known as Wallet in Telegram.

[Kevin Wilson, CEO at TON Strategy Company]

Walt remains available as a separately operated service integrated with Telegram, providing access to multiple digital assets and a broader range of crypto services. In Q3, Telegram introduced Money, the native self-custodial Gram wallet. Unlike Walt, Money is built directly into the Telegram application and can be accessed through Telegram settings for users who have been granted access during the rollout. As the rollout continues, users will not need to open separate wallet services to begin interacting with Gram. Users can send Gram to a Telegram contact without entering a blockchain address, even if the recipient has not yet activated their wallet. The recipient can then activate their wallet to access those funds. Telegram also sponsors the network fees for up to five eligible transfers each day, eliminating the need for users to manage transaction fees for those transfers.

[Kevin Wilson, CEO at TON Strategy Company]

Money also supports connections to compatible TON applications through TON Connect, allowing users to interact with apps using their wallet while maintaining control of their assets. The significance of Money is that it brings Gram closer to the way people already use Telegram. Users can send Gram directly to a Telegram contact without entering a blockchain address or opening a separate app. We believe the native wallet rollout helped bring TON closer to its original distribution advantage thesis. The new wallet also builds on existing integrations of Gram and TON within Telegram's digital economy. Advertisers purchase sponsored placements in Telegram channels using Gram, while eligible channel owners can receive ad revenue in Gram. Creators and developers can withdraw eligible Telegram Stars earnings in Gram, and Telegram users buy and trade collectibles, gifts, and usernames through services such as Fragment.

[Kevin Wilson, CEO at TON Strategy Company]

Expanded native wallet access could make it easier for Telegram users to transfer Gram and interact with applications built on TON, creating opportunities for TON within Telegram integrations to become even more accessible, and for additional consumer use cases to develop. We are interested in seeing how easier access translates into more recurring network activity and greater utility and demand for Gram. For TON Strategy, the progress we are seeing strengthens our conviction in the long-term potential of Gram. As Telegram makes the tokens easier to access and use, we will be watching how that translates into increased transaction activity, wider usage of TON, and recurring demand for Gram. I want to emphasize that our focus is on the factors that we can directly influence: managing a productive treasury, operating the company efficiently, exercising our large validator position to support TON governance decisions, and allocating capital with discipline.

[Kevin Wilson, CEO at TON Strategy Company]

What I think we have demonstrated this quarter is continued progress in managing the treasury and business alongside developments across TON and Telegram that we believe strengthen the long-term opportunity. Developments across TON and Telegram are beginning to make the long-term potential of Gram more tangible, and we believe TON Strategy is well-positioned to participate as the ecosystem continues to progress. Thank you for joining us today and for your continued interest in TON Strategy. We will now turn to your questions.

[Operator]

Thank you. We will now begin the question-and-answer portion of the call. Today's questions have been compiled in advance and will be moderated by Alec Wilson, Head of Investor Relations of TON Strategy Company. Alec, please proceed.

[Alec Wilson, Head of Investor Relations at TON Strategy Company]

Thank you. Our first question is for Sarah. With the wind-down of the legacy VERB operations substantially complete, what expenses do you expect will remain associated with the discontinued business?

[Sarah Olsen, CFO and COO at TON Strategy Company]

Hey, Alec. Thanks. We've substantially wound down all of the legacy VERB operations. I think, barring any unforeseen expenses, we expect OPEX with disc ops to be no more than $150,000 for 2027. We view this as a pretty de minimis cost for the business.

[Alec Wilson, Head of Investor Relations at TON Strategy Company]

Awesome. Thank you. Next one for you, Kevin. How should investors think about the incremental value of owning TONX versus holding and staking Gram directly?

[Kevin Wilson, CEO at TON Strategy Company]

Sure, Alec. Thanks. That's a great question. TONX gives investors exposure to Gram through a publicly traded regulated equity security without the operational complexities of wallets, custody, or direct staking. We actively manage the treasury, the staking operations, liquidity, and capital allocation to seek attractive risk-adjusted returns. Our objective here is to increase the amount of Gram held over time through staking rewards and disciplined capital allocation. We do see opportunities over time to develop additional revenue streams around validation, staking infrastructure, and other types of services supporting the TON ecosystem, which we believe can create potential value beyond direct token ownership. When TONX trades below its underlying treasury asset value, as is the case at present, investors can acquire indirect Gram exposure at a discount. That creates an additional source of potential upside if the discount narrows.

[Alec Wilson, Head of Investor Relations at TON Strategy Company]

Great. Thanks, Kevin. Sarah, we've got another one for you. How does management evaluate the appropriate level of dollar liquidity to support expenses without compromising the longer-term Gram accumulation strategy?

[Sarah Olsen, CFO and COO at TON Strategy Company]

Yeah. We try to target about 12 months of U.S. dollar liquidity. When I say liquidity, what I mean is our OPEX, our COGS, and any contra-revenue obligations. We think this level supports operations, but also mitigates any going concern risks. That said, we try not to hold too much cash. Our objective is to strike the right balance between financial flexibility and then maximizing our Gram exposure.

[Alec Wilson, Head of Investor Relations at TON Strategy Company]

Great. Thanks. Kevin, maybe we'll do one more for you around Telegram. With Telegram beginning the rollout of the native Gram Wallet, what milestones should investors be watching to evaluate progress in TON adoption and demand for Gram?

[Kevin Wilson, CEO at TON Strategy Company]

Sure. I think the first milestone is the pace of Gram Wallet adoption within Telegram, particularly the number of activated wallets and the conversion of those Telegram users into active blockchain participants. Beyond wallet creation, we are focused on recurring usage metrics like daily and monthly active wallets, transactions per user, and retention rates. Sustained engagement will be more meaningful than one-time wallet activations. We also view growth in USDT transfers, payment volumes, and Telegram native commerce as particularly important indicators of real economic activity taking place on TON. We will also be watching the number of applications which are incorporating wallet functionality, particularly around things like payments, digital commerce, subscriptions, and other types of services that create recurring blockchain transactions. Ultimately, the most important measure here is whether increased adoption translates into sustained network activity, fee generation, and incremental demand for Gram.

[Kevin Wilson, CEO at TON Strategy Company]

We want to see genuine economic utility more than simply growth in wallet numbers.

[Alec Wilson, Head of Investor Relations at TON Strategy Company]

Awesome. That concludes our Q&A session for today's call. I will turn it back to the operator.

[Operator]

Thank you. This concludes TON Strategy Company's third quarter 2026 earnings call. You may now disconnect.

Participants

Analysts

• Kevin Wilson, CEO at TON Strategy Company
• Sarah Olsen, CFO and COO at TON Strategy Company
• Alec Wilson, Head of Investor Relations at TON Strategy Company