SharpLink Gaming Q3 2026 Earnings Call Transcript

SharpLink Gaming (NASDAQ:SBET) reported third-quarter financial results on Monday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

SharpLink Gaming reported strong financial performance in Q3 2026, driven by a 72% appreciation in ETH price and double-digit revenue growth.

The company continues to accelerate its strategic initiatives within the Ethereum ecosystem, including a $200 million ETH allocation staked through Lido and a $125 million commitment to the Galaxy SharpLink Gaming On-Chain Yield Fund.

SharpLink Gaming’s ETH holdings increased to 895,117 ETH by November 2, 2026, with a net fair value of $1.6 billion as of September 30, 2026.

The company recorded a net income of $751.4 million for Q3 2026, significantly higher than the prior-year quarter, driven by unrealized gains and realized gains from various ETH treasury strategies.

SharpLink Gaming focuses on growing ETH per share through disciplined capital allocation, including strategic investments in Ethereum infrastructure companies like Block Space.

Management highlighted the importance of Ethereum’s expanding institutional adoption and ongoing technological advancements, such as the upcoming Glamsterdam protocol upgrade.

The company is poised to benefit from trends like stablecoin circulation and tokenization, as well as regulatory clarity in the U.S. and abroad, which supports broader institutional adoption.

Full Transcript

OPERATOR

Good morning everyone and thank you for participating in today’s conference call to discuss SharpLink Gaming’s financial and operating results for the third quarter that ended September 30, 2026. By now, everyone should have access to the third quarter 2026 earnings press release which was issued this morning at approximately 8:00 a.m. Eastern Time. The release is available in the Investor Relations section of SharpLink Gaming’s website. This call will also be available for webcast replay on SharpLink Gaming’s website.

Following management’s prepared remarks, we will open the call for questions. I will now hand the call over to SharpLink Gaming’s Vice President of Business and Legal Affairs, Jody Handy, for introductory comments.

Jody Handy (Vice President of Business and Legal Affairs)

Thank you, operator. Please see SharpLink Gaming’s Quarterly Report on Form 10‑Q filed this past Friday, November 6, 2026 with the SEC, along with the earnings press release that crossed the wire this morning at 8:30. These documents list some of the factors that may cause the results of SharpLink Gaming to differ materially from what we say today and identify some of the risks and uncertainties that could affect our business prospects and future results.

SharpLink Gaming assumes no duty and does not undertake to update any forward‑looking statements. Any forward‑looking statements made by us during this call are based only on information currently available to us and speak only as of the date when they are made. In addition, we may be discussing or providing certain metrics today, such as ETH per share and other treasury‑related performance metrics that are not GAAP measures. Please see our earnings press release and our SEC filings for further information regarding these metrics.

To set the agenda for today’s call, we will begin with Joe Lubin, SharpLink Gaming’s Chairman of the Board, Co‑Founder of Ethereum and Chairman and CEO of MetaMask. Joe will comment on key developments and emerging trends within the greater Ethereum ecosystem. Next, SharpLink Gaming’s Chief Executive Officer Joseph Shalom will review our third quarter operating and strategic achievements, highlighting how we are translating Ethereum’s growing institutional adoption into tangible opportunities for SharpLink Gaming and its stockholders.

Finally, our Chief Financial Officer, Bob Delucia, will recap SharpLink Gaming’s third quarter financial results, liquidity position and key ETH treasury performance metrics. So with that, I would now like to turn the call over to SharpLink Gaming’s Chairman, Joe Lubin. Joe, the floor is yours.

Joe Lubin (Chairman of the Board)

Thank you, Jody, and good morning everyone. Ethereum continues to evolve from a pioneering blockchain network into foundational infrastructure for an increasingly programmable global financial system. Its combination of security, credible neutrality, composability, and next‑generation trust infrastructure via rigorous decentralization provides shared financial infrastructure that institutions can build upon without relying on commercial intermediaries.

Stablecoins, tokenized real‑world assets, and decentralized financial applications are increasingly operating on Ethereum, strengthening its already dominant network effects and expanding its role in the global economy. The scale of Ethereum’s existing financial ecosystem, including layer‑2 networks, demonstrates its leadership. Approximately $153 billion in stablecoin supply is supported by the broader Ethereum ecosystem. Approximately $17 billion in tokenized real‑world asset active AUM representing approximately 55% of the tracked market. More than $58 billion in DeFi total value locked representing approximately 65% of the global DeFi TVL. Approximately 1.8 million transactions per day on Ethereum mainnet.

Not counting the large amount of additional activity across its layer‑2 ecosystem, we believe Ethereum’s 11‑year track record of security, credible neutrality, and reliable execution has established a foundation of trust that is particularly important for institutional adoption. Unlike proprietary financial networks controlled by individual intermediaries, Ethereum provides neutral infrastructure that competitive institutions can build upon with confidence.

Combined with its deep liquidity and extensive developer ecosystem, these characteristics reinforce Ethereum’s position as foundational infrastructure for the next generation of global finance. One of the most significant developments during Q3 and subsequent to quarter end has been the continued acceleration of institutional adoption, with some of the world’s largest financial institutions deploying live financial applications directly on Ethereum. JPMorgan expanded JPM Coin JPMD, its institutional deposit token, to Ethereum mainnet on October 19, complementing its existing deployment on the Base network.

The bank specifically cited Ethereum’s deep on‑chain liquidity and established tokenized asset ecosystem as key reasons for the expansion, demonstrating how major financial institutions are moving beyond experimentation and increasingly utilizing Ethereum to support real‑world financial activity. Morgan Stanley expanded access to ETH through the July launch of its Ethereum Trust msse, an exchange‑traded investment product incorporating Ethereum staking, as well as the rollout of direct currency trading on E*TRADE.

Revolut, which serves more than 75 million customers globally, introduced phased testing of its euro‑backed EUR stablecoin on Ethereum in August, demonstrating Ethereum’s expanding role in programmable money and digital payments. ARK Invest announced the tokenization of its approximately $1.3 billion ARK Venture Fund on Ethereum in September, bringing a traditional investment strategy involving private and public growth companies onto blockchain infrastructure.

Institutional adoption is also accelerating across other major financial platforms. In August, BlackRock expanded its tokenization initiatives with the launch of Ethereum‑based share classes for select European UCITS money market funds alongside two new U.S. tokenized money market products, the STBL and BRSRV. Crédit Agricole also introduced EurXT, a euro‑denominated stablecoin issued on Ethereum. These developments demonstrate Ethereum’s expanding role across institutional asset management, payments, and financial market infrastructure, with major financial institutions increasingly choosing Ethereum to support real‑world financial applications.

As more institutions bring assets, liquidity, and financial activity on‑chain, we believe Ethereum’s network effects will continue strengthening, reinforcing its position as foundational infrastructure for the next generation of global finance. Alongside accelerating institutional adoption, Ethereum continues to advance its protocol roadmap to support significantly greater transaction volumes, improve efficiency, and strengthen long‑term resilience. Following the successful implementation of previous network upgrades, Ethereum continues to advance towards Glamsterdam, its next major protocol update. Glamsterdam is designed to improve Ethereum’s ability to process more transactions in parallel and therefore more efficiently, while reducing reliance on trusted third parties outside the protocol that emerged to support the separation of the block proposer and block builder roles.

These improvements reinforce one of Ethereum’s greatest competitive advantages—its commitment to credible neutrality, decentralization, and censorship resistance at scale. By bringing more of the block‑building process directly into Ethereum’s protocol, Glamsterdam will help strengthen the network’s neutrality, independence, and resilience. As adoption accelerates, Ethereum is demonstrating that it can expand its capacity to support global financial markets without compromising the foundational principles of openness, neutrality, and protocol‑based decentralized trust that have made it the leading platform for institutional adoption. In September, the Ethereum Foundation outlined an ambitious technical roadmap targeting quantum resistance across Ethereum’s execution, consensus, and data layers by December 2029.

The roadmap also prioritizes faster finality, privacy enhancements, and zero‑knowledge execution, reinforcing Ethereum’s commitment to scaling while preserving security and decentralization. Together, these initiatives reflect Ethereum’s commitment to becoming the foundational infrastructure for global finance, delivering greater speed, capacity, and efficiency without compromising the security, credible neutrality, and decentralization that distinguish the network.

We believe Ethereum’s continued ability to evolve technologically while maintaining its core principles will be an important differentiator as institutional adoption accelerates. Ethereum’s expanding institutional adoption and ongoing technological advancements strengthen our conviction in its long‑term role as foundational infrastructure for the global digital economy. As financial activity increasingly moves on‑chain, ETH remains integral to securing the network, facilitating transactions, and supporting the broader ecosystem of programmable financial applications. SharpLink Gaming is strategically positioned to participate in Ethereum’s next phase of growth through its actively managed ETH treasury, institutional expertise, and commitment to supporting the Ethereum ecosystem’s continued development.

Before I hand the call over to Joseph, I also want to briefly address the recent sale of SharpLink Gaming shares by ConsenSys Software Inc. While ConsenSys/MetaMask sold approximately 5.7 million common shares in October to better support its operating business, I want to emphasize that I did not sell any of my personal holdings. I have not sold any shares and continue to own over 5 million SharpLink Gaming shares personally, and ConsenSys and its affiliates retain significant additional equity interests in the company.

As one of SharpLink Gaming’s largest shareholders and its Chairman, my conviction in our strategy and in the long‑term Ethereum opportunity is as strong as ever. I’m fully committed to supporting SharpLink Gaming’s continued growth and believe we are exceptionally well positioned to create meaningful long‑term value for our shareholders. With that, I’d like to turn the call over to our Chief Executive Officer, Joseph Shalom, to discuss how SharpLink Gaming is translating this opportunity into disciplined execution and long‑term shareholder value. Joseph.

Joseph Chalom (Chief Executive Officer)

Thank you, Joe. Good morning, everyone, and thank you for joining us. The third quarter represented an important turning point for the Ethereum ecosystem and SharpLink Gaming, highlighted by a meaningful recovery in the price of ETH, strong financial performance, and continued execution of our long-term strategy. ETH appreciated approximately 72% during the third quarter, increasing from approximately $1,563 at the end of June to $2,681 as of September 30, 2026.

SharpLink Gaming delivered double-digit revenue growth and materially higher net income compared to Q3 2025, benefiting from the appreciation of ETH and continued execution of our treasury strategy. The combination of growing staking revenue and a disciplined operating cost structure reinforces the operating leverage inherent in our treasury platform. Beyond the financial results, SharpLink Gaming has made meaningful progress advancing several strategic initiatives designed to strengthen Ethereum’s ecosystem, generate additional ETH, and create long-term value for our shareholders. During the quarter, SharpLink Gaming continued to expand its leadership role within the Ethereum ecosystem, supporting initiatives designed to accelerate institutional adoption and strengthen the infrastructure underpinning Ethereum’s next phase of growth.

In addition to our previously announced support for ETH Labs, Ethereum Institutional, and ETH Systems, we made a strategic equity investment in Block Space, an Ethereum infrastructure company focused on validation and staking infrastructure. This investment further reinforces our commitment to supporting innovation and long-term growth across the Ethereum ecosystem. Collectively, these organizations help establish the technological, institutional, and operational foundations necessary for Ethereum to support a substantially larger share of global financial activity.

SharpLink Gaming’s involvement extends beyond providing financial support. It leverages our relationships, institutional expertise, and broader ecosystem connectivity to support their development. Given our scale and position, SharpLink Gaming has an important opportunity to serve as a bridge between traditional finance and the Ethereum ecosystem, helping advance adoption while remaining focused on creating long-term value for our stockholders. Ultimately, our objective is to position SharpLink Gaming to benefit from Ethereum’s expanding economic activity while identifying opportunities to grow ETH per share.

A central component of SharpLink Gaming’s strategy is utilizing our ETH holdings as productive operating assets rather than simply maintaining passive exposure to Ethereum. A key advantage is our access to permanent capital, which enables us to pursue longer-term structured ETH deployments that may not fit other investor mandates. Unlike capital that requires frequent withdrawals or rapid turnover, we can commit our ETH for multi-year periods, providing emerging on-chain protocols with the patient liquidity needed to establish and scale their operations.

In return, we can negotiate differentiated economics designed to generate incremental ETH for our stockholders while supporting the development of the broader ecosystem. We’re focused on identifying these differentiated opportunities to deploy our treasury, generate additional ETH, and enhance long-term stockholder value. During the quarter, we made meaningful progress activating several previously announced initiatives. In August, SharpLink Gaming announced a $200 million ETH allocation staked through Lido, further expanding our liquid staking capabilities. This deployment enables us to earn ETH staking rewards while maintaining flexibility to utilize tokenized staking positions across Ethereum’s broader financial ecosystem.

The allocation further diversifies our staking infrastructure and enhances our ability to evaluate additional on-chain opportunities, including using a portion of our Lido-wrapped staked ETH as collateral to capitalize our Galaxy SharpLink Gaming On-Chain Yield Fund commitment. In August, the Galaxy SharpLink Gaming On-Chain Yield Fund launched with $125 million of initial commitments, including $100 million from SharpLink Gaming and $25 million from Galaxy Digital.

In Q3, the fund began deploying capital into on-chain investment opportunities, representing an important milestone in activating this strategy. We are in the beginning of a new phase we call On-Chain Finance 2.0. As more assets become tokenized, we expect RWA protocols to emerge to provide liquidity for trading and lending these assets. Additionally, new protocols continue to emerge as improved on-chain liquidity venues. However, these protocols will often have a cold-start problem and need quality initial liquidity to ensure users have a good experience, enabling asset growth on their platforms.

By offering what we think of as Jumpstart Capital out of the Galaxy SharpLink Gaming Fund, we can help solve this problem as more stablecoins and tokenized assets move on chain. This is part of how we want to put our ETH to work. Turning to broader capital allocation, growing ETH per share continues to be our North Star, and we evaluate opportunities based on their ability to enhance stockholder value. As we disclosed on our last earnings call in June, SharpLink Gaming completed a $75 million registered direct financing at a premium to NAV, with attached warrants providing additional capital to acquire ETH and repurchase shares. During the third quarter, SharpLink Gaming did not issue shares through its ATM program, reflecting our disciplined approach to raising capital and commitment to avoiding transactions that would dilute ETH exposure per share.

We remain focused on maintaining flexibility across capital markets activities, including opportunistic financing, share repurchases, and additional ETH acquisitions. When market conditions support stockholder accretion, our capital allocation decisions will continue to be guided by the economics of each opportunity and their potential to drive long-term value per share. Looking ahead, SharpLink Gaming is evaluating strategic opportunities across the digital asset ecosystem that could further expand our capabilities and take advantage of both our operating platform and permanent capital. These could include operating businesses that address important industry needs, create additional sources of revenue, or enable us to deploy our balance sheet better. We intend to remain selective, prioritizing opportunities that complement our ETH treasury strategy, meet our disciplined financial criteria, and offer compelling potential for long-term stockholder value creation.

The third quarter also brought meaningful developments across the global regulatory landscape, further supporting the institutional adoption of digital assets. While comprehensive market structure legislation in the United States remains unfinished following the Senate’s failure to advance the Clarity Act, we believe it’s highly unlikely to be reintroduced given the results of last week’s election. That said, the SEC has advanced critical initiatives addressing tokenized securities, digital asset custody, and pathways for broader institutional participation.

Most notably, it has published an innovation exemption allowing for tokenization of U.S.-listed stocks and their trading on chain through SEC-supervised venues built on public blockchains such as Ethereum. The SEC also proposed updating its transfer agency rules so that a blockchain can serve as a company’s official record of stockholders. U.S. federal regulators continue their work in implementing the Genius Act stablecoin regulatory framework. On October 21, the Office of the Comptroller of the Currency issued its final rule for the stablecoin issuers it oversees.

The rule sets clear standards for the reserves behind each stablecoin, how holders can redeem them, and how issuers manage risk. The Genius Act and the OCC’s rule both take effect on January 18, 2027, when payment stablecoins in the U.S. come under a federal framework for the first time. That gives banks, payment companies, and asset managers the clarity they need to issue and use stablecoins at scale. The CFTC has also continued efforts to provide greater clarity around oversight and the operation of digital asset markets.

The CFTC has continued to open U.S. derivative markets to digital assets and tokenization. On November 3, it cleared perpetual futures on individual stocks to trade for the first time on exchanges registered with both the CFTC and the SEC. That builds on its approval of the first crypto perpetual futures contract in May. The CFTC has also made it easier to use digital assets as collateral. We believe these U.S. developments are increasingly important for banks, asset managers, and other financial institutions evaluating how to incorporate blockchain technology into their operations.

Greater regulatory clarity can reduce uncertainty and help institutions move from exploring digital assets to implementing practical on-chain financial applications. Although there is additional work to complete, the direction of regulatory progress is encouraging. SharpLink Gaming’s strategy does not depend on any single legislative or regulatory outcome. We continue to operate within existing regulatory frameworks while positioning our business to benefit from the continued institutional adoption of Ethereum.

Moving beyond the U.S. regulatory landscape, I recently participated in Korea Blockchain Week in South Korea and Token 2049 in Singapore, which reinforced the growing momentum behind institutional adoption of Ethereum and digital assets globally. Having visited Asia five times over the last year, I’ve witnessed a notable shift in the conversation from retail trading towards institutional adoption and real-world financial applications. Throughout my travels in Asia, there was a clear impetus to not fall behind the U.S. from a digital asset innovation perspective.

In each country I visited, the priority is establishing the necessary regulatory foundations, including for local-denominated stablecoins, tokenized assets and trusted interoperable infrastructure, and clear rules for market participants. I had the opportunity to engage with sophisticated financial institutions, regulators, and policymakers, and it was encouraging to see the growing interest in Ethereum and its Layer 2 ecosystem as foundational infrastructure for this next phase of financial innovation.

These observations reinforce our conviction that Ethereum’s credibly neutral infrastructure is well positioned to support the next generation of global finance, further strengthening SharpLink Gaming’s long-term investment thesis and commitment to advancing the ecosystem. We continue to believe Ethereum is uniquely positioned to benefit from the convergence of four transformative trends. First, stablecoins are bringing programmable money on chain. Second, tokenization is enabling traditional financial assets to operate on blockchain infrastructure. Third, on-chain finance is creating new opportunities for assets to be traded, financed, and utilized in continuously operating markets. And fourth, AI agents bring automation and continuous attention on behalf of individuals and institutions.

We believe agentic finance represents one of the most compelling opportunities emerging at the intersection of artificial intelligence, blockchain technology, and global financial services. We’ve seen meaningful progress in the adoption of AI agents and the development of the infrastructure needed to support autonomous financial activity. AI agents are moving beyond simple information retrieval and becoming part of our everyday lives, helping consumers manage schedules, book travel, compare products, and make purchases.

On-chain activity is also beginning to demonstrate the potential scale of this emerging agentic economy. As an example, hundreds of millions of agent-to-agent transactions have been recorded through the X402 micropayment protocol, which enables AI agents to pay for services such as data, computing power, and access to AI models. These developments provide early evidence of a shift towards autonomous systems capable of executing transactions and managing financial activities on behalf of both individuals and institutions.

As financial activity becomes increasingly automated, these AI agents will require access to programmable money, tokenized assets, deep liquidity, and interoperable financial applications. We believe Ethereum is particularly well positioned to support this infrastructure given its established ecosystem and ability to facilitate financial activity across competing institutions and applications. Building on this thesis, in September SharpLink Gaming published research exploring the potential scale of agentic finance, including a long-term scenario in which approximately $4 trillion in annual financial services revenue could be reshaped by 2035. While the timing and scale of adoption remains uncertain, the research underscores the potentially significant economic opportunity emerging at the intersection of AI, blockchain technology, and global finance.

These developments are laying the foundation of what could become a multi-year institutional adoption cycle for Ethereum. Ethereum’s established liquidity, developer ecosystem, security, and credibly neutral infrastructure position it as compelling infrastructure for a more open and interconnected financial system. Its ability to support interoperable applications and programmable financial transactions offers meaningful advantages as traditional finance increasingly moves on chain.

Overall, Q3 represented a strong quarter for SharpLink Gaming, driven by Ether’s price appreciation, growth in our staking revenue, and continued execution of our strategic priorities. We expanded our ETH yield strategies, deepened our engagement across the Ethereum ecosystem, and strengthened our position to capitalize on emerging opportunities in institutional on-chain finance. Looking ahead, we’re focused on three priorities: growing ETH exposure per share through disciplined, stockholder-accretive capital allocation; deploying our treasury into differentiated opportunities designed to generate additional ETH and enhance the value of our holdings; and leveraging our institutional expertise, relationships, and strategic positioning to participate in Ethereum’s continued evolution as foundational global financial infrastructure. Our conviction in Ethereum’s long-term potential is as strong as ever. As institutional adoption accelerates and an increasing share of global financial activity moves on chain, we believe SharpLink Gaming is uniquely positioned to capitalize on this transformation.

By leveraging our institutional-grade treasury platform, strategic relationships, and disciplined capital allocation, we can compound ETH per share and create sustainable long-term value for our stockholders. Before I hand it over to Bob to take us through our Q3 financial results, I’d like to directly address the recent crypto exchange hacks. SharpLink Gaming has had no direct or indirect exposure to these incidents. SharpLink Gaming’s crypto assets are stored with U.S.-based qualified custodians, hardware-isolated systems—the same principle as cold storage. Incidents like these underscore the importance of continuously strengthening industry safeguards, reinforcing institutional-grade practices, and building the trust necessary to support broader institutional adoption and on-chain finance.

With that, I’ll turn the call over to Bob for a more detailed review of our third quarter financial results.

OPERATOR

Thank you. We will now be conducting a question-and-answer session. We ask that you please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

One moment please while we poll for questions. Our first question is from Devin Ryan with Citizens. Please proceed with your question.

Devin Ryan (Analyst)

Thank you so much. Good morning, everyone. Question on the progression of RWA on-chain, and I know, Joseph, you talked about SharpLink Gaming being a potential investor in protocols to accelerate Ethereum adoption. Curious if you would ever look to potentially purchase some of these protocols or be an acquirer of more infrastructure that connects to Ethereum, which would obviously bring in a different type of earnings stream, but potentially a more recurring earnings stream, and just how you guys are thinking about that over time to accelerate adoption.

I guess just a broader question too—just other things you’re doing with capital to accelerate adoption. Thanks. Hello? Not sure if I got cut off here.

Joseph Chalom (Chief Executive Officer)

Hey Devin, it’s Joseph. Sorry, we were on mute. I think we’ve shared earlier this summer that tokenization in RWA is probably the most exciting use case that institutions are pursuing, and the majority of that activity is happening on Ethereum. And we’re approaching it in two or three different ways. The first is the ecosystem investments we’ve made in the Ethereum ecosystem with ETH Labs, ETH Systems, and Ethereum Institutional. They are engaging with hundreds of financial institutions who are going to be the primary issuers and buyers of RWA. So that’s number one. Second is Ethereum is the leading blockchain for tokenization—the last we checked, over 50% of all tokenization issuance is happening in that ecosystem. At the same time, we’ve shared with you that the Galaxy SharpLink On-Chain Yield Fund is deploying into Ethereum ecosystem protocols.

Some of them will be RWA-oriented. The fund started making its first allocations to protocols in late Q3, and there are opportunities either to participate in RWA issuance ourselves by being buyers for yield, or potentially to acquire these types of protocols. So I think we’re taking a multifaceted approach. Nothing to announce on today’s call.

Devin Ryan (Analyst)

Got it. Thank you, Joseph. And then as a follow-up, obviously now SharpLink Gaming has native staking, several liquid staking relationships, you have the $200 million Lido allocation, we just talked about the Galaxy On-Chain Fund, strategic access through ConsenSys. So there’s a bit of a portfolio here, and one question we get is, you’re trying to put this all together and quantify how much incremental ETH these activities could generate above the native staking yield.

I’m not sure if you can give any sense of that or quantification, just as we look out over the next six months to 12 months—would be helpful. Thank you.

Joseph Chalom (Chief Executive Officer)

Sure. So the benchmark we use is the Caesar rate. When you take a look back during Q3, the Caesar rate performed at a 2.63% rate. And I’m pleased to share that we’ve again outperformed that benchmark in each of the months in Q3 and for the quarter overall, including rewards from our additional treasury deployments. We’re not at this point quantifying the premium, as several of our newer strategies, including the Galaxy SharpLink Fund, are still in deployment and scaling mode.

Our focus remains on generating sustainable additive returns above traditional staking rates while maintaining disciplined risk management. We do continue to believe even more strongly today that there’s an opportunity to earn these additional returns above conventional staking through the institutional participation that we’ve mentioned in on-chain strategies. Again, it includes restaking and liquidity provisioning. Sometimes we receive protocol incentives because we have permanent and strategic capital for these emerging financial protocols.

And so at this point we’re not disclosing the actual returns, only that we’ve outperformed the Caesar rate for the quarter.

Devin Ryan (Analyst)

Okay, appreciate it. Is there any way to think about, for the Galaxy Fund, what the expected return— I know it’s strategic as well, but if there’s a kind of targeted return on that capital?

Joseph Chalom (Chief Executive Officer)

Sure. If you take a step back, the fund is designed to generate steady returns above traditional ETH staking. I would think of those as singles and doubles; we’re not looking for triples or home runs here. Importantly, we are contributing our liquid staking tokens from Lido to capitalize the fund, which means we preserve the underlying staking yield while pursuing additional ETH-denominated returns through their selected on-chain opportunities. Again, our goal is to generate incremental ETH on a risk-adjusted basis.

What I would share with you, Devin, is as the fund continues deploying capital and establishes more of a mid- to longer-term performance track record, we expect to be able to provide greater visibility into the incremental returns beyond conventional staking. At this point there’s only a handful of deployments, and we want to make sure we protect the confidentiality of each of those protocols.

Devin Ryan (Analyst)

Yep, completely understand, but appreciate all that color. Thanks, Joseph.

Joseph Chalom (Chief Executive Officer)

Sure. Thank you, Devin.

OPERATOR

Our next question is from Fedor Shublin with B. Riley Securities. Please proceed with your question.

Fedor Shublin (Analyst)

Thank you very much, operator, and good morning all. I do have a question on the block space investment. Sorry if I missed that, but can you size this investment and walk us through the rationale behind these? Specifically, does it lower your validator or custody cost, or maybe improve staking yield, or give you economics in block space, broader client base? Should we think of it as a one-off ecosystem investment or the start of a vertical integration strategy in staking infrastructure?

Thank you very much.

Joseph Chalom (Chief Executive Officer)

Thank you, Fedor. So the way to think about Blockspace, which is a sub half-a-million-dollar equity investment, it reflects the broader commitment we have at SharpLink Gaming to supporting emerging infrastructure that underpins Ethereum’s long-term growth. Blockspace in particular is focused on a few critical areas of Ethereum’s infrastructure. It includes block building, validation, and staking. Each of these are fundamental to the network’s security, efficiency, and continued development.

We view our Blockspace equity investment as a strategic investment that complements our core ETH treasury strategy. We are going to be in the business, as we’ve been very vocal, in supporting companies that are developing important Ethereum infrastructure because we believe we’re both stewards and investors that can help strengthen the ecosystem while potentially participating in the economic value created as more and more institutional adoption and on-chain activity expands.

Again, our North Star and priority is growing ETH per share, and we’re going to do that through disciplined capital allocation and treasury management. The investments in private companies, including the one we made in Blockspace, provide us not only an ability to fund the ecosystem but also an additional opportunity to support that objective while maintaining our exposure to the long-term growth of the Ethereum ecosystem. So you can think of it less as a vertical integration play, but helping support really important infrastructure with potential economic upside as an equity investor.

Fedor Shublin (Analyst)

Thanks very much for this, and if you allow the follow-up—it’s my follow-up kind of follow-up. On Devin’s question on Ethereum adoption overall, you note that accelerating institutional adoption positions SharpLink to grow ETH per share, but maybe which adoption milestones near term do you see as most consequential for Ethereum price? Maybe if you can, maybe it’s a good time to rehash this theoretical equation. Which variables should move and how much Ethereum, in theory, should respond—just like pure quantification question if it makes sense.

Joseph Chalom (Chief Executive Officer)

It does, Fedor. I think in the short term you should think of the two most important being the growth of stablecoin circulation and the growth of tokenized assets. Both of those primitives are dominated on the Ethereum ecosystem. Over 50% of all stablecoin circulation and transaction is on Ethereum. The same is true on tokenization. I personally believe tokenization is where most of the highest-value activity is going to start from, and then it’s going to happen on-chain.

And so DeFi and on-chain activity was built on Ethereum. It has the predominance of that activity and as you start combining stablecoins as the money layer, tokenization as the asset exposure layer, and third on-chain execution, I think you’ll end up seeing a lot more activity by more and more institutional users. In the longer run, I believe agentic finance will help automate and continuously execute these transactions. But I think in the immediate term it’s mostly going to be stablecoins, tokenized assets, on DeFi and on-chain activity. For most of its history, Ethereum has been building and doing the hard work, which is ensuring it has the security, the neutrality, the censorship resistance that distinguishes it from every other blockchain around. I think you’re now going to see the phase of more and more transaction activity.

The newest releases coming from Ethereum will significantly reduce costs and increase speeds, and that will inure to the Ethereum price. I also think Ethereum is a store of value, and it’s starting to get more and more attention in that regard. So I think the short term: stablecoins, tokenization, and on-chain activity; in the longer term it’s going to be agentic transactions.

Fedor Shublin (Analyst)

Thanks very much for this. Turn it over and continue. Best of luck.

Joseph Chalom (Chief Executive Officer)

Thank you, Fedor.

OPERATOR

Our next question is from Kevin Dede with Jones Trading. Please proceed with your question.

Kevin Dede (Analyst)

Morning. Thanks for taking me on the call. I just—cursory analysis here—but it looked like native staking fees increased sequentially, and I was wondering if you might address that.

Joseph Chalom (Chief Executive Officer)

So the native Ethereum staking is driven by supply-demand dynamics, and the actual yield is dynamic in nature. We’ve seen periods where it was around 3%. We’ve also seen periods recently where it’s around 2.5%. Right now, if you look back over the last quarter, it’s been averaging a little bit closer to 2.6–2.65%, but that will change over time. We’re less concerned with the actual yield. We’re more concerned and focused on making sure that we’re deploying our entire balance sheet, and we’re doing it in a way that’s safe and disciplined. And again, over time, because we have permanent capital, we can outperform the Ethereum staking rate. We’ve done that for the last several quarters, and we anticipate being able to share more detail on that as our newest deployments go into production, including the Galaxy–SharpLink yield fund.

But it is based on supply and demand dynamics. We saw a period over the last year and a half since ETFs started staking, and more importantly the digital asset treasury started staking, where the percentage of staking rates on Ethereum is now north of 35%, and that will drive both the yield you receive as well as the queue and unqueue time for staking your ETH.

Kevin Dede (Analyst)

I apologize if—I think I misframed my question. I was more curious about the validator fees that SharpLink is paying. It looked like they were up almost 100 basis points sequentially, and I was wondering how you think we should think about that. Understand the fluidity in ETH staking returns—just not sure about, you know, in light of Fedor’s question too, right? With your Blockspace investments, how you plan on managing native staking?

Joseph Chalom (Chief Executive Officer)

Sure. Most of our native staking is done on a delegated basis, Kevin, through both Coinbase and Anchorage, and we pay them a fixed percentage of our staking rewards—single digit, low single digits. I can’t go into the details for confidentiality, but the amount of absolute fees we share on both custody and staking rewards will depend on the total AUM that’s being staked. And as we acquire more ETH or the price of ETH goes up, we will pay more custody fees, we will receive more rewards, and we will pay more rewards in sharing with our validators.

But that’s managed primarily through our relationships with Anchorage Digital and Coinbase. It’s a fixed percentage of our ETH rewards being received, but we’ll receive more rewards as the price of ETH expands.

Kevin Dede (Analyst)

KPMG, as your auditors, how much oversight will they actually have over the Galaxy fund and the Linea DeFi activity? Just kind of curious about how auditors are going to resolve the intricacies of decentralized finance.

Joseph Chalom (Chief Executive Officer)

Sure. The auditors are involved in auditing and classifying the income and revenue from every deployment we make. Whether it’s the Linea, EtherFi, Eigen, Lido deployments, they’re actively involved. They’re independent auditors, and they focus on GAAP standards and issue opinions and audit our financials. With respect to the Galaxy fund, the fund has its own auditors. Galaxy, as the manager of the fund, publishes accounting and NAV reports. But then how the returns are classified is handled by KPMG as our external auditor. I don’t think there’s anything more to share. We work very closely with them, and we rely on them to help audit our financials.

Kevin Dede (Analyst)

Okay. Thank you very much for the clarity, Joseph. Appreciate it.

OPERATOR

Our next question is from Brian Kinslinger with Alliance Global Partners. Please proceed with your question.

Kevin (Analyst at Alliance Global Partners)

Morning. This is Kevin on for Brian. Thanks for taking our questions. Are you having discussions with Galaxy or others about other funds where you can deploy capital?

Joseph Chalom (Chief Executive Officer)

Just taking a step back. When we started our strategy in June of 2025, we didn’t have in-house capabilities to do full asset management. So we had engaged initially, on a non-exclusive basis, two asset managers to help us on our ETH purchases and staking. As we disclosed in May, for the basic asset management capabilities, we’ve terminated those external relationships. We have really positive relationships with both those managers, but we built in-house teams capable of doing these deployments, as you’ve seen, including the EtherFi and Lido deployments.

But when we try to do on-chain deployments in scale, we engaged Galaxy in this fund together where together we’ve allocated 100—sorry, we’ve committed $125 million of assets. Galaxy has unique capabilities to not only source these opportunities, but to deploy and monitor them in scale. That’s why, in this high value-add engagement, we did it through a fund structure. Kevin, I would tell you on a weekly basis we’re meeting with protocols, DeFi providers, fund managers to explore opportunities, but we haven’t announced anything new.

So right now many of the initial deployments are done in-house. We do our staking oversight in-house, but we have this one fund structure with Galaxy to do on-chain yield and to do it in scale.

Kevin (Analyst at Alliance Global Partners)

Great, thank you. And then just a second one. How important do you view Glamsterdam to Ethereum’s investment thesis? And are you seeing any developments from the upgrade that could materially improve Ethereum’s economics or the institutional adoption?

Joseph Chalom (Chief Executive Officer)

Joe Lubin, I’ll turn this one over to you.

Joe Lubin (Chairman of the Board)

Sure. Thank you. So Glamsterdam is certainly important to the evolution of the Ethereum platform. In terms of institutional adoption, I think it’s relatively immaterial. It certainly does provide some benefits in reducing our reliance on centralization in the proposer–builder separation construct. It will increase throughput, it is adjusting pricing. But the institutions are coming anyway, and I think from what we’re seeing, institutional adoption is effectively independent of the advancements of Glamsterdam.

OPERATOR

Got it. Thank you, guys. Our next question is from Joseph Vafi with Canaccord Genuity. Please proceed with your question.

Joseph Vafi (Analyst)

Hey guys, good morning. Nice progress on a bunch of fronts. So I was just wondering, you know, at a high level, if we think about genius getting fully implemented here early in the year, along with some of the RFW tailwinds, how do you see it—kind of maybe at a high level—how that may ultimately move or spot, how there may be a bit of a decoupling effect from other correlated assets, and, you know, how those trends help the underlying native token here.

And then a quick follow-up.

Joseph Chalom (Chief Executive Officer)

Sure. When I think about the Clarity Act, which didn’t pass cloture in the Senate, we were actually quite happy with what the SEC and CFTC have done since. The two most important green lights we have for institutions are Genius. And I had mentioned in my opening remarks the OCC guidance around stablecoins and the fact that the Genius Act will take effect in January of 2027. That will unlock the world’s largest institutions to start participating in stablecoins.

The second is the SEC’s innovation exemption, which is providing a five-year ramp in clarity to tokenization to allow certain venues that are not necessarily national stock exchanges to do automated market making and support U.S. equity tokenization. We’re going to start seeing that on Nasdaq and New York Stock Exchange, but we’re also seeing important developments on the DTCC front. The ability to dematerialize collateral in accounts and allow them to be tokenized so that members can move them from one account to another in a very, very rapid intraday manner.

What both of these things are going to do is stimulate stablecoin circulation and use cases as well as tokenization of U.S. equities. And when those two things happen, we believe the activity, over 50% historically, will happen in the Ethereum ecosystem. We’ll see more users come online. We’ll see institutions go from experimentation to production. And then the interesting element is when you have these tokenized assets, for the first time we have an ability to see them borrowed against, lent against on-chain—whether you call it DeFi or on-chain 2.0, that’s where you’re going to see a lot of the composability.

And we see Ethereum being at the forefront of that activity, and it’s going to benefit the price of Ether. I won’t make short-term price predictions, but this is the exact thesis we’ve been talking about since last June, and we’re seeing it play out live in real time. And we’re quite encouraged by the fact that the SEC, CFTC, and OCC are providing the guidance needed for the world’s largest institutions to come on-chain. While it’s starting in the U.S., we’re very encouraged by what we’re seeing in Asia as well.

Sure. I think we’ve said publicly that when our multiple to NAV is below 1, we are not in the business of raising capital through the ATM because it could be dilutive for shareholders. We used the ATM last year when it was accretive to shareholders. But the interesting thing about running an Ethereum treasury company is we have, every day, the flexibility across multiple investment opportunities. Obviously we own ETH directly, and that gives our clients and our investors an opportunity to get the capital appreciation.

But when we think of disciplined capital allocation, we are opportunistic. There are moments where it doesn’t make sense to raise. I would tell you it’s very sentiment-oriented. When the price of ETH in Q3 expanded, the number of calls coming in from institutions—whether they were hedge funds or banks—interested in buying our shares through registered directs increased. But we’re going to be very, very careful, and where it makes sense—we’ve done it twice—we will do the premium-to-NAV financing. At the same time, you’ve seen our cash on hand has expanded. It’s just shy of $50 million, which gives us, every day, an opportunity to make a decision around share repurchases or ETH acquisitions. You would have seen in June, when we raised the $75 million, we did both. We raised capital accretively, we did some share repurchases, and we also bought ETH.

So we have a team who’s able to do that. We’re not in a rush, and we’re not here to accumulate ETH for the sake of accumulation. We’re going to do things that make sense for our long-term investment thesis and grow ETH per share. That is how we think about it. It doesn’t change in an up market or a down market. We have the flexibility, and that’s the beauty of an Ethereum treasury strategy. We are seeing a lot of inbounds, but we’re going to be very careful and thoughtful to do financing when it makes sense, to do stock repurchases when it makes sense, and to buy ETH when it’s accretive for investors.

OPERATOR

We’ve reached the end of the question and answer session. I would like to turn the floor back over to Joseph Chalom for closing comments.

Joseph Chalom (Chief Executive Officer)

Thank you, operator, and thank you to everyone who’s joined us today. I believe SharpLink Gaming is entering an exciting new phase of its evolution and strategy. We’ve established a strong institutional foundation, we’ve assembled an experienced team, and built one of the world’s largest ETH treasuries. And we’re leveraging that scale every day to pursue new opportunities, to deepen our strategic relationships, and to generate additional ETH through disciplined capital allocation and innovative on-chain deployments.

And while market conditions continue to evolve day by day, we are relentlessly focused on compounding our ETH per share and creating sustainable long-term value for our stockholders. Thank you again for your continued support, and we look forward to updating you again on our next earnings call. Have a great day, everyone.

OPERATOR

This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.

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