What Solana (HSDT) Said on Its Q3 Earnings Call

Key Points

• Revenue rose to $3.4 million from $697,000 a year earlier, as staking—including third-party delegations to its Pacific Backbone validator—generated $3.3 million. Delegated stake reached about 1.5 million SOL by November 3, though management cautioned growth may slow as it evaluates expansion and certification.
• Solana reported $105.2 million in net income, versus a $352.8 million loss a year earlier, largely because rising SOL prices produced a $102.7 million unrealized gain on digital assets. The result therefore reflected asset-price gains, not just operating performance.
• The company held about 2.4 million SOL, valued at approximately $288 million at quarter-end, and its treasury earned a 5.9% annualized net staking yield. A share offering generated $14.3 million, which was used to buy about 125,000 SOL.

Solana NASDAQ: HSDT reported third-quarter revenue of $3.4 million, up from $697,000 a year earlier, as its validator infrastructure began earning revenue from third-party staking. The company also posted net income of $105.2 million, driven largely by an unrealized gain on its digital assets as the price of SOL rose.

The company earned $3.3 million in staking revenue during the quarter ended September 30, including rewards from its own treasury and revenue from third-party stake on its Pacific Backbone validator. Revenue rose from $2.5 million in the second quarter of 2026.

Chairman and CEO Joseph Chee said the quarter marked a shift for the company’s infrastructure business from construction to operation. “Third-party stake on Pacific Backbone is live and now contributing to our staking revenue,” he said.

Validator Stake Exceeds Expectations

Pacific Backbone had approximately 1.3 million SOL delegated to it at September 30, including 1 million SOL from third parties, Chee said. Total delegated stake grew to approximately 1.5 million SOL as of November 3.

Chee told analysts that third-party stake had grown faster than expected after external delegation began in late July, while the infrastructure was still in beta. He cautioned that the pace of growth could slow in the fourth quarter as the company assesses another location and pursues certification.

The company is assessing Hong Kong as its next validator location and is targeting ISO 27001 certification in the fourth quarter. Chee also said Solana had been selected as a strategic enterprise by Hong Kong’s Office for Attracting Strategic Enterprises and expects to establish a headquarters in the city.

Solana’s Tokyo cluster runs on three machines operating as a single validator. Beyond infrastructure, Chee said the company held more than 40 institutional education sessions and workshops during the quarter and continues to develop an AI-powered orchestration and compliance platform.

Higher SOL Price Drives Earnings

Chief Financial Officer Madelene Gani said third-quarter gross profit was $2.7 million, representing a gross margin of approximately 82%. General and administrative expenses fell to $3.4 million from $11.1 million in the second quarter, which included approximately $6.8 million in nonrecurring severance associated with the PoNS divestiture.

The company recorded a $102.7 million unrealized gain on digital assets and digital asset receivables during the quarter. Director Cosmo Jiang said SOL rose approximately 60% during the period, from roughly $74 to roughly $118.

Net income of $105.2 million compared with a net loss of $352.8 million in the third quarter of 2025. For the first nine months of 2026, Solana reported revenue of $9.5 million and a net loss of $24.9 million.

Asked about future operating expenses, Gani said the company does not provide forward-looking expense guidance. She said Solana continues to optimize general and administrative costs but would expect expenses to increase as the business grows, with costs potentially normalizing between current and historical levels.

Treasury Yield and Capital Allocation

Solana’s treasury holdings generated an average net staking yield of 5.9% annualized in the third quarter, compared with a network average of approximately 4.9%, Jiang said. He attributed the outperformance to validator selection, active capture of maximal extractable value, or MEV, and rebalancing.

During the question-and-answer session, Jiang said approximately 5.1 percentage points of the yield came from inflationary rewards or emissions, about 50 basis points from block rewards and about 20 basis points from MEV. He said the company expects to maintain some performance advantage, but the gap could fluctuate as validator economics and techniques change.

Solana repurchased 1.4 million shares during the quarter for approximately $2.8 million, at an average price of $1.96 per share, Jiang said. On September 30, the company priced an offering of approximately 4.37 million shares at $3.433 per share, which it said represented a 5% premium to net asset value per share. The offering closed October 1 and included warrants to purchase an equal number of shares.

The offering generated approximately $14.3 million in net proceeds, which the company used to purchase approximately 125,000 SOL. Gani said Solana also repurchased approximately 1.96 million shares for $4.4 million after quarter-end.

As of September 30, Solana held approximately 2.4 million SOL across its holdings, staked positions and receivables, with a fair value of approximately $288 million, Jiang said. The company also reported a $15 million payable for unsettled SOL purchases.

About Solana (NASDAQ:HSDT)

Solana is a digital asset company focused on building a treasury centered on Solana's native cryptocurrency, SOL. Its activities include acquiring and holding SOL and developing strategies intended to provide investors with exposure to the Solana blockchain ecosystem through a publicly traded company. The company is associated with the Solana network, a blockchain platform designed to support decentralized applications, digital assets and smart contracts. Its business may also include participating in the broader Solana ecosystem and pursuing opportunities related to blockchain infrastructure and digital asset growth.

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