Full Transcript: DeFi Development Q2 2026 Earnings Call

DeFi Development (NASDAQ: DFDV ) held its second-quarter earnings conference call on Thursday. Below is the complete transcript from the call. This content is powered APIs. For comprehensive financial data and transcripts, visit Access the full call at Summary DeFi Development reported a strategic focus on controlling operational costs, leverage levels, and maintaining significant management stockholding to enhance shareholder value.

The company highlighted its $125 million convertible debt designed to withstand market volatility, with no margin calls even if Solana prices drop significantly. Guidance for June 2027 has been pulled, but the target of one SOL per share by December 2028 remains, emphasizing long-term Solana per share growth. The company discussed its strategic initiative of leveraging up in bear markets and equitizing leverage in bull markets, having retired a portion of its convertible debt at a discount. DeFi Development outlined ongoing challenges in raising preferred equity due to Solana's price decline, focusing on simplifying its capital structure for future opportunities.

Operational highlights included Solana's significant network upgrades, which are expected to improve transaction speed and performance, as well as its continued uptime and transaction growth. Management emphasized that DeFi Development offers leveraged exposure to Solana, distinct from direct SOL or ETF purchases, by aiming to increase SOL per share over time. Full Transcript Dan Kang, Chief Strategy Officer and Head of Investor Relations Good morning. Welcome to DeFi Development's second quarter 2026 earnings update call.

I'm Dan Kang, Chief Strategy Officer and Head of Investor Relations. Joining me today are Joseph Onarati, CEO; John Hahn, CFO; and Pete Humiston, CMO. Yesterday, August 12th, after market close, we issued a shareholder letter with our financial results and commentary for our second quarter of 2026. These items are also posted on our Investor Relations section of our website.

Before we begin, I would like to remind everyone that we will be making forward-looking statements during this call that involve a number of risks and uncertainties. Actual results may differ materially due to risks and uncertainties which are outlined in our filings with the SEC, including our Form 10-K and Form 10-Q. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. These factors are described under Forward-Looking Statements in our shareholder letter and in our most recent filings with the SEC.

That being said, we urge you to consider these factors and remind you that we undertake no obligation to update the information contained in this call to reflect subsequent events or circumstances. You should be aware that these statements should be considered estimates only and are not a guarantee of future performance. With that, let's kick off. Joseph, John, thank you for joining us and Pete, welcome to your first earnings call.

For those who haven't met Pete, he's not only our CMO but leads all of our Solana-specific research initiatives. He's helped spearhead a number of reports that have gotten really good traction among our investor base and excited that investors finally get to put a face to the man who puts out all of our killer content. So welcome. All right, with that let's get going on Q&A.

So first question, let's start with the key framing of the letter. We started—or you started—this letter around the concept of structure over path. Unpack that for us a bit. What does this actually mean in practice and why should an investor care about structure more than other things like MNAV?

Joseph Onarati, CEO So great question. Let's unpack it a bit. Back in April of '25 when we kicked off the Solana treasury, we were the first and only non-Bitcoin digital asset treasury in the US and, of course, we were really inspired by Michael Saylor and his strategy. But we understood back then, and even now, that we have to innovate and build on the foundation that they set.

And for us that included owning and operating our own validator infrastructure and deploying our treasury on chain and also finding other ways to enhance yield in a risk-adjusted way. Of course, if we're anchoring to strategy, then the investor education is kind of automatically geared toward MNAV and understanding how digital asset treasuries are valued relative to each other. But at the end of the day, that's not something that we really control. So part of what we tried to do this quarter was to clearly identify the things that we control and really focus on those areas.

So things that we control include cost to operate our business; the amount of stock that the founding team and management holds—over 20% of the company; and the fact that we own the super-voting preferred shares which shield us from activist takeover. But maybe most importantly, we control our leverage levels. And leverage is, in particular, something we're proud of here. It allows us to be amplified expression of Solana.

So, for instance, if you wanted leveraged or enhanced exposure to Solana, all of the alternatives have more risk and a higher cost. So a core feature of our business is that we have $125 million of convertible debt. The earliest maturity on that debt is April of 2030. And this debt is designed to withstand a prolonged period of weakness in the crypto market.

It's designed to not be margin called. Solana could drop 90% tomorrow and that convertible debt wouldn't come due. We want to make the story for DeFi Development for investors as simple as possible. You've heard us use the mantra SOL on steroids.

Well, the idea is that leverage and the ability to grow SOL per share enable us to have a natural boost to SOL, the underlying. Now, SOL itself is down considerably year to date, which doesn't feel great. But we're confident that in a year from now, things will look very different. And with DeFi Development's leveraged exposure, DeFi Development passes on that leveraged upside to shareholders.

Dan Kang, Chief Strategy Officer and Head of Investor Relations Thanks, Joseph. Next question, when will the next major purchase of SOL be? I'll take that. It'll be super quick.

As soon as we can make it happen. Obviously dying to buy SOL here, but capital markets in general have not been great. I think this is largely a function of investor attention being diverted from crypto, as we outline in our shareholder letter. So nothing to share on this front at this point in time, but stay tuned.

All right, number three, a key pillar of the story is your convertible debt. The letter also describes retiring convertible debt and leverage levels that are well above 100%, meaning your debt exceeds the market value of your treasury. Walk us through how you're simultaneously levering up and paying down, and what happens to that ratio if SOL falls another 30%. John, you want to take that?

John Hahn, CFO So when the market price of the debt is attractive, we delever to relever later. So we've disclosed in our shareholder letter that we've retired a portion of our convertible debt at pretty attractive discounts to par, even though our July 2030 note isn't due for another four years. The fact that we are retiring some of the debt at these pretty attractive levels simplifies our cap structure and moves us towards the ideal end state, which is a capital stack composed mostly of preferred equity in the long term. So the strategy is pretty simple.

We run highly levered in bear markets and aim to equitize that leverage in bull markets. That said, we're not delevering currently for its own sake. When the market offers us the chance to clean up the stack at discounts so we can relever later on better terms, we'll take that trade every time. Thank you.

Dan Kang, Chief Strategy Officer and Head of Investor Relations Thanks, John. Next question. You've pulled June 2027 guidance, but you're keeping the one SOL per share target for December 2028. Can you talk about this decision a bit further?

John, another one for you? John Hahn, CFO Yeah. So basically the way to think about this is that we manage DeFi Development for long-term Solana per share growth, which is not purely a point-in-time estimate. So last summer we were pretty aggressive on our guidance for current June 2026, and our growth came in really different bursts—really rapid growth in early 2025 followed by slower growth in the back half of the year.

That's basically the nature of how that's grown and a function of crypto markets and TradFi capital markets. So it depends on the opportunity, depends on how these markets are trending at any given point. So we're still confident on the trajectory of the business, but we didn't want to get socked into a false sense of precision. So over a multi-year horizon we think the cycle noise washes out and the structural drivers do the work.

Investors can already see the organic floor from our staking yields and DeFi activities, and that compounds regardless of where Solana trades. So then the question is how much inorganic growth we layer on top through capital markets activities. So one could, depending on how you do the calculation, preferred equity issuances alone—depending on each individual person's and investor's assumptions—could drive SOL per share growth well in excess of our trailing twelve-month growth rate. So net-net we have multiple paths and opportunistic levers to pull to eventually reaching one SOL per share.

Thank you. Dan Kang, Chief Strategy Officer and Head of Investor Relations Thanks, John. Helpful. All right, next question.

Preferred equity has been the top capital raising priority since at least Q1. Still hasn't happened. What is actually gating it and, realistically, who is the buyer? I'll take that one.

So I think realistically the biggest gating factor is just the price of SOL. It's down considerably year to date over the last year. And you know, I do want to make clear that we're not just going to issue a preferred instrument at any price just to say that we got it done, right? A bad preferred is worse than no preferred.

The DAP preferred complex obviously came under pressure in June with broader crypto prices as well. Digital credit, in quotation marks, is still a fairly nascent asset class, so there's a lot of education that needs to get done. So what changes this calculus for us? Obviously there's this—the crypto cycle itself.

You know, SOL jumps to $100 tomorrow, that would drastically change the calculus both from our own, let's call it creditworthiness, as well as the risk investors are willing to underwrite. And then there's Stretch. Likely need Stretch to reclaim par to regain some investor confidence. You've seen some strong moves as of late out of Michael Saylor and the company.

So that's obviously trending very well. And I'd point out that everything we did this quarter is about being ready for when the window for Chad actually opens. You know, retiring converts at a discount, taking our cost base down, cleaning up the balance sheet. I think this will help to show up to market with a simpler capital stack and a clean digital credit story that's really unique to DeFi Development and really unique to us as the leading Solana treasury company.

All right, next question. This is a good one for Pete here. What are the Solana use cases and upgrade projects you are most excited about? Pete, you want to take that?

Pete Humiston, CMO Yeah, of course. Thanks, DK. So on the use case front, I mean, there's always various different sectors and verticals we're keeping our eyes on, but as of late, it's really centered around agentic finance and agentic payments, as well as just general adoption of tokenized equities or real-world assets itself. Meaningful interest in both of those sectors on Solana.

You know, we really do expect those trends to persist in the quarters ahead. Switching over to just kind of network upgrades itself: in May—excuse me, in May—Appenglow, which is actually going to be one of the network's biggest upgrades ever—that's going to take finality from 12 seconds down to 100 milliseconds, which is going to be on par with Visa—actually entered into community validator testing. Not only that, but in July we also saw validator registration open up, marking yet another kind of step towards what is expected to be, say, an August or October launch. So that is going to be a meaningful lift in terms of performance.

And we've really started to see a lot of progress made over the past several months. You know, not only that, there was another big upgrade to the network that caught people's attention: compute limit was actually increased by 66%. So a big lift in performance as well. And that's effectively going to just allow more room for the network to process activity during higher periods of chain demand.

You know, there's been two other kind of developments too that I'd like to focus on, and this is really centered around also the value accrual and capture of the token itself. So there were two SIMDs—or Solana Improvement Documents—that entered the discussion phase ahead of what is soon going to be a vote. There was SIMD-0550. 5% terminal inflation rate in half the amount of time.

So that's on the supply side. Now on the demand side, there is another SIMD, SIMD-0553. Instead of the network relying on flat transaction fees, it's actually going to introduce resource-based fees that are burned. So this is just going to create a much stronger link between network activity and SOL value accrual.

And we've wrote extensively about both of these Solana Improvement Documents, so feel free to check out the blog to learn more. Dan Kang, Chief Strategy Officer and Head of Investor Relations Thanks, Pete. I'll also say for any investors tuning in, you should feel free to reach out to us to nerd out about any of these things. Pete and I are always happy to hop on the phone and chat through this stuff.

It's really, really fascinating. So, all right, next question. Recently, the treasury accelerator was framed as proof of a culture of experimentation that peers couldn't match. Then DeFi Development UK shuttered, now it's closed.

What did you learn? What are the remaining positions? And how do investors know the next strategic initiative won't follow the same arc? I'll take this one, guys.

So I actually think the program proved what it said it would prove. But that doesn't mean that shutting it down isn't the right thing to do at this point in time. So what do I mean by that? If you look historically at some of the wins, right, ZeroStack was a good win for us.

The way it was structured as a SOL-denominated convert—no upfront cash out the door—we recovered the foregone yield at settlement, was accretive to both NAV and SOL per share. I think that was a very clear example of the types of bets we like taking, with really good asymmetric risk/reward. And Allied Architects, which we announced recently, was similarly structured with small upfront cost, good optionality attached. So we don't think our thesis on, let's call it, DAT-on-DAT investment was wrong.

What it did do, in hindsight, was make our story just a little bit harder to tell. So, for example, an investor trying to underwrite DeFi Development would then have to also go and underwrite a UK vehicle or a DAT-on-DAT convertible note, right? It would just introduce some additional layers of complexity. And in a market where, you know, debt prices are obviously compressed and investor attention is scarce, complexity just becomes an unnecessary barrier, if you will.

So we do want to be clear that on our remaining position with Allied Architects, we're not dumping it. If we have something to share there, we will. And we do expect this to be accretive to SOL per share. But look, I think in our letter we made it pretty clear that anything we do has to sharpen our identity as leveraged SOL exposure rather than dilute it.

And I'd point you to what we did this quarter rather than what we've been saying on this front—whether that was publishing the SOL Boost framework that puts this front and center, shutting down the TA program that we feel had some pretty good wins as well, and then of course making it clear that we were going to minimize the complexity of the business—whether that's finding some additional efficiencies to cut costs or minimizing our overall on-chain surface area so that investors didn't have to underwrite smart contract risk at very small protocols. We do have a pretty high bar for anything outside of, let's say, the core business—SOL purchases—right now.

And you should expect that to remain the case. All right, next question. Your organic yield thesis assumes somewhere around 8% to 11% as a normal range versus today's lower cyclical troughs. But native staking APY is down year over year.

And your own Solana Reborn research argues for network changes that push the net issuance closer towards zero, which would compress staking rewards further. What gives you confidence that you will return to higher yields over time? Joseph, you want to take that? Joseph Onarati, CEO Sure, yeah.

Thanks. Well, first, our organic yield has never been just the base stake rate because we run our own validators and the validators are fairly high performing. And then historically we've generated additional yield through on-chain deployment, namely stake looping as the primary strategy, and we expect to continue to do that going forward. 5% and 6%.

But like I said, we're definitely generating more than that.