AVAX One (AVX) Q2 2026 Earnings Call: Revenue Rises as Digital Asset Losses Weigh

AVAX One (AVX) reported higher Q2 2026 revenue following its shift to an Avalanche digital asset treasury strategy. However, unrealized digital asset losses and other non-cash charges drove a substantially wider GAAP net loss.

Key Takeaways

• Q2 2026 revenue increased to $2.8 million from approximately $500,000 in Q2 2025, including $2.1 million of staking rewards and approximately $700,000 from Bitcoin mining.
• The company recorded a $35.1 million net loss, or $4.41 per diluted share. Excluding specified non-cash expenses, adjusted net loss was $2.2 million, or $0.27 per diluted share.
• Operating expenses reached $36.2 million, including $33.0 million of non-cash charges. The largest item was a $29.8 million unrealized loss from changes in the market value of digital assets.
• Digital assets had a total net value of approximately $93.5 million at June 30, including 13.2 million AVAX tokens valued at $86.3 million and approximately 700,000 TAVAX tokens valued at $5.3 million.
• Total liquidity was approximately $21.1 million at quarter-end, down from $27.6 million at December 31. Management said existing liquidity and the ability to leverage or liquidate assets earned through staking and mining should fund operations and growth without additional capital.
• After quarter-end, AVAX One restructured convertible debentures and reduced the related principal balance by approximately $6.8 million.

Key Financial Data

The $33.0 million of non-cash charges included a $29.8 million unrealized digital asset valuation loss, a $2.6 million impairment of Treehouse liquid staking tokens and approximately $600,000 of share-based compensation and depreciation expense.

Quarter-end liquidity consisted of $11.4 million in cash and cash equivalents, $5.4 million in restricted cash and a $4.3 million escrow receivable.

Business and Operating Performance

AVAX One operates through three strategic pillars: its Avalanche digital asset treasury, Bitcoin mining, and selective AI and high-performance computing development.

The company currently owns more than 14 million AVAX tokens and equivalents, including approximately 800,000 deployed into Treehouse. Since launching the treasury strategy in November 2025, AVAX One has generated approximately $4.7 million in staking revenue. Management reported an annualized staking yield of approximately 5.3%.

At June 30, the portfolio included approximately 13.2 million AVAX tokens with a net value of $86.3 million, approximately 700,000 TAVAX tokens valued at $5.3 million and approximately 31.2 Bitcoin valued at $1.8 million.

Bitcoin mining continues across facilities in Alberta and Ohio. The company added 220 mining machines to its Alberta operations over the past year and continues to operate its 5-megawatt Bald Eagle facility in Ohio, which is powered by flared natural gas.

For AI infrastructure, AVAX One is evaluating a power-first model in Alberta using behind-the-meter natural gas generation and modular construction. Its initial Redwater inference pilot could convert approximately 100 kilowatts of excess mining capacity to AI workloads.

Management also highlighted continued Avalanche ecosystem development in institutional settlement, tokenized assets, validator participation and consumer applications. Examples included TACIT’s migration of LINK to a dedicated Avalanche Layer 1 and FIFA Collect’s use of an Avalanche-powered blockchain during the 2026 FIFA World Cup.

Risks and Areas to Watch

• Digital asset price movements materially affected quarterly results, including the $29.8 million unrealized valuation loss.
• Treehouse liquid staking tokens incurred a $2.6 million impairment during the quarter.
• Total liquidity declined to $21.1 million from $27.6 million at the end of 2025.
• The Redwater AI inference equipment had not yet been deployed at the time of the call, so the company had no operating or economic results from the pilot.
• Avalanche’s Helicon upgrade was active only on the Fuji testnet. Proposed validator changes were not yet live on the mainnet.

Analyst Q&A Highlights

Management said the search for a permanent CEO is focused on candidates with experience relevant to the company’s three pillars: the Avalanche treasury, Bitcoin mining and AI infrastructure. The company did not provide further detail on the search.

AVAX One remains focused on Alberta AI infrastructure opportunities, primarily through a partnership with Blue Flare. Management said the Redwater inference pilot remains on schedule, but long equipment lead times have delayed deployment. The company plans to update the market after operating data becomes available.

Full Earnings Call Transcript

Complete Earnings Call Transcript

Management Remarks

Operator

Good afternoon, everyone, and thank you for participating in today's conference call to discuss AVAX One's financial and operating results for the second quarter ended June 30, 2026. Joining us today are the company's Interim Chief Executive Officer and Chief Operating Officer, Pete Wiley, and the company's Chief Financial Officer, Chris Polomeni. By now, everyone should have access to AVAX One's second quarter 2026 earnings press release, which was issued earlier this afternoon at approximately 11 a.m. 5 p.m. Eastern Time. The release is available in the investor relations section of the company's website at www.avax-one.com. The webcast replay of this call will also be available on the company's website. The following management remarks will open the call up for your questions. Please be advised this conference call will contain statements that are considered forward-looking statements under the Private Securities Litigation Reform Act of 1995.

These forward-looking statements are subject to certain unknown and unknown risks and uncertainties as well as assumptions that could cause actual results to differ materially from those received in these forward-looking statements. These forward-looking statements are also subject to other risks and uncertainties that are described from time to time in the company's filings with the SEC. You are urged to not place undue reliance on any forward-looking statements, which are being made only as of the date of this call. Except as required by law, the company undertakes no obligation publicly update or revise any forward-looking statements. For important risks and assumptions associated with such forward-looking statements, please refer to the company's SEC filings. I will We will now turn the call over to Pete Wiley, AVAX One's Interim Chief Executive Officer and Chief Operating Officer. Pete?.

Peter Wylie

Thank you, Operator, and thank you all for joining us today. We are seeing continued development across the Avalanche ecosystem that has reinforced our conviction in the network's long-term potential and the strategic value of AVAX1's position within it. That progress is becoming increasingly visible across a broad range of applications, including institutional settlement, tokenized assets, validator participation, and large-scale commercial platforms. In our view, the growing breadth and sophistication of these use cases demonstrate that Avalanche is moving beyond experimentation. and toward real-world deployment. That evolution is particularly significant in financial services, where institutions are increasingly focused on the practical applications of blockchain technology in payments, tokenization, settlement, and other financial workflows. We believe Avalanche is well-positioned to support that transition. architecture enables institutions to build purpose-built blockchain environments tailored to their operational regulatory and performance requirements or remain remaining connected to the broader Avalanche ecosystem. TACIT's recent migration of LINK provides a clear example of how that model can work in practice.

Asset is a financial technology company that provides blockchain-based payment and settlement infrastructure for regulated financial institutions. is its real-time settlement network designed to help institutional participants transfer value and complete transactions more efficiently. pass it moved link onto a dedicated Avalanche Layer 1, effectively giving the network its own customized blockchain environment. This allows TACIT to control how the network is configured, who validates transactions, and how data is managed, while still benefiting from Avalanche's speed and scalability. TACIT's broader infrastructure has processed more than $2.5 trillion in transactions, and we believe this migration demonstrates Avalanche's ability to support security institutionally oriented financial infrastructure at scale. Beyond institutional finance, Avalanche is demonstrating its ability to support large-scale consumer applications. During the 2026 FIFA World Cup, FIFA Collect, the organization's digital collectibles platform, operated on an Avalanche-powered blockchain. While the use case is distinct from payments and settlement, it provides another example of how of Avalanche supporting a globally recognized platform with a broad consumer audience. Avalanche is also continuing to improve the network's underlying infrastructure.

Helicon, a recent protocol upgrade, has been activated on the Fuji testnet, where new features are evaluated before potential deployment to Avalanche's live mainnet. Among other changes, Helicon introduces automatic renewal for valid validator staking and proposes reducing the minimum primary network staking period from two weeks to 48 hours. While these changes are not yet live on main net, we believe they could provide validators with greater flexibility and make participation more accessible to institutional operators. The combination of these deployments illustrates the breadth of activity emerging in the Avalanche ecosystem. institutional settlement, and tokenized assets to validate our participation in large-scale consumer applications. For AVAX 1, the continued expansion of the network reinforces our conviction in Avalanche's long-term potential and, in turn, the strategic rationale for maintaining and growing our AVAX Digital Asset Treasury. to our operations, AVAX One is organized around three core pillars, our avalanche digital asset treasury, Bitcoin mining, and the selective development of AI and high-performance computing opportunities. Our Avalanche treasury is central to the strategy. We currently own more than 14 million AVAX tokens and equivalents, including approximately 800,000 which have been deployed into Treehouse, providing us with meaningful exposure to the continued growth of the Avalanche ecosystem.

By staking a significant portion of these holdings directly through the network, we participate in network validation and earn protocol-native rewards, creating an ongoing source of revenue while increasing our AVAX holdings over time. Our second pillar is Bitcoin mining, which continues to provide recurring operating revenue across our facilities in Alberta and Ohio. Over the past year, we've expanded the platform through additional mining equipment, including 220 machines added to our Alberta operations, while continuing to operate our 5-megawatt Bald Eagle facility in Ohio, which is powered by flared natural gas. operations also provide valuable experience managing power generation, equipment deployment, and energy-intensive infrastructure. We will continue to manage each site with a focus on operating performance, energy efficiency, capital discipline, and the productive use of our existing assets. Our third pillar is AI and high performance computing. We believe our experience operating power intensive infrastructure, managing energy costs, and deploying modular equipment provides a practical foundation for this developing strategy. In Alberta, we are advancing a power-first deployment model centered on behind-the-meter natural gas generation, modular construction, and energy advantage sites. goal of delivering reliable compute capacity on a faster and more capital efficient basis than traditional grid dependent projects.

We will continue to evaluate infrastructure opportunities selectively with a focus on technical feasibility, customer demand, capital requirements, and the potential to generate durable recurring revenue. During the second quarter, we announced an initial AI inference pilot at our Redwater facility. involving the potential conversion of approximately 100 kilowatts of excess mining capacity to AI workloads. The pilot is designed to assess the technical requirements and potential economics of inference computing using infrastructure already within our operating footprint. Alberta remains an area of interest given our existing presence and familiarity with the regional power market, although we will pursue opportunities selectively based on economics, capital requirements, and strategic fit. In addition to executing across our three operating pillars, we were evaluating strategic opportunities that could strengthen and expand the platform. These opportunities may arise within our Avalanche Treasury and ecosystem strategy, Bitcoin mining operations, or AI and high-performance computing initiatives. focuses on accretive opportunities that can build durable revenue and cash flow while enhancing the productivity of existing assets. This includes potential acquisitions, partnerships, infrastructure investments, and operational initiatives that complement our capabilities and improve the long-term economics of the business.

We carefully evaluate each opportunity based on the quality of the underlying business or asset, its strategic fit, expected financial contribution, and capital requirements. Our Our objective is to pursue transactions, strategic relationships, and other opportunities that strengthen AVAX One's operating foundation and create sustainable long-term value for shareholders. looking ahead we are intently focused on building a stronger more durable operating platform we've We will continue to allocate capital selectively across our three pillars, pursue opportunities that can expand recurring revenue and cash flow, and remain active under our share repurchase program when we believe our shares trade below the intrinsic value of the business. We believe these initiatives, coupled with our prudent approach to capital allocation, will enable us to deliver long-term shareholder value. With that, I will now turn the call over to our Chief Financial Officer, Chris Polamini, to review our second quarter financial results.

Christopher Polimeni

Thank you, Pete. As a quick reminder, as we review our second quarter 2026 financial results, all All comparisons and variance commentary will refer to the prior year quarter, unless otherwise specified. Total revenue for our second quarter of 2026 was $2.8 million, which represents a significant increase compared to approximately $500,000 in the second quarter of 2025. Increase primarily reflects our transition to the Avalanche Digital Asset Treasury Strategy in Q4 of 25. Our revenue in the second quarter of 26 consisted of approximately $2.1 million in staking rewards revenue from our Digital Asset Treasury Strategy, as well as approximately $700,000 in revenue from our Bitcoin mining operations. Our total operating expenses for the second quarter of 2026 were $36.2 million compared to $1.8 million in the second quarter of 2025. The operating expenses for the second quarter of 26 included $33 million of non-cash charges related to, A, $29.8 million unrealized loss in the change in market value of our digital assets, B, a $2.6 million impairment of our treehouse liquid staking tokens, and C, a $2.6 million loss in the change in market value of our digital assets. and C, a $600,000 share-based compensation depreciation expense. excluding these non-cash charges, are adjusted operating expenses for the second quarter of 26, worth $3.2 million. We reported a net loss for the second quarter of 2026 of $35.1 million, or $4.41 per diluted share, compared to a net loss of $8.1 million, or $335.88 per diluted share in the second quarter of 2025.

Excluding the aforementioned non-cash expenses, adjusted net loss for the second quarter of 26 was $2.2 million, or $0.27 per diluted share. As of June 30th, 2026, our total liquidity was approximately $21.1 million, consisting of cash and cash equivalents of $11.4 million, restricted cash of $5.4 million, and an escrow receivable balance of $4.3 million. This compares to approximately $27.6 million in total liquidity as of December 31st. We believe our liquidity position, coupled with our ability to generate additional liquidity by leveraging or liquidating the digital assets earned through staking and Bitcoin mining, will provide the company with sufficient liquidity to fund our operating expenses as well as to execute our growth strategy without the need to raise additional capital. As of June 30th, 2026, the last day of our second quarter, AVAX1 held approximately 13.2 million AVAX tokens with a net value of 86.3 million, approximately 700,000 TAVAX tokens through our deployment with Treehouse with a net value of approximately 5.3 million, and approximately 31.2 million AVAX tokens. Bitcoin with a net value of approximately 1.8 million, resulting in a total net value of our digital assets of approximately $93.5 million. Since the inception of our digital asset treasury strategy in November of 25, we've generated approximately $4.7 million in staking revenue, with our staking activities producing an annualized yield of approximately 5.3%.

Subsequent to quarter end, as announced last week, we completed the restructuring of certain outstanding convertible debentures, reducing the related principal balance by approximately $6.8 million. The transactions included the full repayment and retirement of debentures held by two institutional investors and a reduction in the principal amount and amendment of certain terms of a debenture held by a third investor. Restructuring was funded through cash on hand and a reduction in the related escrow receivable. this action meaningful reduces near-term liabilities, strengthens our balance sheet, and enhances our financial flexibility as we execute against our three-pillar strategy. Looking ahead, we are focused on executing our three-pillar strategy while maintaining a prudent approach to capital allocation. We will continue to evaluate high quality opportunities across the Avalanche ecosystem, Bitcoin mining, and AI and high performance compute infrastructure with an emphasis on opportunities that can strengthen our operating performance, expand recurring revenue, and generate attractive risk-adjusted returns. We believe these initiatives will enable us to execute our growth and profitability initiatives. This concludes our prepared remarks, and we'll now open it up for questions from those participating in the call.

Operator

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from Derek Greenberg with Maxim Group.

Please go ahead.

Unknown Speaker

My first question is just on the CEO transition. I was wondering if you could talk a little bit about what you're looking for in a candidate, I guess what kind of experience and background they bring and what kind of qualities they.

Peter Wylie

Sure. We're not commenting publicly much more than we already have on the search itself. But I think our three pillars are quite clear, building the Avalanche Digital Asset Treasury and enhancing our Bitcoin mining operations and exploring AI infrastructure. So certainly candidates that have experience in and around those spaces are going to be the ones that we're evaluating, but won't make much progress.

Unknown Speaker

comment at this time. Got it. And then on the third pillar in particular, the AI data centers, I was wondering kind of where your focus lies. I know previously there was kind of a target of powered land at the Alberta location in 1Q27. I was wondering if that's still a firm plan or if you're kind of looking at everything more opportunistically now, if you could just talk about that.

Peter Wylie

Sure, we remain focused and exploring opportunities in Alberta through a partnership with Blue Flare primarily.

Unknown Speaker

Got it. On the redwater inference pilot, could you just talk about how that's progressing and what you're seeing and learning thus far?.

Peter Wylie

Sure, it remains on track, but we have yet to actually deploy the equipment. There was a long lead time to secure all needed assets to commence the pilot itself, so we're still on track. to launch it on schedule, but we have yet to actually get the operating results back from the pilot and look forward to updating the market when we do.

Unknown Speaker

Okay, got it. That's it for me for now. I'm going to hop into queue. Thanks, guys.

Operator

Thank you. Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. Please disconnect your lines and have a wonderful day.

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