Solana Co (HSDT) Q3 2026 Earnings Call Transcript
Solana Co (HSDT) Q3 2026 Earnings Call Transcript
Motley Fool Transcribing, The Motley FoolThu, November 12, 2026 at 6:59 AM UTC
0
Image source: The Motley Fool.DATE
Wednesday, Nov. 11, 2026
CALL PARTICIPANTS -
Chairman and Chief Executive Officer - Choon Wee Chee
Director - Cosmo Jiang
Chief Financial Officer - Agustina Tjandrasuwita
TAKEAWAYS -
Revenue -- $3.4 million, increasing from $2.5 million in the second quarter due to higher staking rewards and the start of third-party validator income.
Staking Revenue -- $3.3 million, generated from 30,767 SOL earned through treasury holdings and the Pacific Backbone validator.
Gross Margin -- 82%, reflecting $2.7 million in gross profit as the company continues to optimize its cost structure.
General and Administrative Expenses -- $3.4 million, declining from $11.1 million in the second quarter as the cost basis normalized following the divestiture of the PoNS business.
Digital Asset Holdings -- 2.4 million SOL, with a fair value of $288 million as of September 30.
Net Income -- $105.2 million, compared to a net loss of $352.8 million in the prior year period, primarily driven by unrealized gains on digital assets.
Unrealized Gain on Digital Assets -- $102.7 million, resulting from a 60% increase in the price of SOL during the third quarter.
Capital Raise -- $15 million, completed through a registered direct offering of approximately 4.4 million shares priced at $3.43 per share.
Share Repurchases -- 1.4 million shares, bought back at an average price of $1.96 per share for a total of $2.8 million during the third quarter.
Third-Party Stake -- 1 million SOL, representing the delegation level achieved by the Pacific Backbone infrastructure by the end of the quarter.
Total Stake -- 1.5 million SOL, reached on Nov. 3 as the company expanded its validator operations in Tokyo.
Staking Yield -- 5.9% APY, outperforming the network average of 4.9% by 100 basis points through active rebalancing and validator selection.
Inflationary Rewards -- 5.1% APY, representing the primary component of the total realized staking yield during the quarter.
Block Rewards and MEV -- 50 basis points and 20 basis points respectively, contributing to the company's staking yield outperformance.
On-Chain Real World Assets -- $4.6 billion, representing the Solana network market size reached in late September as institutional interest expanded in the Asia Pacific region.
Cash and Equivalents -- $1.1 million, held alongside $1 million in cash receivables as of September 30.
Need a quote from a Motley Fool analyst? Email pr@fool.com
RISKS -
Jiang stated, "that has created a lot more volatility in the stream of validated rewards," noting that changes to leader rewards following the Alpenglow upgrade may affect the consistency of future staking yields.
Solana Company (NASDAQ:HSDT) transitioned its Pacific Backbone infrastructure from the build-out phase to active operations, recording its first third-party validator revenue during the third quarter. Management reported that the company's integrated strategy, which combines advisory services, validation infrastructure, and treasury management, began generating recurring fee-based revenue independent of asset price movements. The company expanded its institutional focus in the Asia Pacific region, securing a strategic enterprise designation in Hong Kong and planning the establishment of a regional headquarters there. Additionally, the company utilized its capital toolkit to both repurchase shares at a discount to net asset value and issue new shares at a premium, subsequently deploying proceeds into additional digital asset holdings.
The company was designated a strategic enterprise by the Hong Kong SAR government, which management expects will facilitate institutional adoption and the growth of its staking offering.
Management indicated that the Pacific Backbone infrastructure reached 1.5 million SOL of total stake by Nov. 3, including both internal treasury and third-party delegations.
The company participated in Solana's first on-chain governance vote, supporting the Solana Constitution while opposing proposals to modify network economics during the first live cycle.
CEO Chee stated, "institutions are moving real size on to infrastructure operated by a name listed regular entity, and that stake is now producing recurring fee-based revenue."
The Alpenglow upgrade to the Solana network, which went live on Oct. 21, aims to reduce transaction finality from 12.8 seconds to approximately 150 milliseconds.
Management conducted over 40 institutional education sessions and workshops with banks, asset managers, and exchanges across the Asia Pacific region during the quarter.
INDUSTRY GLOSSARY -
Alpenglow: A significant upgrade to the Solana consensus protocol designed to reduce transaction finality times.
APY: Annual Percentage Yield, a measure of the real rate of return earned on an investment over one year.
MEV: Maximal Extractable Value, referring to the maximum value that can be extracted from block production in excess of the standard block reward and gas fees.
NAV: Net Asset Value, representing the total value of an entity's assets minus its total liabilities.
Pacific Backbone: The company's proprietary, compliant high-performance validator infrastructure.
PoNS: Portable Neuromodulation Stimulator, a medical device from the company's divested legacy business.
RWA: Real World Assets, referring to physical or traditional financial assets tokenized on a blockchain.
SOL: The native cryptocurrency of the Solana blockchain network.
Staking: The process of locking up digital assets to support the operation and security of a proof-of-stake blockchain in exchange for rewards.
Validator: A participant in a blockchain network responsible for verifying transactions and proposing new blocks to the ledger.
Full Conference Call Transcript
Operator: Good afternoon, everyone, and thank you for participating in today's conference call to discuss Solana Company's operating results for the third quarter of 2026, ended September 30, 2026. The third quarter 2026 earnings press release was issued today, November 11, at approximately 4:25 p.m. Eastern time and is available in the Investor Relations section of Solana's company's website. Joining us today are Joseph Chee, Chairman and Chief Executive Officer; Cosmo Jiang, Director of Solana Company and General Partner at Pantera Capital; and Madelene Gani, Chief Financial Officer. [Operator Instructions]. Today's call is being recorded. I would now like to hand the call over to Jay Morakis with M Group Strategic Communications for our introductory comments. Please go ahead.
Jay Morakis: Thank you, operator. Before we begin, I would like to inform you that comments and responses to questions during today's call reflect management's views as of today, November 11, 2026 only and include forward-looking statements and opinion statements, including predictions, estimates, plans, expectations and other similar information. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties.
These risks and uncertainties are more fully described in our press release issued today in the sections entitled Risk Factors in our annual report on Form 10-K filed with the United States Securities and Exchange Commission, or the SEC, on March 31, 2026, and our quarterly reports on Form 10-Q as well as in subsequent filings with the SEC. Our SEC filings can be found on our website or on the SEC's website. Investors are cautioned not to place undue reliance on forward-looking statements. We disclaim any obligation to update or revise these forward-looking statements.
Please note that this conference call will be available for audio replay on our website under the News and Events section of our Investor Relations page. With that, I would now like to turn the call over to Solana Company's Chairman and Chief Executive Officer, Joseph Chee.
Choon Wee Chee: Thank you, Jay. Good afternoon, everyone. Welcome to Solana Company's Third Quarter 2026 Earnings Call. On our Q1 call earlier this year, I introduced Solana Company's self reinforcing flywheel. On our Q2 call, I said we have reinforced the flywheel, validated cluster life in Tokyo, third-party stakes secured and putting the legacy business behind us. The third quarter is when the flywheel started to turn. This integrated strategy is now beginning to bear fruit. Our third quarter operating costs reached their lowest level yet, below that of Q1 as we continue to streamline operations, while simultaneously executing our dynamic treasury management plan. Cosmo and Mady will share the details of those achievements in their respective areas.
Three developments defined the quarter. First, our Pacific Backbone infrastructure move from build-out to operation. Third-party stake on our Tokyo validator reached 1 million SOL at quarter end and as we had anticipated, began contributing to our revenue in the third quarter. Second, as SOL price rallied and our discounted assets narrowed, we put the other side of capital toolkit to work. On September 30, we priced an approximately $15 million registered direct offering with a global institutional investor at a 5% premium to net asset value per share at $3.43 per share.
The offering closed on October 1, we subsequently used the proceeds from the offering to purchase approximately 125,000 SOL in support of our commitment to put more so behind every share. Third, our treasury continues to work for shareholders as well, staking rewards attributed to our treasury holdings and validated operation contributed to $3.3 million in revenue on 30,767 SOL earned in the third quarter, further bolstering our treasury and compounding returns. Before I detail the company's business operations for the quarter, I would like to take a moment to touch on developments in the Solana ecosystem. The third quarter was another strong period for institutional adoption of Solana and much of that momentum came from Asia Pacific.
Tokenization continued to accelerate, Solana's on-chain real world asset market set a new all-time high of approximately $3.7 billion in July, surpassed $4 billion in August and climbed above $4.6 billion by late September. In July, tokenized SK hynix shares went live on Solana on the same day the Korean chip maker debuted on NASDAQ, giving eligible investors around the world 24/7 on-chain access to one of Asia's largest technology companies. Asia Pacific institutions move decisively. In Japan, SBI Holdings formed a strategic partnership with Solana Foundation, focused on yen stablecoins, tokenized real world assets and cross-border payments and SBI Global Asset Management and DGFT launched the JX token for on-chain access to a Japanese equity fund strategy.
In Korea, Shinhan Asset Management, which oversees approximately $97 billion, signed an MOU with Solana Foundation for a won-denominated tokenized fund and payment processor, KSNet, agreed to bring Solana Pay to more than 330,000 merchants. In September, Project Harmonia was announced to connect all funds distribution network to of more than 3,300 asset managers and financial institutions with Solana. Regulated access to SOL also widened. Morgan Stanley investment management launched a Solana Trust that intend to stake and pass rewards through to investors. E*TRADE added spot trade SOL trading. Charles Schwab announced plans to add SOL and the Bitwise Solana stake in ETF became the first U.S. Solana ETF to surpass $1 billion in assets.
In Japan, the national diet, which is the national parliament of Japan, reclassified crypto asset as financial instruments, laying the legal foundation for spot crypto ETFs. The network itself kept improving. Block capacity rose 66% and block times fell from 400 to 200 milliseconds and help and grow the most significant upgrade to Solana's consensus protocol since launch went live on October 21 with the goal of cutting transaction finality from roughly 12.8 seconds to about 150 milliseconds. We believe that is performance that institutional involvement in the ecosystem requires.
Each of these developments helped to expand institutional interest in Solana and the market opportunity for Solana company to serve as a trusted provider advisory, staking and validation services across the ecosystem. The third quarter also brought Solana's first on-chain governance vote, and we were proud to participate directly. As a validated operator and one of the largest publicly listed holders of SOL, we believe we have a responsibility to participate and to do SOL transparently. We published our positions in advance so that our delegators could vote with full knowledge of the operator's view. We voted for SGP-0001, the Solana Constitutions, which passed with broad support.
We voted against SGP-0002 and SGP-0003, not because we have posted long-term goals, but because we believe established a network economics should not change during the first live governance cycle. Take weighted governance work as intended and provides long-term stakers like us, a direct voice in the network we are building on. As I committed to last quarter, I'll update you on each of our 3 service lines every quarter. First, advisory services, we provide bespoke advisory for traditional financial institutions and corporations, helping them unlock tangible business value through blockchain adoption.
During the quarter, our team held over 40 institutional education sessions and workshops with banks, asset managers, exchanges across Asia Pacific, and we continue to see increasing enthusiasm around exploring new use cases or tokenized and stablecoin transaction. We also continue to make the case for institutional Solana adoption in public. In August, I spoke at HSBC Asia Fintech Summit at Cyber Asia in Hong Kong. In September at Solana Summit Korea in Seoul. One point I made at HSBC bears repeating here. We believe tokenization works best when it starts with assets, they already have deep liquidity and real demand and expand out from there.
That is how we advise our clients and the reason we believe institutions coming on-chain, our region is starting to with stablecoins, funds and listed equities. Second, validated infrastructure. Pacific Backbone is a compliant high-performance infrastructure that we believe regulated institutions require in order to scale staking validation on Solana. Last quarter, we said we had secured third-party stake and expected to report validated results for the third quarter. As of September 30, Pacific Backbone has been delegated approximately 1.3 million SOL of total stake, including 1 million delegated by third parties. And that has continued to grow since quarter end to approximately 1.5 million SOL of total stake as of November 3.
This is what we have been working towards. Institutions are moving real size on to infrastructure operated by a name listed regular entity, and that stake is now producing recurring fee-based revenue beyond our own treasury. Our Tokyo cluster continues to run on 3 machines operating as a single validator, providing us redundancy and independent test environment ahead of each new deployment. Beyond Tokyo, we are assessing Hong Kong as our next location. We are also pursuing ISO 27001 certification, which we are targeting for the fourth quarter of 2026. Finally, the platform business. Our AI power orchestration and compliance stack remains a long-term build.
When complete, it is expected to bring out staking, validation and advisory lines together, giving partners a single point execution across their digital asset operations. These 3 service lines feed one another. Advisory identifies where institutions need infrastructure. Infrastructure generates recurring fee revenue that is uncorrelated NAV. Net revenue recycles into SOL accumulation. A larger, better run treasury is what we believe makes us a more credible counterparty for the executions exploring Solana infrastructure. In the third quarter, that loop began producing revenue. Building on that foundation, we were recently selected by the Hong Kong SAR government offices for attracting strategic enterprises, Oasys as a strategic enterprise, the only digital asset infrastructure company to receive that designation 2026.
As part of the partnership, we are expecting to establish headquarters in Hong Kong. Hong Kong is now where Asia's institutions are coming on-chain, and we intend to be there building alongside them. With that, let me hand over the call to Cosmo to walk through our Treasury and Capital Markets results.
Cosmo Jiang: Thanks, Joseph. Hello, everyone. Last quarter, I said execution has surpassed scale as the key differentiator amongst digital asset treasury companies. The third quarter attested that view from a different direction. After declines in each of the first 2 quarters, SOL rose approximately 60% during the third quarter from roughly $74 to roughly $118. Institutional channels into SOL also broadened. U.S. spot Solana ETFs recorded 11 consecutive weeks of inflows and major investing and wealth management platforms added SOL access. We welcome the extended access to SOL for investors. But we believe the value proposition of Solana Company remains fundamentally advantageous to holding SOL via ETF or a brokerage account.
And ETF or brokerage -- excuse me, SOL, we aim to give you more SOL per share over time. through staking yield above the network average, accretive capital allocation on both sides and operating businesses that generate revenue independent of the SOL price. Moving on to staking performance. Net staking yield is the annualized yields we realized on our stake SOL after validator commissions and related operating costs compared against the Solana network system-wide average over the same period. For the third quarter of 2026. Our average net staking yield attributable to our treasury holdings was 5.9% APY compared with a network average of approximately 4.9% APY representing outperformance of 100 basis points.
That yield comes from careful validator selection, active MEV capture and continuous rebalancing. Staking rewards are automatically restated to compound returns, producing consistent daily on-chain revenue. A portion of our treasury is now staked to our own Pacific Backbone validator as we have translated our learnings from third parties to boosting our internal performance. Our capital allocation framework has not changed, issue only at a premium to net asset value, repurchase only at a discount and judge every decision by whether it adds SOL per share. At the start of the quarter, our shares traded below NAV and we continued to repurchase under our previously authorized stock repurchase program.
During the third quarter, we repurchased 1.4 million shares at a discount to NAV or an average price of $1.96 per share for approximately $2.8 million, bringing year-to-date repurchases to approximately $8.7 million. As SOL recovered and our discount to NAV narrowed, the opportunity changed. On September 30, we priced a registered direct offering with a global institutional investor of 4,359,356 shares at $3.433 per share, a 5% premium to net asset value per share, which operating closed on October 1. The investor also received warrants to purchase an equal number of shares at an exercise price of $3.776 per share. We received gross proceeds of approximately $15 million and net proceeds of approximately $14.3 million.
We used those proceeds to purchase approximately $125,000 SOL. We believe being able to act on both sides of the capital structure as conditions change is one of the most powerful tools we have for creating shareholder value with each action being accretive to SOL per share. As of September 30, 2026, Solana Company held approximately 2.4 million SOL across all categories, including liquid holdings, stake positions and receivables, with a fair value of approximately $288 million approximately $1.1 million of cash and cash equivalents, approximately $1 million of cash receivables and a $15 million payable for unsettled SOL purchases.
Our diluted share count on a treasury stock method basis was approximately 85.2 million shares, including common shares outstanding in the money warrants and in the money stock options and RSUs that equates to 0.0274 per treasury stock method diluted shares after adjusting for unsettled SOL purchases and assumed conversion of cash and cash equivalents and cash receivables to SOL. I will now turn the call over to Madelene Gani, our Chief Financial Officer, for the detailed financial results.
Agustina Tjandrasuwita: Thank you, Cosmo. Third quarter revenue was $3.4 million consisting of $3.3 million of staking revenue, which includes rewards on our treasury and revenue from third-party stake on Pacific Backbone and $23,000 of other revenue. This compares with $697,000 in the third quarter of 2025 and $2.5 million in the second quarter of 2026. For the first 9 months of 2026, revenue was $9.5 million, comprising $9.3 million of staking revenue which includes rewards of our treasury and revenue from third-party stake on Pacific Backbone and $241,000 of other revenue compared with $789,000 in the prior year period.
Cost of revenue for the third quarter was $617,000, resulting in gross profit of $2.7 million or a gross margin of approximately 82%. For the first 9 months, cost of revenue was $874,000 and gross profit was $8.6 million. General and administrative expenses for the third quarter were $3.4 million compared with $11.1 million in the second quarter which included approximately $6.8 million of nonrecurring severance associated with the PoNS divestiture and approximately $5.2 million in the first quarter. For the first 9 months, general and administrative expenses was $19.7 million. Last quarter, we said we expected G&A to decline and normalize towards first quarter levels as the PoNS cost basis came out in full.
Third quarter G&A came in below first quarter levels and includes $0.6 million of noncash stock-based compensation. Turning over to digital asset fair value movements. During the quarter, we recorded an unrealized gain on digital assets and digital asset receivables of $102.7 million, reflecting the recovery in the SOL price, a realized loss on digital assets of $1.1 million and an unrealized gain on our digital asset fund investment of $1.3 million. For the first 9 months, those figures were $15.9 million, $33.5 million and $0.6 million, respectively.
As a reminder, these fair value movements are noncash under U.S. generally accepted accounting principles, they do not affect our cash balance, the tokens earned from staking activities or the quantity of SOL we hold. Income from operations was $103.9 million for the third quarter compared with a loss of $32.7 million in the second quarter. For the first 9 months, loss from operations was $28.4 million. Nonoperating income net was $1.3 million for the quarter, including a $1.7 million gain from the change in fair value of our derivative liability partially offset by other expenses of $0.4 million, which relates primarily to our investment in a licensed Hong Kong trust company.
We reported net income for the third quarter of 2026 of $105.2 million. This compares with a net loss of $352.8 million in the third quarter of 2025. For the first 9 months, net loss was $24.9 million. This compares with a net loss of $366.4 million in the first 9 months of 2025. Turning over to the balance sheet. As of September 30, 2026, we had total assets of $292.6 million, including $1.1 million of cash and cash equivalents $21 million of current digital assets, $14.8 million of digital assets receivable from broker and $252.4 million of long-term digital assets and digital asset exposure across stake positions, restricted assets, receivables and fund investments.
Total liabilities were $19.1 million including a derivative liability of $2.5 million and total stockholder and mezzanine equity was $273.6 million. As of September 30, treasury stocks stood at $8.7 million, representing 4.4 million shares at cost compared with 5.9 million and 2.9 million shares at June 30. Subsequent to quarter end, on October 1, we closed the registered direct offering Cosmo described, issuing 4,369,356 shares and an equal number of warrants for gross proceeds of approximately $15 million and net proceeds of approximately $14.3 million. We also repurchased 1,957,525 shares for $4.4 million. I will now hand it over back to Joseph for closing remarks.
Choon Wee Chee: Thank you, Madeline, and thank you all for joining Solana's Third Quarter 2026 Operating Results Update. This was a milestone quarter for Solana Company as our strategic vision for the integrated flywheel took root and began contributing to revenue. We also continue to advance and deliver on our commitments from the prior quarter. We said we expected to scale Pacific Backbone and recognize our first validator-related rewards in the third quarter. Third-party stake on Pacific Backbone is live and now contributing to our staking revenue. We said we would continue to execute our capital allocation strategy. We repurchased stocks when it traded below NAV and where we had the opportunity to raise capital at premium NAV, we took it.
Both actions serve the same goal, more so behind every share. We intend to continue that positive momentum. Three priorities will define our fourth quarter. First, we plan to grow Pacific Backbone's third-party stake, complete our assessment of Hong Kong as our next validated location and worked with ISO 27001 certification. Second, we plan to use our planned new regional headquarters in Hong Kong to bring more institutions on to Solana and grow our staking offering. Third, we plan to keep compounding SOL per share, having already deployed the proceeds in the SOL with the same discipline we have applied all year. We look forward to updating shareholders on our progress in the quarters ahead.
Operator, please open the call for questions.
Operator: [Operator Instructions]. Our first question is coming from the line of Fedor Shabalin of B. Riley.
Fedor Shabalin: My first one is, could you break down the 100 bps outperformance that was recorded in third quarter. Like specifically, how much comes from validator commission you keep on your own stake and how much from maybe MEV in Jito Tips and priority fees and how much from uptime and both credit performance at Pacific Backbone, if it is.
Choon Wee Chee: Thanks for the questions. That's a detailed fee breakdown. Mady, do you have the details?
Advertisement
Agustina Tjandrasuwita: I don't have it handy right now. I'm happy to follow up on that. But essentially, during -- for the $3.4 million of revenue, we have 31,000 of staking rewards, of which approximately 29,000 units pertain to our individual SOL and the rest from third party.
Fedor Shabalin: Okay. And maybe on a follow-up on this on sustainability of this outperformance. Should we think that this spread is durable going forward?
Choon Wee Chee: Sorry, one more time? What's durable, Fedor?
Fedor Shabalin: This outperformance versus generic Solana staking yield.
Choon Wee Chee: Okay. You're talking about how we manage our own Solana with third party. Are you talking about the Solana we are staking with our network?
Fedor Shabalin: Yes. I mean, just want to figure out if it's fair to assume that your outperformance, this 1%, is it fair assumption to keep it going forward for future periods? Or if it's kind of -- it depends on many things.
Choon Wee Chee: Fedor, I think -- I guess we're not providing a forward-looking statement here. I think if you look at our performance in the last 3 quarters, we've been managing our SOL inventory quite well with other staking partners that provide services to us. And the best person to talk about this is probably Cosmo. But I would think that the way we're managing it with third party is still going to continue. And I would think that we should be able to continue to outperform. As for the SOL that had been stake on our own validated infrastructure after the beta and we can see performance getting better and better. I think we are doing quite well.
Let me maybe actually stop here and if Cosmos has anything to add.
Cosmo Jiang: On the last 3 quarters -- yes, yes. I think you can look at our track record from the last 3 quarters as a good directional -- directionally, like we have been able to perform pretty consistently above the benchmark. There are a number of things that go into that. One of them is validator selection. There is a fair amount of dispersion amongst the validators that -- and we tend -- and there are certain customizations that we can agree to with our validators to get to these higher yields.
I'd say that the other factor that's been within our control is our ability to leverage our strong relationships and alliances with these validators to get differentiated economics that they may not offer to other parties. And so both of those, I think, are pretty durable. I think some things that are less controllable and we'll see is that staking economics on Solana do change over time. Recently, with the Solana's Alpenglow upgrade, there has been some changes to the amount of additional rewards that go to leaders. And that's created a lot more volatility in the stream of validated rewards, but also -- and so like that is one consideration.
And so there may be more randomness, a little bit more randomness going forward. And then the other consideration is that there have been major upgrades across one of the large validator clients recently that had been lagging for a while. And so that validator client has now come back to parity with some of the other major value clients. And so it's possible that the average is getting pulled up because some people are catching up in their techniques that other people had.
And when there's less dispersion amongst validators, then inherently -- if we're picking the best, but the best are not -- other people are catching up to the best and the gap may also close a little bit. So we're seeing some of those impacts this quarter. But these are things that do vary over time and there are constantly new techniques that are being innovated. And so we anticipate that we'll always -- we should be able to maintain some performance gap, but that gap might be volatile quarter-to-quarter.
Fedor Shabalin: That's super helpful. And lastly, more broad, like Solana ignite real-world assets moving up notably yet Solana tuck-in is down roughly 30% from its late September high. Just maybe it's a good time to take a step back and rehash what is the transmission mechanism from tokenization to Solana demand, yes, if you can just outline the basics.
Cosmo Jiang: Yes. Look, what we've been saying is that blockchain activity tests tend to have some reflexivity to asset prices. And so as the prices come down, we do see activity tend to trend down. And this past quarter, when we saw activity pick up again, transaction fees did also pick up on Solana. We also saw the growth of real-world assets and in particular, tokenized equities over this last quarter, really grow across blockchains in general, but also on Solana and that did lead to more transaction fees, which leads obviously to better economics for stakers but also holders of Solana.
And so we feel very optimistic on a number of these drivers continuing, including the idea of tokenized equities can be traded more broadly across the world in larger volume and more DeFi applications getting involved in becoming these next-generation on-chain prime brokers to really even further enable tokenized equity to take off. And then we have the advent of prediction markets that are being experimented on Solana. And certainly, perpetual features are also a big growth avenue for Solana.
And so we're hopeful that some of these in addition to potentially new areas like collectible trading and other things -- collectible trading, stablecoin transactions payment volumes may continue to increase on the Solana blockchain and all that should result in higher transaction fees and higher economics for Solana owners.
Fedor Shabalin: That's very helpful...
Cosmo Jiang: And I want to just circle back actually on one of your questions on the staking yield, we were able to pull up the numbers of the 5.9% APY that we had in the quarter, roughly 5.1% was inflationary rewards or emissions, roughly 50 basis points for a block rewards and roughly 20 basis points were MEV.
Operator: Our next question is coming from the line of Matthew Galinko of Maxim Group.
Matthew Galinko: Maybe first, can we get some sense directionally of OpEx or how we might think OpEx moves in fourth quarter or even into the first quarter, particularly as you're signaling opening it off in Hong Kong and further build out of your validator infrastructure. So I'm just curious directionally, we should be moving up or even normalization towards that first quarter level?
Choon Wee Chee: Good to see you online again, Matthew. Mady, do you want to take that question?
Agustina Tjandrasuwita: Sure. Thanks for asking that question, Matthew. As we don't give any guidance on forward-looking OpEx, right, I think in general, we continue to optimize for our G&A. But at the same time, right, as the business grows, we would expect an increase in expenses. So to answer your question, right, we would probably normalize between what our current rate is and what our historic rate, something in between.
Matthew Galinko: Okay. And maybe you provided a few numbers around your third-party staking volumes. Can you give us maybe just qualitatively, is the trajectory there in line or exceeding internal expectations? Or how is that performing relative to what you were targeting?
Choon Wee Chee: I guess, from my perspective, if you look at third-party SOL coming in, frankly, that's above our expectation with the whole infrastructure only came online in July of some beta. And if you look at it, I guess, the external delegation only started like very late July, I think, like July 31 and they start off with a few hundred thousand and we thought we'll take -- because we haven't even started marketing very aggressively because of the database. And then it actually went up a lot quicker than we thought.
I think, again, this could be -- now that we are going to build another node in Hong Kong, and then we are going through the ISO certification and becoming -- getting close to the end of the year, I am being, let's say, if I want to be prudent, I would think that the kind of growth rate we're seeing in this third-party -- so going from 300,000 to over 1 million of SOL is probably going to slow down a bit in the fourth quarter. I don't think it's going to go from like here on to $3 million by the end of the quarter, this is just an example. So let's hope for the best.
But I would still -- I would think that by first quarter next year, when it comes back as the more adoption of Solana happened with the major financial institutions in the region. We'll see more third parties coming to our validated infrastructure.
Matthew Galinko: Great. Thank you.
Operator: Thank you. And that does conclude today's Q&A session. I would like to turn the call back over to Joseph for closing remarks. Please go ahead.
Choon Wee Chee: Great. Thank you. Well, I thank everyone for joining the call and also for the good questions. If you have any more questions, please write to us. We will respond to and you want to have a separate meeting to discuss about anything. Happy to arrange you as well. Thank you very much.
Operator: Thank you for joining today's program. This does conclude today's program and remarks. Thank you so much. You have a great day, and you may disconnect.
Should you buy stock in Solana right now?
Before you buy stock in Solana, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Solana wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $341,157!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,037,753!*
Now, it’s worth noting Stock Advisor’s total average return is 834% — a market-crushing outperformance compared to 207% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of November 12, 2026.
This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. Parts of this article were created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.
The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Source: “AOL Money”
