TON Strategy Company Q1 2026 Earnings Call - CEO Transition & Staking Revenue Surge Amid $88M Unrealized Loss

Unknown, Operator/Moderator, TON Strategy Company: Good morning, and welcome to TON Strategy Company’s 1st quarter 2026 earnings conference call. Joining us today are Chief Executive Officer, Kevin Wilson, and Chief Financial Officer, Sarah Olsen. Earlier today, the company filed its quarterly report on Form 10-Q for the quarter ended March 31st, 2026 and issued a press release with its financial results. Both are available in the investors section of the company’s website. This call will also be available for webcast replay on the company’s website. Before we begin, I would like to remind everyone that today’s call includes forward-looking statements within the meaning of the federal securities laws. These statements are based on management’s current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements.

Please refer to the company’s filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2025, and its quarterly report on Form 10-Q for the quarter ended March 31, 2026 for a discussion of these risks and uncertainties. The company undertakes no obligation to update any forward-looking statements except as required by law. With that, I would like to turn the call over to TON Strategy Company’s CEO, Kevin Wilson.

Kevin Wilson, Chief Executive Officer, TON Strategy Company: Thank you, operator, and thank you everyone for joining us. For today’s call, I’ll start by framing how I see TON Strategy’s position today, why we believe the TON blockchain matters, and why we believe our company is playing a clear role as a U.S.-listed public company dedicated to Toncoin and supporting the TON ecosystem. Sarah will then walk through the first quarter financial results and treasury update, and I’ll come back with a few closing thoughts. As this is my first earnings call as CEO, I want to share how I view the foundation already in place and the opportunity to build from where we are presently. TON Strategy Co is the largest public company treasury dedicated to Toncoin, and we are one of the largest validators of the token.

As of March 31, 2026, we held approximately 221.9 million Toncoin in total, including approximately 221.2 million Toncoin staked. Based on TonStat data, our holdings represent approximately 4.29% of all Toncoin, and the Toncoin staked through our infrastructure represents approximately 26.18% of the TON network. We have a substantial Toncoin position, active staking operations, a strong balance sheet with no debt, and the custody and reporting infrastructure needed to execute our strategy with transparency. In other words, this is no longer a set-up story. The treasury is established with assets substantially staked, and the company has now completed 2 full quarters of staking operations. My focus is on taking that foundation and turning it into broader market recognition and long-term shareholder value.

I officially stepped into the role as CEO on May fourth, so I’m not gonna lay out a rigid roadmap today. The direction we will take the company is clear, and I want to share how we are thinking about the areas we can most directly influence. First, we will continue to manage the treasury through a long-term per-share value lens. We hold approximately 221.9 million Toncoin as of quarter end, including approximately 221.2 million Toncoin staked. Going forward, we are focused on making the right capital allocation decisions that support growth in Toncoin held per share over time. We will continue to maintain appropriate liquidity to execute the strategy and run the company platform while evaluating capital allocation opportunities thoughtfully and with discipline.

Second, we see an opportunity to communicate with the market more actively around both the TON network thesis and our company model. Toncoin is currently less understood than major tokens in the broader U.S. public markets. Part of our job is to explain why Toncoin matters, why the TON blockchain network is differentiated and built to support the financial infrastructure of the future, and why our company is built to provide exposure to that opportunity within a public company structure. Third, over time, we intend to prioritize pathways to support deeper liquidity and market access around Toncoin. We expect to be very thoughtful and deliberate in this area. Liquidity, market structure, and institutional access are important to the development and adoption of the TON ecosystem. They are also relevant to how investors evaluate our company.

We intend to explore appropriate ways to support that development over time. Fourth, we’re focused on aligning our expenses and investment with the company’s core treasury strategy and highest return opportunities. This is an area where we’ll be thoughtful so that the operating platform is directly supporting the core strategy. That is how we are thinking about the job in front of us. Now I’d like to spend a few minutes discussing why the TON blockchain is important and compelling. We believe the TON blockchain is becoming increasingly relevant as blockchain activity moves towards faster, lower cost, high volume use cases. The key difference between TON and other chains is that it combines technical performance with exceptional distribution reach. Telegram gives the TON network a unique distribution advantage compared to most blockchains. Telegram has a global billion plus user base. Users communicate there and interact with communities there.

They’re using bots and Mini Apps and increasingly engaging with digital services inside the Telegram ecosystem. The TON network is developing within an existing consumer environment where digital interaction is already happening. From a technical perspective, the TON blockchain’s architecture is designed for scale. dynamic sharding and asynchronous message processing allow activity to be distributed across the network rather than forcing each application or transaction through a single lane like some other blockchains. The network is built for many transactions and applications to run simultaneously, which is critical for supporting consumer scale functions. Recent network upgrades strengthen that case. In April, the TON network implemented upgrades that reduced block times, shortened transaction settlement times, increased throughput, and significantly lowered transaction fees. Those changes make the network faster, more cost efficient, and better suited for applications that require frequent transactions.

Public ecosystem data also shows TON among the fastest Layer 1 blockchains by finality, which reinforces the importance of speed and settlement performance as part of the TON thesis. The impact of the recent upgrades was visible in the economics of the network as well. Gross staking yields increased to 1.39% in April from 0.34% in March, representing approximately a 4-fold increase month-over-month. On an annualized basis, the April gross staking yield was approximately 16.7%. TON Strategy was well-positioned to benefit from that uplift through its staking infrastructure. The technical and economic improvements are meaningful for the practical utility and performance of payments, developer tools, gaming, and other Telegram-based applications. We believe the TON network is particularly relevant for emerging agentic AI use cases.

To operate reliably inside consumer applications and payment flows, AI agents need low cost, low latency ways to act. On the TON network, an AI agent can operate through its own on-chain wallet or smart contract account. The agent has its own address on the network, a way to send and receive payments, and programmable rules for how it can interact with applications and services. The agent can do more than just recommend actions to users. It has the potential to pay, settle, and interact with services directly in the TON. Since the accounts on TON are set up as programmable smart contracts, they can include permissions and logic for multi-step activity on-chain instead of relying on separate off-chain coordination. Telegram adds the distribution. Agents can live directly inside chats as bots of Mini Apps where users are already active.

Paired with TON payments, AI agents can help create a much more seamless user experience. Users can interact conversationally, while agents can potentially take actions and transact in the background. We think that combination of distribution, payments, programmable accounts, and low cost settlement is one important reason that TON is differentiated for high volume consumer and AI agent use cases. This brings us to TON Strategy Company and why it matters. For many investors in the U.S. in particular, direct exposure to Toncoin can be difficult or impractical. In 2025, in coordination with the TON Foundation, Toncoin became tradable as a spot cryptocurrency on Coinbase, Robinhood, and Gemini, which we view as an important first step in expanding U.S. access. Still, broader institutional services around Toncoin, including custody, staking, and prime services are earlier in development.

TON Strategy Company is built specifically to provide transparent, institutionally managed exposure to Toncoin through a regulated public structure. The value proposition extends beyond access. We hold and stake Toncoin through institutional custody and segregated staking infrastructure. We also bring public company reporting in a scaled, long-term per share value framework to the way the treasury is managed. In the digital asset treasury market that is still maturing, we believe this level of operating discipline and transparency matters a great deal. With that, I want to acknowledge the team that’s already in place. This is a strong, lean group with deep institutional experience across digital assets, capital markets, reporting and compliance, including experience building and managing digital asset strategies inside top-tier financial institutions. Our experience gives us the foundation needed to execute. In Q1, this model continued to demonstrate productivity.

We earned approximately 2.2 million Toncoin during the quarter through staking activities and recognized approximately $3 million of staking revenue. We ended the quarter with approximately 221.2 million Toncoin staked. Approximately $35 million of cash and restricted cash. Sarah will now walk through the first quarter financial results and treasury update in more detail. Sarah?

Sarah Olsen, Chief Financial Officer, TON Strategy Company: Thank you, Kevin, and good morning, everyone. Before turning to the quarter, I also want to welcome Kevin to the CEO role. Kevin brings the ideal background for where our company is today and is well-positioned to lead it into the future. He has built and led institutional markets businesses at Citi, and more recently worked at the intersection of digital assets, trading infrastructure, and blockchain-based prime brokerage initiatives at Integral Development Corp, a Palo Alto-based Fintech. His unique blend of global markets experience, institutional relationships, and digital asset fluency is directly relevant to the work ahead as we build a more established public company platform dedicated to supporting Toncoin and the TON network. We’re very excited to have him join and lead the company into its next stage.

For the first quarter, our results reflect the continued operation of the Toncoin treasury strategy, including staking activities alongside our legacy operating businesses. Q1 was our second full quarter of staking operations, and the treasury continued to perform as intended. During the quarter, we generated approximately 2.2 million Toncoin through institutional custody and segregated staking infrastructure and recognized approximately $3 million of staking revenue. This is an important part of the model. Staking provides an ongoing revenue opportunity tied to our Toncoin position and allows the treasury to remain productive while we continue to hold and stake the token at scale. As of March 31, 2026, we held approximately 221.9 million units of Toncoin, including approximately 221.2 million units staked with a fair value of approximately $272 million.

We also ended the quarter with approximately $35 million of cash and restricted cash. Subsequent to quarter end, Toncoin appreciated significantly amid recent network upgrades, Telegram’s announcement that it plans to help drive TON ecosystem growth and infrastructure development, and broader strength across digital asset markets. As of May 6, 2026, the approximately 221.9 million Toncoin held by the company had an estimated fair value of approximately $433.3 million. The combination of staking productivity and a clean balance sheet with meaningful liquidity and no debt gives TON Strategy flexibility as we continue to execute the treasury strategy. Turning to the income statement, total revenue was $5.3 million and included approximately $3 million from staking activities as well as contributions from the company’s legacy operating businesses. Gross profit was $4 million.

Total costs and expenses were $7.8 million, reflecting costs associated with treasury operations, personnel, reporting, compliance, and legacy operating businesses. Loss from our operations was $3.9 million. Net loss before income taxes was $91 million. Net loss included an $87.9 million unrealized net loss on crypto assets, reflecting fair value changes in Toncoin holdings during the quarter. From an operating perspective, the treasury remained deployed, staking was active, and rewards were generated. Inherently, the underlying asset will move from period to period, but our focus is on the areas we can control, including staking execution, balance sheet strength, liquidity, and supporting the long-term development of the TON ecosystem. We expect to continue updating most company-reported treasury metrics through our regular quarterly and annual public filings, consistent with our long-term treasury approach.

Please refer to our analytics dashboard on our website, tonstrat.com, for the latest market-based and derived treasury metrics alongside the company-reported data. I’ll now turn it back to Kevin for closing remarks.

Kevin Wilson, Chief Executive Officer, TON Strategy Company: Thank you, Sarah. To close, I want to bring the discussion back to the core of the opportunity. TON Strategy has scale. We are the largest public company treasury dedicated to Toncoin. Substantially all of our Toncoin is staked. Our company has a productive treasury. Staking creates an ongoing revenue opportunity tied to the asset we hold and gives us a way to increase Toncoin held over time. We have a strong public company structure that brings transparency, reporting, and institutional execution to Toncoin exposure. The work in front of us is to make that structure better understood by this market and to execute consistently against the pieces we control. This includes how we manage the treasury and evaluate capital allocation, how we communicate the TON network thesis publicly, how we can support market access around Toncoin, and how we can align company resources around the core strategy.

We are excited about the opportunity ahead to position TON Strategy as the company built for public exposure to Toncoin and supporting the financial infrastructure of the future. We look forward to updating you on our progress. Thank you for joining us this morning, and thank you to our shareholders for your continued support. Operator, that concludes our prepared remarks.

Unknown, Operator/Moderator, TON Strategy Company: Thank you. This concludes today’s conference call. Thank you for participating. You may now disconnect.