SharpLink Gaming Ltd. (SBET) Earnings

Management highlights

- Ecosystem and Market Transition: Ethereum has evolved from an experimental technology to core foundational infrastructure for programmable global finance, with growing adoption across both institutional and grassroots participants. Major financial institutions including BlackRock, JPMorgan, and Robinhood have launched or expanded production-level products built on Ethereum, and recent market performance shows ETH outperforming Bitcoin and Solana, with US spot Ethereum ETFs recording larger net inflows than comparable Bitcoin and Solana products in July 2026. The Ethereum protocol roadmap is advancing, with the upcoming Glamsterdam hard fork initiating a multi-year Lean Ethereum upgrade focused on faster speeds, improved privacy, quantum resistance, and higher network capacity. - Company Milestones: Sharplink marked its first anniversary of its ETH treasury strategy in June 2026, having raised over $3.3 billion in capital to become the world's second-largest corporate holder of ETH. The firm was added to the Russell 2000 and Russell 3000 indices in the June 2026 reconstitution, expanding institutional visibility and index-linked ownership. Sharplink executed a $75 million registered direct offering in Q2 2026 at a premium to net asset value, using proceeds to acquire ~10,000 ETH and repurchased 2.1 million of its own shares for $10 million during the quarter; cumulative repurchases since August 2025 total 4 million shares for $41.7 million. - Capital Allocation and Treasury Strategy: Sharplink's core objective is to compound ETH per share and grow net ETH holdings over time via two channels: disciplined public market capital allocation (raising capital on attractive terms, buying ETH when favorable, repurchasing undervalued shares) and productive treasury management (earning incremental returns above the market average composite Ethereum staking rate (CSER)). The firm launched the $125 million Galaxy Sharplink on-chain yield fund, with $100 million in committed capital from Sharplink (contributed as ETH or liquid-staked ETH) and $25 million from Galaxy Digital, with initial opportunities already identified pending final diligence. - Ecosystem Stewardship: Sharplink provided anchor funding to three independent Ethereum-focused organizations to accelerate institutional adoption: 1) ETH Labs, focused on advancing the core Ethereum protocol; 2) Ethereum Institutional, which has built over 500 institutional relationships and convened 150+ senior executives representing $250 trillion in combined assets to drive deployment; 3) ETH Systems, which builds privacy and compliance infrastructure that allows regulated institutions to transact on Ethereum at scale without exposing sensitive data. All three organizations operate independently to preserve Ethereum's credible neutrality, while accelerating adoption that benefits the entire ecosystem. - Emerging Opportunity: Agentic finance (autonomous AI agents conducting economic activity) is a fast-growing emerging category that will increase demand for Ethereum's programmable, neutral infrastructure. Early data already shows a 225 million annual run rate of agent payment transactions on Ethereum's X402 protocol, and the network's existing open infrastructure, neutrality, and deep liquidity position it to capture most growth in this segment.

Guidance

Management did not provide specific quantitative financial or operational guidance for future periods. The firm reaffirmed its long-term strategic guidance focused on compounding ETH per share and growing net ETH holdings through disciplined capital allocation, productive risk-controlled treasury management, and strategic ecosystem investment. Management maintained its core conviction that Ethereum is transitioning to mass institutional adoption as foundational global financial infrastructure, and that Sharplink's scale, permanent capital base, and institutional positioning give it a unique competitive advantage to capture long-term value from this transition.

Segment performance

Sharplink operates as a single business segment focused on Ethereum (ETH) treasury management and ecosystem participation. Total revenue for Q2 2026 was $11.5 million, up from $0.7 million in the year-ago quarter, with growth driven entirely by staking and ETH yield-generating strategies. The firm recorded a net realized gain of $1.4 million in Q2 2026, compared to a $5.4 million realized gain in Q2 2025. SG&A expenses were $9.1 million in Q2 2026, up from $2.4 million in the prior year quarter, reflecting full-quarter operation of the ETH treasury strategy (launched in June 2025, only partially active in the year-ago period) and increased costs for personnel, custody, insurance, legal, accounting and public company infrastructure. Sharplink reported a net loss of $394.3 million in Q2 2026, compared to a $103.4 million net loss in Q2 2025, driven primarily by a $321 million unrealized fair value loss on ETH holdings and a $76.1 million impairment charge (versus a $2.4 million unrealized loss and $87.8 million impairment charge in Q2 2025). As of June 30, 2026, Sharplink held 632,784 native ETH with a net fair value of $989 million, plus 162,083 liquid-staked ETH and 66,267 wrapped ETH with a combined net cost value of $369.2 million; total combined ETH holdings stood at 888,938 as of August 3, 2026. Cash on hand as of June 30, 2026 was $56.2 million, up from $28.5 million as of December 31, 2025.

Risks & headwinds

- Forward-looking statements about Ethereum adoption, future performance, and strategy outcomes are inherently uncertain, and actual results may differ materially from expectations due to a range of unstated risks and uncertainties. - ETH prices are highly volatile, and unrealized losses and impairment charges required under U.S. GAAP can create significant quarterly net losses that do not reflect actual realized economic losses or changes to the number of ETH units held, but can impact reported financial results quarter-to-quarter. - Active treasury deployment and ecosystem investments carry inherent risk, and the firm only deploys capital when expected incremental returns adequately compensate shareholders for taken risk, liquidity profile, and operating burden. - Regulatory and market conditions can change rapidly, impacting adoption and asset prices.

Analyst Q&A

• Q: How does agentic finance develop, why is Ethereum the best positioned chain for this opportunity, and how is Sharplink positioned to benefit?

  A: Agentic finance gives individual investors automated, always-on portfolio management that was previously only available to large institutions, closing the gap where trillions in household cash currently sits idle earning below-market rates. Ethereum is uniquely positioned because it already has live open-source infrastructure (X402 micropayments, ERC8004 identity registries) for agent activity, and its credibly neutral, unowned architecture means agents answer to users rather than proprietary payments or tech companies. Sharplink supports the underlying infrastructure development accelerating this trend, and will benefit from growing demand and utility for ETH as agentic activity expands.

• Q: How is Sharplink's active treasury strategy different from passive ETH ownership, and what incremental value can it deliver?

  A: Passive ETH exposure (direct holding, ETFs) only provides price exposure to the asset, while Sharplink adds three unique layers of value: disciplined dynamic capital allocation to maximize ETH per share, active productive treasury management that earns incremental ETH above benchmark staking yields (enabled by Sharplink's permanent capital base that allows for long-term deployments most ETFs cannot do), and access to differentiated ecosystem investment opportunities not available to passive vehicles. This combination is designed to compound value over time above what passive ETH ownership can deliver.

• Q: What is the target return profile and funding structure for the Galaxy Sharplink on-chain yield fund?

  A: Sharplink does not disclose public yield guidance, but the fund's success is measured by earning long-term risk-adjusted incremental ETH returns above the native Ethereum staking rate (CSER). The fund is capitalized with Sharplink's existing ETH, which continues to accrue staking rewards, and will focus on on-chain, highly collateralized yield opportunities, including supporting new protocol cold starts that can deliver above-benchmark returns. Galaxy brings specialized scale sourcing, diligence, and risk management capabilities that complement Sharplink's in-house team.

• Q: What is the nature of Sharplink's funding for the three new ecosystem organizations, and what benefit do shareholders receive?

  A: These are intentional multi-year strategic funding commitments alongside other ecosystem supporters, not charitable grants, meant to strengthen the Ethereum infrastructure that underpins Sharplink's entire investment thesis. The organizations are independent and neutral to preserve Ethereum's core properties, so Sharplink does not get exclusive commercial rights or profit sharing, but all shareholders benefit from accelerated institutional adoption and improved Ethereum utility that drives long-term ETH value. The investment is small in monetary terms but already has delivered visible gains in market sentiment for Ethereum.