Hyperliquid Strategies Q3 2026 Earnings Report

Hyperliquid Strategies EPS Results

• Actual EPS: N/A
• Consensus EPS: N/A
• Beat/Miss: N/A
• 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 Announcement Details

• Quarter: Q3 2026
• Date: 5/7/2026
• Time: After Market Closes
• Conference Call Date: Thursday, May 7, 2026
• Conference Call Time: 5:00PM ET

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 Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: The company holds roughly 18.8–20M HYPE tokens and reported $202.4M of treasury strategy income in Q3 (driven by a $198.4M unrealized HYPE gain), while staking all tokens and earning $2.6M in staking revenue.
• Positive Sentiment: HIP-3 (real‑world asset perps) has rapidly gained traction—five of Hyperliquid’s top 10 trading pairs are real‑world assets and an oil contract hit $710M in 24‑hour volume, attracting TradFi interest.
• Positive Sentiment: Hyperliquid will launch its own validator on May 11 in partnership with Unit/Trade XYZ, intended to deepen ecosystem alignment and create new revenue streams for the company.
• Positive Sentiment: HIP‑4 (outcome/prediction markets) plus Builder Codes are live as proofs‑of‑concept, enabling permissionless third‑party deployers and opening addressable markets including options, insurance and pre‑IPO trading.
• Negative Sentiment: The company spent about $160M acquiring HYPE, lowering cash to $113.1M, reported a nine‑month net loss of $165.4M (including a one‑time IPR&D write‑off), and carries a sizable deferred tax liability that would crystallize if tokens were sold.

Presentation

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

Hello, I'm Rob Diamond, the Director of Corporate Affairs for Hyperliquid Strategies Inc. Welcome to the Third Quarter 2026 Earnings Call. You'll hear shortly from our CEO, David Schamis, and then from our CFO, Brett Beldner. 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 you to 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]

Thank you, Rob. This is David Schamis, CEO of Hyperliquid Strategies. Happy to be here again to announce another quarter's worth of earnings. As a quick reminder, we are by far the largest digital asset treasury company for the HYPE token. Today, we own over 20 million HYPE tokens and have over $100 million of cash on our balance sheet. We have been working hard to find ways to enhance our earnings while constructively contributing to the Hyperliquid ecosystem. Today's example of that is that we are launching a validator, which we'll be talking about more shortly. Regarding Hyperliquid, we continue to see more and more real world assets moving on chain via the Hyperliquid blockchain, which we find very interesting and exciting, and we're gonna talk obviously about that more as we go forward.

[David Schamis, CEO at Hyperliquid Strategies Inc]

Finally, we continue to see the HYPE token perform very well, especially compared to other major crypto tokens. If you turn on CNBC or any other business news channel on any given day, you will hear any number of the titans of finance that we all know and love talking about how global finance is going to be going on-chain in the years to come. I think that we all agree with this, what I continue to really believe is that a lot of those titans, while they're correct in their statements, don't really know or understand or think hard about how exactly that's going to happen. What is the precise legal mechanics and form of how that's going to get done? We think the answer to that is fairly obvious. A big part of that is Hyperliquid.

[David Schamis, CEO at Hyperliquid Strategies Inc]

We've talked about this in the past, and we'll talk about it more today, but Hyperliquid has been and we think will continue to be the simplest, cleanest and easiest path for real world assets coming on chain. The most exciting thing I would say from since the last quarter's earnings announcement is the amount of attention and focus that this fact has garnered over the last three months. We've been in the middle of it, lots of people have seen it, and we're gonna talk more about it today. Unlike many relatively young platforms, both in crypto and outside of crypto, Hyperliquid generates a significant amount of cash flow.

[David Schamis, CEO at Hyperliquid Strategies Inc]

As we'll see in a few pages from now, nothing else in crypto really compares. As many have commented on recently, it is amazing to look at what a team of 12 people who never took one penny of outside capital has been able to achieve. These numbers are actual fees that the protocol has generated over time. The numbers on the right showing various rankings and positions that are on the Hyperliquid blockchain today are actual numbers. These aren't things we hope to achieve. These are things that have actually happened, and it is just worth noting on every time we get on the phone that this was done by 12 people without 1 penny of outside capital. I referred to this a second ago. This will keep coming up in our discussion.

[David Schamis, CEO at Hyperliquid Strategies Inc]

HIP-3, which is the term used for bringing real world assets on chain in perps form on Hyperliquid. I've been talking about this for a year now. Last summer, when we announced our deal, this was something that looked like a really exciting thing that might happen sometime in the future. We were excited about it, other people in the ecosystem were excited about it, but no one was seeing tangible evidence of it yet because it didn't happen yet. HIP-3 only launched in November, and if you look today of the largest trading pairs on Hyperliquid, five of the top 10 are real world assets. The S&P 500, the equivalent of the NASDAQ 100, two oils and gold.

[David Schamis, CEO at Hyperliquid Strategies Inc]

It is really impressive to see the size of these markets and the short period of time that they've become as important as they have. The 24-hour volume, this was on April 29th, for one of the oil contracts you see here was $710 million. That is real money in a short period of time. It's only been a few months since oil was even listed on Hyperliquid to begin with. In the early part of 2026, we got to see two live examples of the impact that Hyperliquid could have on real world assets well beyond a crypto exchange. On the left here, we see silver. In January, when metal trading was seeing a spike in volume globally, Hyperliquid quickly became a relevant venue for that trading.

[David Schamis, CEO at Hyperliquid Strategies Inc]

There was one day, you see here the line here, where Hyperliquid silver volume spiked. It's obviously a volatile thing because it's the trading levels in silver are volatile, but it's continued to reach those high levels in the future, and it's been just incredibly impressive to see what has happened in silver and other metals on Hyperliquid also in a short period of time. Frankly, more interesting, if you look at the chart on the right, is when oil came onto Hyperliquid. This happened only a few weeks before the Iran war started. You'll notice here the line for when the Iran conflict started.

[David Schamis, CEO at Hyperliquid Strategies Inc]

Interestingly, that started late on a Friday, New York time, when the other traditional venues where oil trades was closed. You could see what happened on Hyperliquid as far as oil trading volume from that Friday going forward. You see that first slope in that first few days. It obviously continued meaningfully after that. We're at a point now when you look at these volume numbers. You look at what's gone on in the world, it's impossible to say that Hyperliquid has not very quickly become an important part of the oil trading world. I think that lots of the traditional venues have noticed this. The amount of interest we've gotten from what I'd call TradFi market participants, people we talk to all over the place because of this and the press it's garnered, has been very, very impressive.

[David Schamis, CEO at Hyperliquid Strategies Inc]

While we are still very excited about HIP-3, the team in Singapore is bringing us HIP-4. HIP-4 is outcome markets, also known as prediction markets. Building this capability onto Hyperliquid is very exciting and very brand new. They've launched a few markets so far, really as just a proof of concept. Behind all the headlines that prediction markets get, there are some really important things to stress here. First of all, this isn't just about competing with Kalshi and Polymarket, even though people love talking about Kalshi and Polymarket. It's about options, it's about insurance. There's a massive market that Hyperliquid can attack with bringing outcome markets on chain on Hyperliquid. Secondly, like HIP-3, HIP-4 ultimately will be set up where deployers can permissionlessly build on Hyperliquid. We talked about this in our last earnings call.

[David Schamis, CEO at Hyperliquid Strategies Inc]

In our last earnings call, this was something we thought would happen in the future. Today, we're seeing this is happening, something live. The idea that if somebody wants to compete with the two incumbents right now, they don't have to build their own back end. They don't have to build their own systems, order books, all the complicated things you have to build to be in exchange these days. You could build on top of Hyperliquid a lot faster, a lot less expensive, and a lot more effective. I've alluded to this. This is just a small snippet of the various things out there in the world, but the TradFi press has figured this out. This is no longer a secret.

[David Schamis, CEO at Hyperliquid Strategies Inc]

I think when we announced this deal last July, I had a lot of my friends that I kind of grew up with in the industry asking me what the hell was Hyperliquid, and I explained it, and they still didn't quite understand. We went on CNBC early on and got some blank stares. Today, the world is figuring this out. We are proud to say that we've been ahead of this, but we're not surprised at all to see this happening, and we expect this, that will continue going forward. Despite this press, despite the headlines we're all looking at here, and despite the people on this call who are listening who obviously know this well, we still think the understanding, the knowledge, and the sort of saturation in the traditional financial markets is still extremely low.

[David Schamis, CEO at Hyperliquid Strategies Inc]

There are still lots and lots of people, most people that we deal with, in our normal jobs that have not heard of this. I talked earlier about Hyperliquid versus other similar tokens. This chart is very telling. The buybacks that Hyperliquid has done over time has been more than these other tokens combined. This is just a simple graphical example of how successful this has been in returning actual cash flow to the token holders. Nothing in crypto compares right now, and we think that's gonna continue. I wanna point out some numbers on the left here. When we think about tokens outstanding, we do our best to equate that number to a shares outstanding number of a normal, traditional, publicly listed company. We think that number that equates here is 477 million tokens.

[David Schamis, CEO at Hyperliquid Strategies Inc]

When you take the 477 times the token price, that comes out to about $19 billion above here. That's how we think of tokens outstanding. That's how we think about market cap. There's a page in the appendix that lays this out in more detail, and we are working on getting a live version of this math on our website sometime in the not-so-distant future. We just think it's important when people think about Hyperliquid and think about things like total market cap of the token, that everyone's talking off the same page, and we're not sort of debating tokens outstanding, which is something that we don't wanna be debating on this topic. It's also important, it's a theme that we've been touching on here.

[David Schamis, CEO at Hyperliquid Strategies Inc]

We've talked a lot about a number of the events in 2026 that have raised the awareness of Hyperliquid. Here are some of the numbers that back that up. Ethereum and Solana continue to be highly correlated to Bitcoin. HYPE has always been less correlated to Bitcoin, but it continues, and if anything, getting less correlated to Bitcoin as time goes on. We think that makes perfect sense for all the reasons we've already discussed. The graph on my right. Needless to say, is my favorite. This shows how our DAT has performed versus other. Excuse me, this shows how HYPE has performed versus other of the large tokens, Bitcoin, Ethereum, and Solana. The call-outs we have on here are the obvious ones we talked about already.

[David Schamis, CEO at Hyperliquid Strategies Inc]

You see when silver spiked, that I think was a message to the world that Hyperliquid is real, that something is going on here. You can see what the token did versus the other major tokens. That continued after the Iran conflict started, as you can see on this chart. When we think about growth going forward, we've had a page in this in the past. I'm not going to spend too much time on it. This is really where we see the four legs of the stool of future growth. Builder Codes is something that has been around for Hyperliquid for a while. It's the ability for other people to offer Hyperliquid perps to their customers on their own platform. I think just a few days ago, we saw Ledger offer this, which we're really happy to see.

[David Schamis, CEO at Hyperliquid Strategies Inc]

They seem like a perfect partner along with people like MetaMask and Phantom to be doing this. We think that, over time, we'll be seeing other even more institutionalized partners coming online doing Builder Codes. HIP-3, we've talked about quite a bit, bringing perps for real-world assets on chain quickly and, relatively simply versus other alternatives of bringing real-world assets on chain. We haven't talked about portfolio margin today, but we've talked about it in the past. This allows traders and market makers to more easily share their collateral across multiple positions. This is a subtle point. It's not something that every retail trader understands or cares about, but it's something that makes the system, makes liquidity, makes volumes smoother, and better and larger on the Hyperliquid blockchain.

[David Schamis, CEO at Hyperliquid Strategies Inc]

Lastly, obviously, we talked about outcome markets as well. It's a whole new world of additional things that can be brought on Hyperliquid, and we're very excited about it. Let's talk a little bit about our company and some of the things we've done since we closed on December 2nd. Since we closed, we have deployed over $225 million of our capital. Early on, we used about $10.5 million of that to buy back our stock. This was mostly in the month of December. Our repurchase cost of those shares equated to $3.42 per share. Keep that number in your head for a second. We have acquired about 7.3 million HYPE tokens at an average price of $29.53. Right now, that price is well over $40.

[David Schamis, CEO at Hyperliquid Strategies Inc]

We have sold about 6.2 million shares at an average price of $6.31 per share. I can't help but pointing out, I wanna make this abundantly clear to everybody, we bought back our shares at $3.42 a share. We've sold shares at an average of $6.31 a share. That's something we obviously feel very good about. In a lot of ways, this one page is sort of exhibit A of how DATs are supposed to work. When multiples are low, you buy back. When multiples get higher, you issue, and you buy tokens along the way. I mentioned this earlier, we're very excited to announce that we are gonna be creating our own validator, which will be launching on May 11th.

[David Schamis, CEO at Hyperliquid Strategies Inc]

We have partnered with Unit, arguably the most credible deployer in the Hyperliquid system. Unit, for anyone that doesn't know, is the company responsible for Trade XYZ. Unit and Trade XYZ are two names, and they're one and the same, people and one and the same, businesses. We think that what Trade XYZ has done over the last number of months has been incredibly impressive. They are by far the largest HIP-3 deployer on Hyperliquid, and it seems like they are the perfect partner for us to be partnering with to launch our validator. Needless to say, we couldn't be happier about that. For us, what does this do? This creates opportunities for additional revenue streams from Hyperliquid Strategies. It improves our own stake in economics, and it deepens our alignment in the ecosystem.

[David Schamis, CEO at Hyperliquid Strategies Inc]

As I mentioned a minute ago, we will be launching this on May 11th. If you are a large HYPE holder, don't be surprised if I show up in your office and try to urge you to move your tokens to our validator. Obviously, we continue our disposition of the legacy Sonnet assets. We're happy to announce that we've really completed that at this point. What we have done was very much in line with what we expected when we did this initial transaction. I'm not gonna go through every point here because it's relatively small and relatively immaterial to our larger company today. I will say, when the dust settles here, we are gonna own 40% of the new co called Guidant BioTherapeutics.

[David Schamis, CEO at Hyperliquid Strategies Inc]

Over time, if and when they raise additional capital, that 40% number is likely to go down. We obviously wish them the best. We own a good chunk of their company, and we hope our 40% ends up being worth a lot of money one day. Last point, I jumped the gun on this earlier in the discussion, this shows both the correlation between our token and our stock price and our own stock price performance versus other DATs. It's interesting to see on the left. Our correlation versus HYPE has actually gone up over time.

[David Schamis, CEO at Hyperliquid Strategies Inc]

I think while on one hand it might be surprising for anyone to think that our correlation was so low, it shows you why we had the opportunity to buy back as much stock as we did, mostly early on, after closing when we did it. It makes sense that over time that correlation goes up, though it also can make sense that that's going to level out at some and maybe even come down over time as we add more revenue streams that will be correlated, but far from perfectly correlated to the value of the HYPE token. We don't think this ever gets to 100%. I'm not sure what the sort of perfect run rate target for this is. I think 30% was too low where we started. We're happy to see this move in the right direction.

[David Schamis, CEO at Hyperliquid Strategies Inc]

On the right side, as I jumped the gun on earlier, when you compare the performance of our DAT versus other DATs in the large cryptocurrencies, we have outperformed by a lot. I think most of that outperformance has been because our token has outperformed. We don't have delusions of grandeur around here about what we have done versus what the token has done. We think a small amount of this that we're proud of is things that we have done that we've highlighted in the last few pages, and how we've created value for our shareholders when those opportunities have existed. I'm gonna pass on to Brett, who's gonna go into a bunch of the numbers around the quarter in more detail than I did.

[Brett Beldner, CFO at Hyperliquid Strategies Inc]

Thank you, David. Hyperliquid Strategies Inc. had a strong third quarter, primarily driven by the appreciation of the price of the HYPE token, which as David had previously shown, significantly outperformed the other major cryptocurrencies during the time period. Specifically, HYPE appreciated from a price of around $25.48 on December 31st, 2025 to $36.60 on March 31st, 2026. That appreciation drove an unrealized gain on our HYPE holdings for the quarter of approximately $198.4 million. We continue to generate yield through our holdings, currently staking all of our HYPE tokens while we evaluate other possible yield-enhancing strategies. Our current yield strategies generated staking revenue of $2.6 million for the quarter, and we also earned around $1 million of interest income on our cash and cash equivalents.

[Brett Beldner, CFO at Hyperliquid Strategies Inc]

The result was $202.4 million of what we refer to as treasury strategy income. For the quarter, we recognized $7.2 million in operating expenses, with a significant portion of that relating to the winding down and disposition of the majority of Sonnet's assets. The result, income before taxes of $195.2 million. From a tax perspective, we recognized a $42.7 million deferred tax expense as required under GAAP, which relates to the difference between the fair value of our HYPE tokens and their tax cost basis. We note this is not a cash expense we owe currently, but rather these taxes would only crystallize into a current obligation if we sold our HYPE tokens, which is not in line with our current treasury strategy.

[Brett Beldner, CFO at Hyperliquid Strategies Inc]

The result for the quarter was a net income of $152.5 million. For the nine months ending March 31st, 2026, our treasury strategy resulted in a $58.6 million loss. This loss is primarily driven by the $169.2 million loss recognized in the second quarter, associated with the difference between the HYPE price at the signing of the acquisition agreement with Sonnet last summer when the cryptocurrency market was hot, and the price at the time of the closing in December, which reflected a softness in the overall market. The combination of the loss from the treasury strategy and the one-time IPR&D write-off associated with the Sonnet acquisition drove a pre-tax net loss of $104.9 million.

[Brett Beldner, CFO at Hyperliquid Strategies Inc]

Incorporating the deferred tax expense of $60.5 million, as described previously, drove a nine-month net loss after taxes of $165.4 million. Moving on to the next slide, the balance sheet. You can see that we spent the quarter using our cash and cash equivalents to continue to invest in our HYPE treasury strategy. For the quarter, we spent approximately $160 million on HYPE purchases. As a result, our cash and cash equivalents at March 31st is significantly lower than our balance was at December 31st. At $113.1 million still provides us a significant amount of flexibility to continue to both affect our treasury strategy and explore other opportunities.

[Brett Beldner, CFO at Hyperliquid Strategies Inc]

Our HYPE digital assets position on March 31st was approximately $689 million, reflecting an increase from December that relates to both the acquisition of new tokens, both from purchases and staking rewards, as well as the appreciation of previously owned and purchased tokens. On March 31st, 2026, we held approximately $18.8 million HYPE tokens, up from approximately $12.9 million in December. On the liability side, we continue to operate with no meaningful leverage. The obligations that exist primarily relate to the deferred tax liability that I have previously discussed, combined with the current obligations of both our operating business and the wind down and sale of the majority of Sonnet's assets. The result is an equity or net asset position as of the end of the quarter of approximately $743.5 billion.

[Brett Beldner, CFO at Hyperliquid Strategies Inc]

Moving on from our performance, we continue to believe it's important to be transparent about the execution of our treasury strategy, and would like to once again highlight that we regularly provide updated relevant information on our website, hypestrat.xyz/dashboard. Once we file our 10-Q, which we expect to occur in short order, our dashboard will be updated with our latest reported figures, as well as information on our share issuance and HYPE purchases up through May 5th, 2026. We would also like to highlight that we have updated our adjusted net asset value information since our last call to provide two numbers. Our adjusted net asset value per share, including the deferred tax liability, and a calculation of the net asset value per share excluding the deferred tax liability.

[Brett Beldner, CFO at Hyperliquid Strategies Inc]

In our continued outreach and discussion with investors, our understanding is that these numbers may provide meaningful information for their evaluation of our company, and in line with our continued belief in transparency, are being provided. With that, I'll turn it back to David for some closing remarks.

[David Schamis, CEO at Hyperliquid Strategies Inc]

Thanks, Brett. As you can tell, we continue to be very excited about Hyperliquid, the ecosystem around it, and the role that we are playing in it. We hope that role expands over time. Today we are a DAT. We will continue to be a DAP for a long time, but we will continue to find more and more ways to expand our earnings, expand our revenue stream by participating in more and more ways in the ecosystem. With that, I would like to turn it over to any questions from the participants.

[Operator]

Thank you. 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 Bill Papanastasiou from Chardan. Please unmute your line and ask your question.

[Bill Papanastasiou, Senior Research Analyst of Digital Assets at Chardan]

Good evening. Thanks for taking my questions. It seems like the narrative is shifting from Hyperliquid being more than just a perps exchange. I'm curious how conversations are evolving with institutional players following the launch of pre-IPO markets and HIP-4. Any color there would be greatly appreciated. Thanks.

[David Schamis, CEO at Hyperliquid Strategies Inc]

Yeah, look, first of all, Bill, thanks for joining. I would say the people we speak with on the investor side, there's a very wide range when it comes to knowledge and understanding of Hyperliquid. There are some who are very deep in the ecosystem, who are very crypto native, understand this extremely well, and when we speak to them, they say, "You know, we get the whole HIP-3 thing. Let's talk about HIP-4, let's talk about pre-IPO," which I'm gonna talk more about in 1 second. There's also people we get on the phone with or get on video with who really have no idea what Hyperliquid is. They probably know what Bitcoin and Ethereum is, and we are really starting from the ground up with an education of what it is.

[David Schamis, CEO at Hyperliquid Strategies Inc]

We really think a big part of our role here in the ecosystem is spending time with the sort of TradFi financial services and exchanges, equity investors, to have them appreciate that this is something they should be spending time on, and we're doing a lot of that. I think the answer is there's a wide range of outcomes and interest from people. I think that almost to a person, it's hard to find people that don't find what's gone on in HIP-3 to be interesting. You know, it, as we've said, this isn't now something that we hope might happen in the future. This is something happening real, having real effects on markets and world events, like the Iran conflict. That's exciting people.

[David Schamis, CEO at Hyperliquid Strategies Inc]

HIP-4 is just so topical because of prediction markets, because of Kalshi and Polymarket are always doing something every single day that's newsworthy. The pre-IPO markets that TradeXYZ is launching, I personally can't be more excited about. I've talked about this in the past. I've tweeted about this. I still have scars from an IPO that happened like 15 years ago that I was an investor in where, I thought that the bankers didn't do a great job in representing us as a client. One thing that we really could have used was some price discovery before the actual pricing of that IPO.

[David Schamis, CEO at Hyperliquid Strategies Inc]

I think that, having that price discovery with, in real markets, with real money changing hands leading up to an IPO will be very, very valuable and actually move the needle for venture capitalists and their ability to make assumptions around exits. The investments they can make because of that. I think this is not, this is not a footnote. This is a really interesting thing that might actually affect venture capital investment, jumpstart ingenuity, all around the world.

[Bill Papanastasiou, Senior Research Analyst of Digital Assets at Chardan]

Sounds like there's a lot to be excited for. Then if I can fit one more in. Congratulations first on the news with Unit. David, maybe you can just help us frame how you see that relationship growing over time. Do you think that there are more opportunities to work with what is essentially what is the leading market player in the Hyperliquid ecosystem? How are you thinking about that?

[David Schamis, CEO at Hyperliquid Strategies Inc]

Yeah, I think the answer is almost certainly yes. First of all, we are definitely proud to be partnering with Unit and Trade XYZ on this. Outside of the Hyperliquid team themselves, I think the Unit/Trade XYZ team is the most respected and most successful in the Hyperliquid ecosystem. They're also people I think that are careful as to who they do business with. They're not gonna attach their name and attach their brand to anybody. We are both thrilled and proud to be associated with them more formally right now. I think there's certainly things we can do more with them. I can't sit here and say what those are or promise what they're gonna be going forward.

[David Schamis, CEO at Hyperliquid Strategies Inc]

When you put smart people in a room, and sometimes we join those smart people, good ideas often come out of it. The answer is, no nothing is cooking that we're about to announce tomorrow or the next day. Yes, I think that we would love to find opportunities to work with them in ways that are mutually accretive.

[Bill Papanastasiou, Senior Research Analyst of Digital Assets at Chardan]

Appreciate all the color and congrats on all the success. Thank you.

[David Schamis, CEO at Hyperliquid Strategies Inc]

Thank you.

[Operator]

Our next question will come from Matthew Galinko with Maxim Group.

[David Schamis, CEO at Hyperliquid Strategies Inc]

Hello, Matt.

[Matthew Galinko, SVP and Senior Equity Research Analyst at Maxim Group]

Hey, good afternoon, guys. Thanks for taking my questions. First off, congrats on the effective treasury operations. I was wondering, just given about a $100 million cash balance, what do you think is kind of the right level to hold versus turning that into, you know, staked HYPE? What kind of the lowest balance you'd be comfortable holding?

[David Schamis, CEO at Hyperliquid Strategies Inc]

It's a great question. I feel like you might've been a fly on the wall at our board meeting yesterday because this was a hot topic that was discussed and debated. It's timely I get that question. I think. Let me give you some broad opinions here. One, we think that $25 million is sort of a bare minimum we would ever consider in home cash. We think we wanna have multiple years of operating expenses sitting in cash, so we will in no case ever have to issue equity in any sort of stressed environment to be able to keep the lights on. I think to start with $25 million is the absolute bare minimum. Beyond that, we have to think hard about other opportunities.

[David Schamis, CEO at Hyperliquid Strategies Inc]

It's really a combination of other opportunities we may have to use that cash in the ecosystem. We're not gonna go out and buy a sports car maker or or an internet company. Other opportunities that, you know, in the ecosystem, that can make sense. Cash to put into buying additional HYPE if there's significant drawdown or some sort of dislocation. We think that, you know, the valuations are at levels that we truly can't help ourselves. It's really some number above 25. I think 100. Again, if you were in the board meeting yesterday, some people thought that was too high, some people thought that was too low, some people thought that it was just right. We're really thinking hard about that.

[David Schamis, CEO at Hyperliquid Strategies Inc]

I will tell you that is an ongoing discussion we're having while we continue to pretty consistently be buying the token in the market as we've been doing. The answer is beyond 25. I don't have a magic number to focus on. I think that the other thing, of course, is this is not a static analysis. Every day, the value of our tokens change. When the value of our tokens go up, the percentage of cash as a percentage of our total capital goes down, and obviously the opposite happens vice versa. We're watching all those things while consistently buying tokens and think about where the right place to end up is. That, I don't mean to punt, but it's not like I have a secret number in my back pocket I'm not telling you.

[David Schamis, CEO at Hyperliquid Strategies Inc]

It's something we think about all the time.

[Matthew Galinko, SVP and Senior Equity Research Analyst at Maxim Group]

No, that's a great answer, and I appreciate the color. Maybe just as a follow-up to that, given another DAT that kinda talked this quarter about selling the digital asset if they trade below one on an MNAV basis to accrete their token. You know, again, the idea was selling Bitcoin and to buy back the com. Can you maybe relate to that, just given, you know, your discussions around treasury management? In a scenario where you're low one or meaningfully below one, does that math make sense to you to, you know, sell the token to buy back the common? You know, if you do draw down the cash balance kinda to a bare minimum level. Just kinda wanna know how you think about that environment. Thank you.

[David Schamis, CEO at Hyperliquid Strategies Inc]

Yeah, look, I would say that we are corporate finance geeks before we are crypto zealots is the way I would describe us. Doesn't mean we're not spending lots of time and lot of brain cells thinking about crypto and being and thrilled to be in the middle of this. We're corporate finance geeks. What I mean by that is, when our token was trading Sorry, not our token, excuse me. When our stock was trading at a discount, a pretty meaningful discount mostly in the month of December, we did use cash to buy it back. We got some accretion there. That's something, certainly something we have done. In the future, to the extent I'll paint the picture that you started with.

[David Schamis, CEO at Hyperliquid Strategies Inc]

If there's a time in the future where we are down to that minimum level of cash and our stock is trading at a serious discount, we would definitely consider selling tokens to do that. We don't have a religious zealotry saying we would never, ever sell a token under any circumstances. We don't wanna do that. We don't think that'll be good for us. We don't think that'd be great for this, for the ecosystem. We don't think that's good for a lot of reasons, and that's one of the reasons we like having excess cash beyond the $25 million. If you're asking me, you know, gun to your head, would you do that or would you know, jump out of a window first, the answer is absolutely we would do that.

[David Schamis, CEO at Hyperliquid Strategies Inc]

It's a little different than Strategy, I think. MicroStrategy or Strategy, I think, talked about selling tokens because they need cash to make debt payments, I think. You, you're probably more of an expert on the latest going-ons there than I am. Obviously that's different from us. We don't have any debt. So, it's just different.

[Matthew Galinko, SVP and Senior Equity Research Analyst at Maxim Group]

Great. Thank you. I'll jump back in the queue.

[David Schamis, CEO at Hyperliquid Strategies Inc]

Thanks, Matt.

[Operator]

We currently have one question from Brian Vieten at Seabird that I will be reading out. Here's the question. "Has there been any update to the treasury strategy as far as the 1.1x by 0.9x MNAV bands and your calc of MNAV? I know there was an update to the MNAV calc recently based on your dividend. Curious if there's any others you'd call out that impacts that original framework?

[David Schamis, CEO at Hyperliquid Strategies Inc]

I think I understand the question. The 0.9-1.1 band, we haven't changed that. We don't have an update to that. I will say, as we've said from the beginning, that is somewhat art, not science. It doesn't mean at 1.11 we are up selling shares like crazy, and at 0.8999 we're buying back our stock like crazy. That's really meant to give the public sort of the idea of how we think about it and how we focus on it when we start getting attention. I will tell you, though, the more things we're doing to generate additional revenues in the ecosystem and the more successful those things become, I would say both those numbers will be going up over time. I think that it's sort of an obvious statement, right?

[David Schamis, CEO at Hyperliquid Strategies Inc]

If we have significant additional businesses that are generating significant revenues and earnings outside of just the token and the staking, that would imply we have, in a sort of a sum of the parts analysis, our company is worth more than just the tokens sitting on the balance sheet, and therefore we should be more stingy with selling our tokens and the multiples we would sell at. The answer is we have not changed that thought today, the 0.9-1.1, but that is far from written in stone, both going forward from a, you know, thinking about those numbers, but also day to day and when we issue stock.

[Brett Beldner, CFO at Hyperliquid Strategies Inc]

Yeah, just to clarify there, I think you said-

[David Schamis, CEO at Hyperliquid Strategies Inc]

Please clarify.

[Brett Beldner, CFO at Hyperliquid Strategies Inc]

Tokens once, and you meant shares.

[David Schamis, CEO at Hyperliquid Strategies Inc]

I-

[Brett Beldner, CFO at Hyperliquid Strategies Inc]

That conversation was about shares.

[David Schamis, CEO at Hyperliquid Strategies Inc]

It's all about shares. I'm sorry. I made that mistake too many times on this call. Yes. The tokens are always worth one time the value of the token. Any other questions?

[Operator]

We currently have no other hands raised. That concludes our question and answer portion of today's call, and I'll hand back the call to Hyperliquid Strategies for any written questions or closing remarks.

[David Schamis, CEO at Hyperliquid Strategies Inc]

I don't think we have any other written questions that have come in. We absolutely appreciate everyone who joined us. We certainly appreciate you taking an interest in our company, and more importantly, taking an interest in the Hyperliquid and the ecosystem around it, and we look forward to continuing to have these calls going forward. More importantly, we look forward to continuing to have live you know, highly up-to-date information available on our website and through other sources so that we can disclose as much as possible to the community as quickly as we can. That is really a key tenet in how we think about things. We wanna disclose as much as we can, as frequently as we can, as quickly as we can.

[David Schamis, CEO at Hyperliquid Strategies Inc]

Appreciate everyone doing this, and please reach out with any follow-up questions. We're always happy to talk.

Participants

Executives

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

Analysts

• Bill Papanastasiou, Senior Research Analyst of Digital Assets at Chardan
• Matthew Galinko, SVP and Senior Equity Research Analyst at Maxim Group