Hyperliquid Strategies Q1 2027 Earnings Results & Report

Hyperliquid Strategies EPS Results

• Actual EPS: $2.54
• Consensus EPS: $2.10
• Beat/Miss: Beat by +$0.44
• One Year Ago EPS: N/A

Hyperliquid Strategies Revenue Results

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

Hyperliquid Strategies (NASDAQ:PURR) is a digital asset treasury company whose primary focus is to maximize shareholder value through accumulating HYPE, the native token of Hyperliquid, a high-performance blockchain custom-built to house all of finance. Hyperliquid Strategies Inc, formerly known as Sonnet BioTherapeutics Holdings Inc., is based in NEW YORK.

Hyperliquid Strategies Q1 2027 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Net asset value rose about 82% to $3.4 billion during the quarter, while the company reported $621 million in net income. Management attributed most of the gain to HYPE token appreciation and treasury purchases; its shares were up about 215% since beginning trading.
• Positive Sentiment: Hyperliquid reported more than $5 trillion in cumulative trading volume and 330,000 monthly unique wallets, and management highlighted its leading position in perpetual DEX volume and open interest. Executives pointed to potential growth from real-world asset markets and U.S. distribution, while acknowledging the user base remains small compared with major centralized platforms.
• Positive Sentiment: Management said Hyperliquid generated $834 million in value over the 12 months ended September 30, with about 99% of fees directed to token buybacks; it also cited a new USDC-related revenue arrangement that it expects to support buybacks. The company said $1.4 billion has been used for buybacks since inception.
• Neutral Sentiment: The company is applying to establish a U.S. futures commission merchant (FCM), positioning it as a potential neutral intermediary for Hyperliquid customers. Approval and launch timing are uncertain—the process is early, with management estimating a possible three-to-six-month timeframe—and the build-out could cost a single-digit number of millions of dollars.
• Negative Sentiment: Quarterly results depended heavily on unrealized gains from HYPE’s price increase, which could reverse if the token declines. The company recorded a $172 million tax provision and a corresponding deferred tax liability, though management said the taxes generally become payable only if HYPE tokens are sold.

Presentation

[Rob Diamond, Director of Corporate Affairs at Hyperliquid Strategies Inc]

Good morning, and welcome to Hyperliquid Strategies earnings conference call for the quarter ending September 30. I am Rob Diamond, Director of Corporate Affairs for Hyperliquid Strategies Inc. Participating in today's call are David Schamis, Chief Executive Officer, Brett Beldner, Chief Financial Officer, and Jeroen Nieuwkoop, Chief Operating Officer. After the presentation, there will be an opportunity for questions and answers from the audience. Before we begin, please note that the comments during today's call and the accompanying presentation contain forward-looking information. All statements other than statements of historical facts are considered forward-looking statements. All forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from the results discussed in the forward-looking statements. Some of these risks and uncertainties are identified and discussed in the company's filings with the SEC.

[Rob Diamond, Director of Corporate Affairs at Hyperliquid Strategies Inc]

In addition, information in this call and the presentation regarding Hyperliquid and its operations is based on information that has been publicly disseminated by Hyperliquid and has not been independently verified by the company. We ask that you take a moment to read the disclaimers at the beginning of the slides that accompany this presentation, as they contain important information.

[David Schamis, CEO at Hyperliquid Strategies Inc]

Great. Thank you, Rob. Let's go to page five now. It's been another exciting time in the Hyperliquid ecosystem and another exciting quarter at Hyperliquid Strategies. We are up to 38.9 million tokens, and we have about $245 million of cash on our balance sheet. Since inception, we have raised about $1.6 billion of equity publicly, and along with our partner, Unit Trade[XYZ], we are now the largest non-foundation validator in the Hyperliquid blockchain. Impressively, we are now the third-largest DAT in the world, behind only Strategy and BitMine. I will cover this a bit more as we go forward here, but HYPE is also now the sixth-largest market cap of any crypto token. If you go to the next page, it's amazing to think that it's only been three years since Hyperliquid was launched on mainnet.

[David Schamis, CEO at Hyperliquid Strategies Inc]

It's been only a bit over a year since HIP-3 has gone live, allowing RWAs to trade in perp form on Hyperliquid. It didn't take long for the world to take notice of how important of an event that really was. In July of this year, real-world assets represented 51% of volume on Hyperliquid. I am still a FIG guy and a bank guy at heart. A few days ago, I met with a very well-known and highly respected hedge fund manager. His question for me was, "How do we trade on Hyperliquid?" It's really great to see Hyperliquid, what it does, and the opportunities it affords investors permeating to the TradFi world in a big way. You go to the next page.

[David Schamis, CEO at Hyperliquid Strategies Inc]

On page seven, many of these numbers are well-known to the community, so I am not going to go through every one, but I do want to call out a few. Hyperliquid is the number one perp DEX in volume and the number one perp DEX in open interest, with over $5 trillion of volume since inception. The other somewhat unreported number, or I would maybe say under-reported number, is the number of monthly unique wallets on Hyperliquid. It is up to 330,000.

[David Schamis, CEO at Hyperliquid Strategies Inc]

While on one hand, this is super impressive to see the growth, and as I say, I think relative to other numbers everyone focuses on on Hyperliquid, this one has been a bit under-reported, it still pales in comparison to other venues like Binance, Coinbase, and Robinhood, and it shows you how much room there is still to grow and how massive the addressable market is for what Hyperliquid is looking to do. That is, in a lot of ways, what has us excited and keeps us excited about Hyperliquid. In the end, what is the most important thing? I point you to the number in the middle of the circle on the chart on the right. It is how much cash you generate. Hyperliquid has generated $834 million of value in the 12 months ended September 30th.

[David Schamis, CEO at Hyperliquid Strategies Inc]

Many different projects and many different stories in the crypto world have had high hopes and very little actual cash generation. This number is a staggering number relative to almost anything we have seen in crypto, and it is happening every day with the vast majority of that value being returned to the Hyperliquid token holders every single day. If you go to page eight, again, the point I made a second ago, that value gets returned to the token holders. While on one hand, this is probably not new to anybody who has been following HYPE, on the other hand, we think it is super important to point this out on every call because it is such a fundamental thing of the HYPE story. Since inception, $1.4 billion has been used to buy back tokens. 48.3 million tokens have been bought back and taken out of circulation.

[David Schamis, CEO at Hyperliquid Strategies Inc]

That is 99% of the cash flow today, of the fees today that go to these buybacks. Everyone knows this, but I cannot help but repeat it. There was no private equity. There was no venture. There were no other owners that this revenue and this cash flow gets shared up with. 99% goes to the token holders. The other thing that has been well-covered, but I cannot help but bring it up, is the recent transaction, the recent deal that was made with USDC, where now 90% of the revenue generated by the USDC on the Hyperliquid platform effectively goes back to that buyback and goes back to the HYPE holders. I think that was something everyone in the Hyperliquid community was very excited to see, and it really shows the power of what has been built on Hyperliquid in a real meaningful way.

[David Schamis, CEO at Hyperliquid Strategies Inc]

That was a plateau step-up in cash flow to be expected on an ongoing basis on Hyperliquid. If you go to page nine, I mentioned this before, but on the chart on the right, Hyperliquid is now the sixth-largest token in terms of what we consider to be market cap. I want to make two comments about this. Page one, the chart on the right is ranked by what we call outstanding token supply, or OTS. We have an explanation for this on our website, but we think this is the most relevant way to look at the HYPE token. We include the entire circulating supply, and then we also include the still locked tokens that are owned by the team.

[David Schamis, CEO at Hyperliquid Strategies Inc]

Anyone who has heard me talk about this in investor meetings, I always point out that I do not think Jeff Yan is taking a job anywhere else anytime soon, so we think it is fair to include those locked tokens in this calculation. When we do that on an apples-to-apples basis, that is where we get our number six ranking, which the chart on the right shows. I think if we did it with strictly on circulating supply, we would be number seven rather than number six, so it is not a major change, but we think this is the right way to think about it. The chart on the left we find interesting. These, to us, are the five major events that happen in Hyperliquid that really move the market over the period. I am not going to go through each one of them.

[David Schamis, CEO at Hyperliquid Strategies Inc]

We all lived through them. When I look back on number one, which was the silver spike, that feels like about 10 years ago. It was only nine or 10 months ago, and it is just amazing how much has happened in a relatively short period of time on Hyperliquid since we closed our deal in December. If we go to the next page, on page 10, this is something that has been well covered, but we have to focus on this because it is super important to us, the U.S. I want to make a few general points about this. It has been clear that Hyperliquid has been coming to the U.S., and it is great to see that clearly happening officially right now. It is also great to see that Hyperliquid has been welcomed to the U.S. by the regulators.

[David Schamis, CEO at Hyperliquid Strategies Inc]

We find in our interactions with these regulators, both publicly and privately, we are just very impressed with their, what I would call, eagerness for innovation in the U.S. capital markets. We have heard this for a number of them over the years or over the months, but the regulators, I think, genuinely want to see this innovation happening in the United States, not in other places, and I think we could not be more happy to see that. The other thing that is super important to talk about here is the announced transaction between Trade[XYZ] and ICE NYSE. We think that is a monumental event in the Hyperliquid world. The New York Stock Exchange is one of the oldest and most respected financial institutions in the world, and seeing them partnering with one of the most pioneering companies in the exchange world is great to see.

[David Schamis, CEO at Hyperliquid Strategies Inc]

I think six months ago, we were all so impressed that Trade[XYZ] was able to make a deal with the S&P to list S&P 500 index perps by name. Little did we know that only a few months later, we'd be seeing a transaction announced with the New York Stock Exchange. Again, this goes to the points I made on the earlier page, but it is just very impressive and quite amazing to see the pace of progress on Hyperliquid that we've seen in 2026. When you look on the chart on the right, none of these numbers are probably new to anybody, but we think it's worth pointing out just the size of the opportunity versus what we've been talking about here. All of crypto in total is something like a $3 trillion market cap. On one hand, that's great.

[David Schamis, CEO at Hyperliquid Strategies Inc]

On the other hand, as I point out all the time, that's smaller than the market cap of NVIDIA. Global equities market cap is $158 trillion. We don't include all other asset classes that could be one day listed and traded on Hyperliquid. The numbers are absolutely huge, and this page on the chart on the right really just points out how much room there is left to go. If you go to the next page, lastly, and maybe most importantly from our point of view today, we're actually making some news today. We are announcing that we are in the process of applying to form our own FCM. It's a funny thing. Anything we do and anything most people do in the Hyperliquid ecosystem, two seconds after you do it, people are talking about it on Twitter. Here, it's actually been public.

[David Schamis, CEO at Hyperliquid Strategies Inc]

It's been publicly listed, I think, on the NFA's website for more than a few weeks that we've been doing this, and as far as I can tell, no one has noticed. I haven't seen anyone talk about it on crypto Twitter. Maybe nobody cares, but I don't think so. This has been out there for a little bit, but it's been also somewhat under-reported, so we thought it made sense in this earnings call to make it official that we are applying to be an FCM ourselves. Our strategy is to be a fully aligned, neutral FCM for Hyperliquid customers in the U.S. When I say aligned, what I'm referring to is our very large treasury tokens. In the end, what we care about most and what we will always care about most is the value of our tokens.

[David Schamis, CEO at Hyperliquid Strategies Inc]

We think this makes us uniquely qualified to play the role of the neutral bridge to various DCM/DCOs that will be building on Hyperliquid in the U.S. in the near term. For the avoidance of doubt, we have no plans on creating our own market, so it'd be a DCM/DCO ourselves, and we think this is what makes us so uniquely neutral versus anyone else that might be doing an FCM. We're knee-deep in the process right now. We are working constructively with the NFA and the CFTC, and we'll keep everyone posted as far as timing goes. Needless to say, we are very excited about this. From our point of view, if we're able to do this in a way that adds value to the ecosystem and create value for the tokens, we think that would be great, and we think that's great for everybody.

[David Schamis, CEO at Hyperliquid Strategies Inc]

On the other hand, if we spend some time and money on this and in the end, not the most successful FCM, someone else maybe does it better, maybe we even spur some competition for someone to do a better job, that actually is great for us too. Because in the end, the value of our tokens is the most important thing, and what is most important for the future U.S. operations of this is for U.S. customers to have the best experience they possibly can. If we are able to provide that is fabulous, and I am sure those will benefit from that. If we spur some competition, as I said, and someone else does a better job of providing that is great too, because the vast majority of our value is in the tokens that we own.

[David Schamis, CEO at Hyperliquid Strategies Inc]

From our point of view, it is truly a heads we win, tails we win situation, and that is why we are so excited about it. With that, I want to hand over for the next section on page 13 to Jeroen Nieuwkoop, who we know as Jerry, our COO, to cover the next few pages.

[Jeroen Nieuwkoop, COO at Hyperliquid Strategies Inc]

Thanks, David. Let us turn to slide 13. Thank you. We continued adding to our HYPE treasury this quarter in a meaningful way. We ended the quarter holding about 38.5 million HYPE tokens, which is more than triple the amount that we started with when we launched the company in December of last year. On the capital raising side, we raised about $911 million in capital net of fees, issuing 74.6 million PURR shares at an average net price of $12.20. We issued our shares in an mNAV of about 1.15x, which is in line with our treasury framework, and which resulted in an accretion of NAV per share for our shareholders. The capital that we raised was put to work in two ways. First, most of it, $785 million, went into buying HYPE tokens.

[Jeroen Nieuwkoop, COO at Hyperliquid Strategies Inc]

We acquired 9.1 million tokens at an average price of $86.44. Secondly, when our shares traded materially below NAV, we used our capital to buy back stock. We spent about $17 million to buy back about 2.7 million shares at an average price of $6.36. Again, in line with what we are supposed to do according to our treasury framework, and in a manner that was accretive to our NAV per share. We closed the quarter with $255 million in cash and cash-like instruments and zero debt. This is up from about $150 million in cash and cash-like instruments that we reported at the end of last quarter, ending June 2026. On the next slide, we show what this did to our net asset value.

[Jeroen Nieuwkoop, COO at Hyperliquid Strategies Inc]

We began the quarter at $1.9 billion, and we finished the quarter at $3.4 billion, an increase of about 82%. The bridge on the left breaks that into four different pieces. First, capital. As we discussed in the previous slide, we raised $911 million, and we deployed $802 million for a net increase of about $105 million. Second, our HYPE treasury itself, which increased by $1.6 billion. Part of that is the HYPE tokens we bought and received in staking rewards. We went from 29.3 million to about 38.5 million, and the rest is an increase in the value of the HYPE tokens that we hold. The HYPE token price increased from $65 at the end of June to about $91 at the end of September.

[Jeroen Nieuwkoop, COO at Hyperliquid Strategies Inc]

Third, the change in our deferred tax liability, which rose by about $172 million, this being the tax effect of the gain on our HYPE treasury. As you all know, these taxes only become payable when you actually sell HYPE tokens. Other items, majorly including expenses, moved NAV by about $8 million. On the next slide, we want to go into our share price performance and where we rank against other treasury businesses. On the left, our share price traced HYPE's breakout performance throughout the first nine months of the year. At the end of the quarter, our share price was up about 215% compared to the end of December when we started trading on NASDAQ, significantly outperforming the majority of other digital asset treasury companies. And on the right is where that leaves us.

[Jeroen Nieuwkoop, COO at Hyperliquid Strategies Inc]

We are by far the largest HYPE treasury company, and with our treasury worth about $3.5 billion, we have moved up the ranks and become the third-ranked DAT among all DATs globally, behind Strategy and BitMine. And with that, I'll turn it over to Brett Beldner, our CFO, to discuss our financial performance for the quarter in more detail.

[Brett Beldner, CFO at Hyperliquid Strategies Inc]

Thanks, Jeroen, and thank you everyone for joining our call. Q1 of 2027 was another strong quarter for the company. Our treasury strategy yielded approximately $816 million, comprised primarily of unrealized gains of $803 million on our HYPE holdings and $12.3 million of staking and validator commission revenue. The unrealized gains resulted from both the price appreciation of, one, HYPE from $65.04 at June 30th to $90.99 at September 30th, and secondly, the execution of our treasury strategy, purchasing approximately 9 million HYPE tokens at average prices below the month-end rate. Operating expenses ticked up to $7.6 million for the quarter, the increase primarily driven by higher equity compensation costs of approximately $1 million, increased executive incentive compensation of approximately $1 million, and business development costs related to the FCM of around $800,000.

[Brett Beldner, CFO at Hyperliquid Strategies Inc]

Other expenses of $15.3 million were recognized relating to the change in fair value of our share price between the date of issuance and the date of settlement for any equity issued under our equity facility in accordance with GAAP. The result is a net income before taxes of approximately $793 million. After recognizing approximately $172 million of a provision for income taxes, primarily related to the tax effect of the difference between our tax basis in our HYPE tokens and the fair value of the HYPE tokens at the end of the quarter, we recognize approximately $621 million of net income.

[Brett Beldner, CFO at Hyperliquid Strategies Inc]

We also present our P&L for the last four quarters, which represents the 10 months of performance since we closed our deal last December, which shows $1.38 billion related to our treasury strategy and income, resulting again from both the HYPE appreciation and the execution of our treasury strategy, and a net income of approximately $939.5 million after taking into account expenses, including those related to the transaction. On the next page, from a balance sheet perspective, the story is very similar to last quarter, just at a much larger scale. There are four main components to our balance sheet. Cash, which increased from $152 million at year-end to approximately $255 million at the end of the quarter, coming from proceeds that we raised from our equity facility. Our HYPE digital assets, which increased from approximately $1.9 billion to approximately $3.5 billion over the same period.

[Brett Beldner, CFO at Hyperliquid Strategies Inc]

The $3.5 billion represents approximately 38.5 million tokens, up from 29.3 million at year-end, at a price of $90.99. The result is a total asset balance of approximately $3.76 billion. On the other side of the balance sheet, there are two material items. Our deferred tax liability, which, as described before, represents the tax effect of the difference between the fair value of our cost basis of the HYPE tokens, but is only an obligation if we sell the tokens. Our equity rose from approximately $1.87 billion-$3.4 billion, resulting from both an increase from our net income for the period of $620 million, and also from the issuance of around $900 million in equity in executing our treasury strategy. With that, I'll turn it back to David for some closing remarks before we open this up for questions.

[David Schamis, CEO at Hyperliquid Strategies Inc]

Thanks, Brett. It goes without saying, we think this was another good quarter. It also goes without saying we continue to be extremely excited about the future for Hyperliquid and the future for Hyperliquid Strategies. The FCM is the obvious, most newsworthy thing from this call. We're excited about this, and we're excited to facilitate the entrance of Hyperliquid to the U.S., hopefully in the not-so-distant future. With that, we'll be happy to take questions.

[Operator]

At this time, if you would like to ask a question, please click on the raise hand button, which can be found on the black bar at the bottom of your screen. When it is your turn, you will receive a message on your screen from the host allowing you to talk, and then you will hear your name called. Please accept, unmute your audio, and ask your question. We will wait one moment to allow the queue to form. Our first question will come from Gareth Gacetta with Cantor. Please unmute your line and go ahead.

[Gareth Gacetta, Analyst at Cantor]

Hey, guys. Thanks for taking the question, and congrats on the results. I want to touch on the FCM. Obviously, it's super exciting to see this release. Maybe can you walk us through the logistics of the approval process and maybe how we get from nothing today to a live product and market? On top of that, I'm wondering if you have any insight into if we should expect the HIP-3* markets to have a similar economic profile to the traditional HIP-3 markets, related to how much stake you need to become a deployer and the revenue share with the protocol.

[David Schamis, CEO at Hyperliquid Strategies Inc]

Great. Let me start. By the way, thanks for joining us, Gareth, and thanks for the question. Let me start with the second part of your question. We are not totally sure exactly how those terms are going to work, and as far as how much stake, I think that's- I don't think that's publicly known yet, and I don't think we know it. I'm certain we don't know it either. I think this stuff is being figured out. I think it's going to be figured out soon because this is obviously happening live, and I think there's an urgency to do it. I'm going to let Jerry answer the questions around the logistics and timing around the FCM.

[Jeroen Nieuwkoop, COO at Hyperliquid Strategies Inc]

Hi, Gareth. Yeah, thank you. On the timetable and what we're doing on the application front, I think it's still pretty early stage, and we are working with the NFA through the application process, and that's going really well. In terms of when we think this will go live, that's a little bit difficult to predict. Generally speaking, we're hopeful that this is sort of in a maybe three, four, five, six-month timeframe, but we'll certainly keep you updated. There's definitely things that we need to work through. It's the regulated stack plus Hyperliquid as an underlying technology is a new structure, and we just have to work through it.

[Jeroen Nieuwkoop, COO at Hyperliquid Strategies Inc]

There's a lot of excitement and commitment around making this happen, but obviously, we need to work through the details with the working teams. We're diligently doing that, and we'll make sure to keep everyone updated as we go along.

[Gareth Gacetta, Analyst at Cantor]

That's super helpful. Thank you. I know you guys gave some color on the SG&A step-up quarter-over-quarter, but I'm wondering if you could just provide any color on how you think that may play out on a run rate basis, and more specifically, if you think or may anticipate any additional expenses as you kind of build out this HIP-3* product going forward, or if the $800,000 you guys mentioned was more of a one-time expense. Thank you.

[Brett Beldner, CFO at Hyperliquid Strategies Inc]

You're welcome. There's a couple pieces to that. I would say our base business of running the treasury strategy is on a excluding equity-related compensation is still in that $4 million range. The equity compensation, because of GAAP and the requirements, do add somewhere between $1.5 million and probably $2 million going forward a quarter. But the targeted base run rate of the strategy business is still in the, what we had discussed previously, $4 million-$4.5 million range. We continually look for ways to cut costs and be as efficient as possible. Regarding the FCM in general, that is something that there will be additional costs. We're trying to move this forward as cost-conscious as possible, but we need to figure out how this will be pulled together.

[Brett Beldner, CFO at Hyperliquid Strategies Inc]

We will need to figure out what cost technology build-out we will need. We're still in that process. I'll turn it over to David, who's got some more insight into that.

[David Schamis, CEO at Hyperliquid Strategies Inc]

Yeah, look, I would say the way we feel about the FCM in general is, we want to see this as sort of asymmetric upside. We see this as spending a modest amount of money to get to the finish line to have an FCM up and running. And modest, I don't have a number for you, but it's measured in probably single-digit million dollars. It's not $50,000, but it's certainly not $20 million. It's single-digit million dollars as sort of a one-time project expense, I would think about it as. And to the extent we get the approvals, to the extent we see a real business opportunity, we would only move it forward if we think we're going to be profitable in the very near term.

[David Schamis, CEO at Hyperliquid Strategies Inc]

This is not something we're looking to spend lots of money on with the hopes of making some money in the future. So again, we really are focused on this as sort of an asymmetric kind of upside. And again, if it doesn't work for us, or as I said before, if someone else is able to do a better job for customers, that's great for us. We spent a few million dollars, maybe we wish we hadn't, but we also facilitate a super successful HIP-3* launch. That's perfectly good for us because that probably adds a lot to the value of our tokens.

[Jeroen Nieuwkoop, COO at Hyperliquid Strategies Inc]

And maybe as a last point to make, when we're doing this, the big advantage that we have is that we can be extremely focused, right? This is not a general-purpose FCM that we're setting up. It's very focused on one particular market, one particular structure, and in today's world, we can leverage a lot of resources. So we think that we can do this on a very efficient basis. But we'll make sure to keep you posted on any sort of updates as we're going through the process now, and trying to figure out which parts can be outsourced and what vendor costs are. And as we get more color on that, we'll make sure to keep everyone updated.

[Gareth Gacetta, Analyst at Cantor]

Totally. Super helpful. Thanks for taking the questions, and congrats again on the quarter.

[Operator]

Your next question-

[David Schamis, CEO at Hyperliquid Strategies Inc]

Thanks very much.

[Operator]

-will come from the line of Brian Vieten with Siebert. Please unmute your line and go ahead.

[David Schamis, CEO at Hyperliquid Strategies Inc]

Hi, Brian.

[Brian Vieten, Analyst at Siebert]

Awesome. Hey, guys. Congrats on the FCM announcement. David, I just had one on the FCM build-out and then one on Hyperliquid. Understood you do not intend to operate your own markets. I guess given the substantial treasury holdings, do you see an opportunity to provide the 500,000 token staking requirement to third-party HIP-3 market deployers in exchange for economics, similar to some of the capital as a service arrangements we have seen elsewhere in the ecosystem. I guess, could that complement the FCM business?

[David Schamis, CEO at Hyperliquid Strategies Inc]

The answer is definitely maybe. The opportunity is obvious since we have close to 40 million tokens on our balance sheet, and there is a required amount of tokens to be a HIP-3 or a HIP-3* deployer. We have actually had some conversations like that. Like anything in this world, the devil is in the details. As I said before, we kind of like asymmetric upside. We do not like the opposite. To the extent we get comfortable with the various risks and we think there is enough profit in it to take the time, take the energy, and to take any risks, if any, we would certainly do it. We are not sitting here saying we have to do a lot of this for our strategy in general to be successful. Definitely maybe is my answer.

[Brian Vieten, Analyst at Siebert]

Okay. Yeah, that makes sense. Stepping back to Hyperliquid itself, one of the things that impressed us, and you kind of touched on it, but just how quickly the protocol has diversified beyond traditional crypto perps. I guess as you look out over the next 12, 24 months, which opportunities are you guys viewing as the biggest incremental contributors to protocol fees and the token buybacks between HIP-3, regulated U.S. markets, HIP-4, stablecoins, any others?

[David Schamis, CEO at Hyperliquid Strategies Inc]

I do not know if we lost you there. Operator, you still hear us, right?

[Operator]

Yep, I can still hear you.

[Brian Vieten, Analyst at Siebert]

Oh, can you guys hear me?

[David Schamis, CEO at Hyperliquid Strategies Inc]

Yeah, I think I caught when he was. We hear you now. Sorry, I think we lost you for a second.

[Brian Vieten, Analyst at Siebert]

Okay.

[David Schamis, CEO at Hyperliquid Strategies Inc]

I think I got the idea.

[Brian Vieten, Analyst at Siebert]

Just on the product side, what are you guys most excited about going forward?

[David Schamis, CEO at Hyperliquid Strategies Inc]

Yeah, look, it's impossible not to be most excited about the thought of real-world assets in the U.S. trading on Hyperliquid. If you weren't excited about it, whatever it was two weeks ago, seeing the Trade[XYZ] and ICE NYSE announcement has got to make anybody excited. I think it's hard with a straight face to say that in and of itself is not the most exciting thing we've seen. Obviously, more people doing it, more competitors, competition's a great thing, right? Different deployers, both in the U.S. and outside the U.S., sort of fighting to provide the best markets to the most amount of customers we think is great. But again, the short answer to your question is the U.S. I think something that's still been a little bit of a sleeper, and you mentioned, is HIP-4.

[David Schamis, CEO at Hyperliquid Strategies Inc]

I couldn't help but notice the unbelievable, what I consider to be success and value that Kalshi brought during the returns Tuesday night for the election. I think prediction markets are obviously very exciting, and I think the idea that others can build their competitors to Kalshi on Hyperliquid is hugely exciting. Outcome.xyz has shown some real nice growth, and we're excited about that also. I can keep you on the phone for an hour about all the other things that continue to excite us, but I think that has to be our top two right now.

[Brian Vieten, Analyst at Siebert]

That's great. Yeah, thanks.

[Jeroen Nieuwkoop, COO at Hyperliquid Strategies Inc]

Yeah. This is a different take on your question. We definitely like all the different products and the breadth and diversification of revenue on Hyperliquid. One of the things that we often talk about, and that David also raised in the presentation today, is on the distribution side. I think there are enormous opportunities. Again, coming back to the U.S., we think that if and when Hyperliquid is able to come to the U.S., that opens up a lot of very large markets, both on retail as well as on the institutional side. We are very excited about what can happen there with a regulated stack sitting in the U.S. So there is a huge opportunity there. It is very early days.

[Brian Vieten, Analyst at Siebert]

That is great. Thanks, Jerry.

[Operator]

As a reminder, if you would like to ask a question, please click on the raise hand button, which can be found on the black bar at the bottom of your screen. When it is your turn, you will receive a message on your screen from the host allowing you to talk. Then you will hear your name called. Please accept, unmute your audio, and ask your question. Our next question will come from the line of Matthew Galinko with Maxim Group. Please unmute your audio and ask your question.

[Matthew Galinko, Analyst at Maxim Group]

Hey, guys. Appreciate you taking my question. My internet dropped kind of in the middle, so apologies if this is repeated. Just given the outcome of midterms, I am curious if you could give us some scenarios of how you think that influences HYPE's path into the U.S. Thanks.

[David Schamis, CEO at Hyperliquid Strategies Inc]

Look, I think from what I can tell, I would say a few things on that point. One, to directly answer your question, I do not think there is any material impact on Hyperliquid coming to the U.S. This is clearly being handled by the regulators and the administration. I do not think this is going to change their opinion regarding Hyperliquid or probably anything in crypto anytime soon. That is sort of specifically. I think more generally, and obviously it is way too early to see, but there have been some rumors already floating around that there is a possibility that Democrats in the next Congress are going to try to bring CLARITY Act back to life.

[David Schamis, CEO at Hyperliquid Strategies Inc]

While on one hand, that does not directly affect Hyperliquid since CLARITY Act is mostly a spot bill and we are mostly a perp venue, but I think in general, that would be seen as a nice step forward. Look, personally, I really hope, and I tweeted about this yesterday or the day before, I really hope that both parties going forward no longer see crypto as a partisan issue. I do not think there are all sorts of things that become partisan, but many things are bipartisan, and I think that I personally believe being anti-crypto is sort of a losing issue for either party, and I hope I am not the only one that thinks that. Unless there are any other questions, or Matt unless you have any follow-ups to that, I think that concludes our call.

[David Schamis, CEO at Hyperliquid Strategies Inc]

I certainly appreciate everyone listening in. I can tell you the four of us very much look forward to these calls. We enjoy this interaction, and obviously, both for the analysts on the call, but also the shareholders, please reach out. We spend lots of time talking to both analysts, shareholders, potential shareholders, hopeful shareholders, et cetera. We very much enjoy doing that, obviously, anytime, and we hope to continue doing that as much as possible. We love seeing institutional investor interest and retail investor interest in Hyperliquid and in HSI. Thanks, everyone, for the time.

Participants

Executives

• Rob Diamond, Director of Corporate Affairs
• David Schamis, CEO
• Jeroen Nieuwkoop, COO
• Brett Beldner, CFO

Analysts

• Gareth Gacetta, Analyst at Cantor
• Brian Vieten, Analyst at Siebert
• Matthew Galinko, Analyst at Maxim Group