Hyperion DeFi, Inc. (HYPD) Earnings

Management highlights

### Strategic Transition & Core Model Establishment - Hyperion DeFi completed its full transition from its legacy biotech predecessor Inovia to a pure-play DeFi firm focused on the Hyperliquid ecosystem. The firm's Hype Deep Triple Dip Strategy combines three value drivers: a growing HYPE treasury, scalable on-chain DeFi businesses, and embedded economic upside across the growing Hyperliquid ecosystem. - All remaining legacy biotech assets were sold to Arctic Vision in July 2026, and $2.7 million in legacy biotech liabilities were extinguished via negotiated partner releases without cash outlay. Hyperion DeFi is now a 100% pure-play DeFi operating company. - Over the 12 months ending Q2 2026, the firm's gross HYPE token holdings grew 56% from 1.31 million to 2.04 million tokens. Quarterly adjusted gross profit grew 162% from Q3 2025 to Q2 2026, rising from $0.4 million to $1.2 million, and core operating expenses declined 46% over the same period. Net asset value increased to $134 million as of Q2 2026, up from $70 million as of Q1 2026, driven by $54.8 million in treasury gains from HYPE's price appreciation. ### Hyperliquid Ecosystem Milestones - Hyperliquid hit a major cumulative protocol revenue milestone, surpassing $1 billion in total protocol revenue, with the vast majority of fees returned to HYPE token holders via the assistance fund buyback mechanism. HYPE hit a new all-time high in Q2 2026, with a broadening global holder base. - Payward (parent company of Kraken) launched its xStocks tokenized equity framework natively on HyperCore, enabling 24/7 on-chain spot trading of five major equities and ETFs backed 1:1 by real underlying shares. - HIP4 Outcome Markets completed its first full quarter on mainnet, generating ~$100 million in trading volume in its first month post-launch. Permissionless HIP4 deployment launched on testnet in late July 2026, requiring all outcome market deployers to stake 500,000 HYPE for the duration of operations, creating structural locked demand for HYPE that benefits Hyperion's large treasury position. ### Q2 2026 Operational Highlights - Following the unplanned sunset of the USDH native stablecoin that led to the wind-down of two existing DeFi partnerships, Hyperion redeployed 1,000,000 HYPE tokens into new house agreements by early Q3 2026: 500,000 HYPE staked for SKU's Partner Markets institutional listing service, and 500,000 HYPE staked for upcoming HIP3 deployer Entropy. SKU has over 40,000 unique users signed up for its private beta, and Hyperion holds rights to 5% of SKU's future equity and 5% of tokens if SKU completes a token generation event. - Hyperion completed its first institutional credit deal via the HyperLens Avia platform, lending $1 million USDC against natively staked HYPE at an 8% APY, with collateral held in secure custody at Anchorage Digital. Hyperion is entitled to a revenue share on future Avia platform activity. - Silhouette's RFQ trading service completed migration to production, with cumulative monthly volumes growing from hundreds of thousands of dollars to over $40 million, driven by rising demand for tokenized asset trading on Hyperliquid. - The Risk Premium institutional-grade on-chain vault strategy joint venture launched publicly in June 2026, expanded to Ethereum mainnet, and added support for Tether Gold (XAUT), marking the first step toward RWA vault support. Hyperion's accumulated Risk points place it in the top 50 HYPE holders, preserving eligibility for future protocol incentives. - Hyperion announced a new institutional staking partnership with Blockdaemon to expand third-party HYPE delegation to Hyperion's validator node. The firm is also exploring leveraring existing validator infrastructure to offer paid data services for Hyperliquid traders, with more details to come. - Hyperion has accumulated free equity and token upside in four early-stage Hyperliquid protocols to date, including Kinetic, HyperLend, Silhouette, and SKU, with no upfront cost for these positions beyond core ecosystem participation.

Guidance

- Management reaffirms the full-year 2026 adjusted gross profit guidance range of $5 million to $7 million, which represented an upward revision from the original $4 million to $6 million guidance announced in 2025. - Management maintains its original long-term guidance of achieving positive adjusted net operating cash flow by the end of 2026, and remains confident in hitting this target based on consistent quarterly growth, declining operating costs, and improving cash flow trends. - Management expects the majority of second-half 2026 adjusted gross profit growth to come from the DeFi monetization segment, as the new SKU and Entropy deployments ramp up, replacing the lost revenue from the USDH-related wind-downs. Ecosystem rewards could also contribute meaningfully if additional airdrops occur in the second half. - Management expects core operating expenses (excluding stock-based compensation) to decline an incremental 10% to 20% quarter-over-quarter in Q3 2026, following the full wind-down of all legacy biotech operations, bringing total operating costs below half of the Q3 2025 initial run rate.

Segment performance

Hyperion DeFi reported Q2 2026 adjusted gross profit of $1.2 million, a 20% quarter-over-quarter increase from Q1 2026's $960,000. 50% of this adjusted gross profit was earned in cash, and the firm achieved 2.2x base staking yield for its HYPE holdings. Below is the performance breakdown by segment: 1. Validator Commissions: Generated $42,000 in adjusted gross profit, a 4% quarter-over-quarter increase from $40,000 in Q1. Total hype tokens earned from combined staking and validating came to ~11,000 tokens, in line with Q1 levels, with approximately 500 of these tokens coming specifically from validator commissions. 2. Yield Enhancement Strategies: Generated $334,000 in adjusted gross profit, a 58% quarter-over-quarter increase from $211,000 in Q1. Growth was driven by elevated realized volatility in HYPE through the quarter. 3. DeFi Monetization: Generated $158,000 in adjusted gross profit, a 36% quarter-over-quarter decline from $245,000 in Q1. This decline was fully driven by the mid-May announcement of the USDH stablecoin sunset, which terminated two existing house agreements and released 800,000 hype tokens for redeployment. 4. Ecosystem Rewards: Generated $90,000 in adjusted gross profit, down from $150,000 in Q1. This segment is naturally volatile due to variable timing of airdrops and token generation events. The Q2 2026 result includes revenue from the sale of received MAX airdrop tokens and a one-time USDC grant from Felix related to the USDH wind-down. Legacy Biotech Segment: The remaining legacy biotech assets were fully sold off in July 2026, and all legacy operations were wound down during Q2 2026. Core operating exenses declined 46% from Q3 2025 levels, and core operating expenses (excluding stock-based compensation) declined 21% quarter-over-quarter to $2.3 million in Q2 2026, half the $4.3 million run rate in Q3 2025.

Risks & headwinds

- Operating in the fast-evolving Hyperliquid DeFi ecosystem creates unplanned product risk: core native protocol changes (such as the USDH stablecoin sunset in Q2) can result in unexpected termination of existing partnerships and near-term revenue declines, even if capital is ultimately redeployed to higher-quality opportunities. - DeFi revenue is inherently volatile quarter-to-quarter, particularly for ecosystem rewards which depend on the variable timing of airdrops and token generation events that cannot be reliably forecast. - Regulatory uncertainty remains for on-chain crypto products, including vault services and blockchain settlement infrastructure. Management noted that clear regulatory rulemaking will be required to drive broad institutional adoption of products like the Risk Premium vault strategy.

Analyst Q&A

• Q: Gareth Cassetta (Antor) asked how quickly the new SKU and Entropy deployments will ramp in the second half of 2026, if this ramp is already included in current guidance, and how much idle HYPE remains available for future deployments. /

  A: CEO Hyunsu Jung noted Hyperion maintains active ongoing relationships with Hyperliquid builders, allowing it to pivot quickly to new opportunities after the USDH wind-down. SKU's launch is contingent on the HIP4 permissionless deployment roadmap, while Entropy (a HIP3 deployer) will begin operations immediately after setup. Management did not specify a remaining idle HYPE balance but confirmed Hyperion will continue pursuing additional new deployments after launching these two projects.

• Q: Cassetta followed up to ask how much of the 11,000 Q2 HYPE tokens came from the validator business, and what to expect from the new Blockdaemon partnership. /

  A: CFO David Knox confirmed only ~500 of the 11,000 HYPE tokens came from validator commissions, with the majority coming from native staking of Hyperion's own HYPE holdings. The Blockdaemon partnership was just announced, and management expects it to ramp gradually through Q3 and into 2027. Hyperion's existing institutional-compliant validator infrastructure is attractive to large institutions, and management expects additional similar institutional partnerships to follow.

• Q: Brian V. Ten (Cybert) asked if management still views HIP4 Outcome Markets as a larger long-term opportunity than HIP3. /

  A: CEO Hyunsu Jung reaffirmed this outlook, noting outcome markets can accommodate a far wider range of directional belief expression than existing perpetual contracts, especially as more real-world assets are tokenized on Hyperliquid's unified settlement layer. Hyperliquid's unified account and order book structure gives it a major structural advantage over competing prediction market platforms, and Hyperion is positioned to support new deployers as HIP4 moves to permissionless.

• Q: Jim McCleary (Chardon Capital Markets) asked how Hyperion will hit its full-year 2026 guidance, and if the growth will be concentrated in DeFi monetization and in Q4. /

  A: CFO David Knox confirmed that DeFi monetization is expected to be the largest source of second-half growth, recovering from the Q2 wind-downs, with ecosystem rewards also able to contribute meaningfully if airdrops occur. While guidance implies a large second-half step-up, management did not commit to a Q3 vs Q4 split, noting quarterly volatility is normal for crypto DeFi operations, but remains fully confident in hitting the full-year target range.