Verb Technology NASDAQ: TONX, referred to as TON Strategy Company on its earnings call, reported lower third-quarter revenue but higher operating income as a reduction in expenses more than offset weaker prices for Gram, the digital asset at the center of its treasury strategy.
Revenue for the quarter ended Sept. 30, 2026, fell to $13.1 million from $15 million in the second quarter. Chief Financial Officer and Chief Operating Officer Sarah Olsen said revenue primarily consisted of staking rewards valued at the price of Gram when earned. The company earned approximately the same number of tokens as in the prior quarter, but lower prices reduced their reported value.
Operating income from continuing operations rose to $4 million from approximately $0.5 million in the second quarter. However, the company reported a $22.9 million pretax loss from continuing operations, compared with pretax income of approximately $83.5 million in the prior quarter, largely reflecting a swing in the fair value of its digital assets.
Staking Rewards and Treasury Holdings
TON Strategy held approximately 235.1 million Gram at Sept. 30, with about 232.9 million, or 99%, deployed in staking. Its treasury earned approximately 9.4 million Gram during the quarter, generating an annualized gross staking yield of approximately 16%, Chief Executive Officer Kevin Wilson said.
Wilson attributed the elevated yield in part to TON network upgrades introduced in April that shortened block production times and increased validator reward issuance. The company’s net treasury position increased by approximately 4.6 million Gram during the quarter after other activity, including sales to support U.S. dollar liquidity.
The reported fair value of the company’s digital assets fell to approximately $348.5 million at Sept. 30 from $369.5 million at June 30. The third-quarter results included a $27.2 million net loss from changes in the fair value of Gram holdings, compared with an $82.8 million net gain from digital asset fair value changes in the second quarter. Olsen said the adjustments were not cash operating expenses.
Of the company’s Gram holdings, 119.1 million were classified as restricted and 116 million as unrestricted. Olsen said restricted tokens can still be staked and earn rewards but cannot be transferred or sold while restrictions remain in effect.
Expenses Fall as Repurchases Continue
Total operating expenses declined 39% sequentially to $8.4 million. Olsen cited lower Kingsway-related advisory fees, personnel costs and professional services expenses, as well as elevated noncash expenses in the prior quarter. Higher legal fees related to ongoing litigation partly offset those savings.
The company repurchased approximately 1.8 million common shares for $5.7 million during the third quarter under an existing $250 million authorization. Basic common shares outstanding fell to 55.4 million from 56.5 million at June 30, with repurchases partly offset by shares issued in connection with vested equity awards.
TON Strategy held approximately 4.24 Gram per common share at quarter-end, up 9% from 3.89 at Dec. 31, 2025. Wilson said the company would continue to evaluate repurchases against considerations including cash liquidity, the productivity of its staked treasury and potential costs associated with selling Gram.
Cash and restricted cash totaled approximately $25.3 million at Sept. 30, down from $29 million at June 30. The company had no outstanding debt. Olsen said management targets approximately 12 months of U.S. dollar liquidity to cover operating expenses, cost of goods sold and contra-revenue obligations.
Telegram Wallet Rollout in Focus
Wilson said TON validators, including TON Strategy, approved network upgrades during the quarter to support Telegram’s native Gram wallet and increase transaction capacity. Telegram began a limited rollout of the self-custodial wallet, called Money, during the quarter, he said.
Money is built into the Telegram application and allows users with access to send Gram to contacts without entering a blockchain address, Wilson said. He added that Telegram sponsors network fees for up to five eligible transfers daily.
Wilson said investors should watch wallet activations, recurring usage, transactions per user and retention, as well as payment volumes and applications incorporating wallet functionality. “We want to see genuine economic utility more than simply growth in wallet numbers,” he said.
On the company’s legacy operations, Olsen said the wind-down was substantially complete. Barring unforeseen expenses, she expects operating expenses associated with the discontinued business to be no more than $150,000 in 2027.
About Verb Technology (NASDAQ:TONX)
Verb Technology Company, Inc. 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.
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