UPEXI, INC. (UPXI)·Q1 2026 Earnings Summary

Executive Summary

• Q1 2026 delivered record total revenue of $9.24M, up 112% year-over-year, driven by $6.08M of digital asset (staking) revenue; gross profit rose to $8.28M (+183% YoY) and net income swung to $66.75M primarily from ~$78.0M unrealized gain on Solana (SOL) held on balance sheet .
• Results were a significant beat versus Wall Street consensus: revenue beat by ~$1.91M and diluted EPS beat by ~$0.77 (consensus -$0.01 vs reported $0.76) as the company recognized fair-value remeasurement gains under ASU 2023-08; EBITDA far exceeded consensus due to unrealized gains flowing through operating income.
• Management authorized a $50M share repurchase program the day after earnings, adding an incremental capital allocation lever to compress any discount to NAV and support stock performance .
• Management expects Q2 to benefit from having ~2.1M SOL fully staked and sees yield optimization (validator competition, locked SOL discounts) improving run-rate staking economics; daily staking revenue during Q1 was “over $75K,” with prior update noting ~$100K/day trajectory as the treasury scaled .

What Went Well and What Went Wrong

• What Went Well

  • “Digital Asset Revenue was Approximately $6.1 Million for the Quarter” and gross profit rose 183% YoY, validating the Solana treasury model shift; CEO: the treasury is “a productive, revenue-generating asset” .
  • Accretive capital markets execution: $200M raise (equity and in-kind convert), SOL holdings ~2.1M with ~95% staked; adjusted SOL/share increased materially since year-end .
  • Strategic flexibility: $50M buyback authorization post-earnings and multiple options (using staking revenue or borrowing against treasury) to address potential NAV discounts vs peers .

• What Went Wrong

  • Legacy consumer brands revenue fell 28% YoY to $3.16M as focus shifted to digital assets; distribution costs fell, but G&A rose sharply (+$7.9M) due to treasury build-out and public company costs .
  • Non-GAAP/volatility optics: ~$78.0M unrealized gain recognized in operating line materially drove profitability; management cautioned about digital asset volatility and will focus on growing SOL count rather than price timing .
  • Internal controls: disclosure controls were deemed “not effective” due to material weaknesses in segregation of duties and supervision, with remediation planned by FY26 .

Financial Results

• Quarterly comparisons (oldest → newest)

Values with * retrieved from S&P Global.

• Q1 2026 vs prior year, prior quarter, and consensus

Values with * retrieved from S&P Global.

• Revenue mix (Q1 2026)

• Balance sheet and treasury KPIs (Q1 2026)

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO (press release): “Substantially all our Solana is generating a meaningful yield, effectively turning our treasury into a productive, revenue-generating asset” and Q1 2026 digital asset revenue of $6.1M drove gross profit up 183% YoY .
• CFO: “Net income was $66.7 million… Solana tokens increased during the quarter by approximately 1,322,000 tokens… unrealized gains of approximately $78 million… had significant impact to the reported financials” .
• CSO: “Finance is moving onto the blockchain… it’s happening on Solana… passing comprehensive digital asset legislation could drastically accelerate this transformation” .

Q&A Highlights

• Advisory Committee impact: Early-stage feedback improving market communication to both traditional finance and crypto communities; strategy remains focused on SOL accumulation and yield maximization .
• Effective yield: Not yet blended due to ongoing scale-up; validator competition program in place; yield expected to be higher next quarter as full staking takes hold .
• NAV discount plan: Multiple levers, including redirecting staking revenue to buybacks or borrowing against treasury to repurchase shares; management emphasizes long-term capital markets playbook .
• Baseline yield: Management views current period as “baseline” from which yields should rise, given most SOL now staked .

Estimates Context

• Q1 2026 vs S&P Global consensus (beats in bold):
  • Revenue: $9.240M vs $7.328M consensus — bold beat driven by staking revenue and fair-value remeasurement context .
  • Diluted EPS: $0.76 vs $(0.01) consensus — bold beat, largely from ~$78.0M unrealized gain recognized in operating income .
  • EBITDA: ~$69.31M vs $0.303M consensus — bold beat due to fair-value gains flowing through operating line under ASU 2023-08.

Values with * retrieved from S&P Global.

Key Takeaways for Investors

• Earnings print was driven by fair-value remeasurement of SOL under ASU 2023-08; expect reported EPS/EBITDA to be highly sensitive to SOL price volatility even as staking revenue scales .
• The treasury is now a cash-flowing asset: ~95% of SOL staked, with validator optimization targeted to lift yield; Q2 should reflect full-quarter staking on ~2.1M SOL .
• Capital allocation flexibility improved: $50M repurchase authorization plus an articulated plan to compress NAV discounts (buybacks via staking income or borrow against treasury) .
• Core consumer brands are stable but shrinking in focus; expect limited growth contribution from legacy operations while treasury strategy dominates narrative .
• Balance sheet considerations: $143.2M convertible notes (2% coupon; $4.25 conversion), $50M short-term facility (11.5%); custodial concentration and insurance limits warrant monitoring .
• Estimate framework likely needs recalibration: consensus appeared not to fully incorporate fair-value accounting impacts; analysts should separate staking “run-rate” vs mark-to-market effects to model normalized earnings power.
• Near-term trading implications: stock likely reacts to buyback program and narrative of SOL momentum; medium-term thesis rests on increasing SOL per share via accretive issuances, staking yields, and discounted locked SOL, amid policy tailwinds .