SharpLink reported a big jump in Q1 revenue to $12.1 million from $0.7 million a year ago, driven largely by its Ethereum staking and treasury strategy, including a $200 million deployment onto Linea Layer 2.
The company also posted a massive net loss of $685.6 million, mainly because of a $506.7 million unrealized loss tied to ETH market conditions and a $191.7 million impairment charge under U.S. GAAP accounting rules.
Management said SharpLink’s core focus is to grow ETH per share through active treasury management, with nearly all ETH staked and a new proposed yield fund with Galaxy Digital aimed at generating additional on-chain returns while preserving ETH exposure.
Sharplink Gaming (NASDAQ:SBET) reported a sharp increase in first-quarter revenue as management emphasized its Ethereum treasury strategy, while the company also posted a large net loss tied to accounting treatment and weaker Ether market conditions during the quarter.
On the company’s earnings call for the quarter ended March 31, 2026, executives framed SharpLink’s business around accumulating and actively managing ETH, with Chief Executive Officer Joseph Chalom saying the company is building “an institutional-grade ETH treasury platform” designed to compound ETH per share over time.
“Our strategy is simple: accumulate ETH accretively, make it productive, and scale that advantage over time,” Chalom said.
Revenue rises on ETH staking strategy
Chief Financial Officer Robert DeLucia said revenue for the first quarter was $12.1 million, up from $0.7 million in the prior-year quarter. He attributed the increase primarily to the company’s ETH staking strategy, including a $200 million deployment onto Linea Layer 2.
As of March 31, SharpLink held 589,305 native ETH with a fair value of $1.2 billion. The company also held 189,327 LSETH, or liquid staked ETH, and 66,102 WEETH, or wrapped Ether token, with a combined net cost value of $487 million. Subsequent to quarter-end, DeLucia said combined holdings increased to 590,824 native ETH, 209,788 as-if-converted LSETH and 72,372 as-if-converted WEETH, totaling 872,984 ETH as of May 4, 2026.
The company reported a net realized gain of $12 million for the quarter, related to the redemption of LSETH into ETH and the conversion of ETH into WEETH. However, it also recorded a $506.7 million unrealized loss due to ETH market conditions during the quarter.
SharpLink’s net loss for the quarter was $685.6 million, compared with a net loss of $1 million in the prior-year period. DeLucia said the loss was driven by a $191.7 million impairment charge related to the lowest intraday pricing of LSETH and WEETH during the quarter, in addition to the unrealized loss and realized gain.
“These impairment charges and unrealized losses reflect the current market pricing dynamics and follow the current U.S. GAAP accounting standards,” DeLucia said. “They do not represent a realized economic loss on our ETH position, nor do they reduce the number of ETH units we hold.”
SG&A expenses rose to $9.9 million from $1.1 million a year earlier, which DeLucia said reflected costs tied to implementing and executing the ETH treasury strategy that began in mid-2025. Cash on hand was $16.9 million at the end of the quarter, down from $28.5 million at Dec. 31, 2025.
Management emphasizes Ethereum adoption trends
Chairman Joe Lubin, who is also a co-founder of Ethereum and founder and CEO of ConsenSys, used the call to discuss Ethereum’s long-term role in financial infrastructure. He described Ether as “a productive, programmable financial primitive” that secures the network and supports applications including stablecoins, tokenized assets and decentralized finance.
Lubin said Ethereum has continued to scale through base-layer upgrades and Layer 2 improvements, citing the Pectra and Fusaka hard forks shipped since May 2025. He said the next major upgrade, Glamsterdam, is targeted for the first half of 2026 and is designed to improve block processing and support higher Layer 1 throughput in the future.
Lubin also addressed concerns around quantum computing, saying Ethereum has been researching quantum-resistant cryptography for years and is designed with “cryptographic agility,” allowing its security architecture to evolve as new standards emerge.
Chalom said the broader crypto market has been working through a deleveraging cycle that began last fall, affecting Ether prices, SharpLink’s share price and sentiment toward digital asset treasury companies. He said he believes the market has largely moved past those impacts in recent months.
Chalom pointed to four areas of growth for Ethereum: stablecoins, tokenization, institutional DeFi and agentic finance. He said stablecoin supply now exceeds $320 billion, with annual transaction volumes in the tens of trillions of dollars, and said Ethereum hosts more than half of circulating stablecoin supply. He also said Ethereum represents roughly 52% of the tokenized real-world asset market by on-chain value.
SharpLink details active treasury approach
Chalom said SharpLink’s “North Star” remains growing ETH per share, with risk management central to the company’s approach. He said SharpLink has staked nearly all of its ETH from the beginning of its treasury strategy, and that the company has brought most treasury management activities in-house as its internal capabilities expanded.
The company also announced a non-binding memorandum of understanding for a fund partnership with Galaxy Digital. Chalom said the Galaxy SharpLink Onchain Yield Fund is expected to deploy roughly $125 million and will be managed by Galaxy Digital. SharpLink is contributing roughly 80% of the capital alongside Galaxy as a limited partner.
The fund is intended to generate yield by providing liquidity to on-chain protocols, while allowing SharpLink to retain ETH exposure and continue earning the Ethereum staking rate through liquid staking tokens. Chalom said success will be measured by the incremental ETH SharpLink can buy with proceeds above what it would have earned through staking alone.
“We will not sacrifice quality for yield,” Chalom said, adding that future productivity opportunities could include additional fund partnerships and on-chain vault strategies.
Analysts ask about yield, Layer 2s and DeFi risk
During the question-and-answer session, Alliance Global Partners analyst Brian Kinstlinger asked about the benefits of launching the on-chain yield fund with Galaxy rather than SharpLink committing ETH directly into projects. Chalom said Galaxy provides access to more early-stage opportunities, institutional diligence and risk management, and said the fund could be the first of additional funds with Galaxy or other managers.
Asked about potential yields, Chalom said it was too soon to provide a figure, but said the company is seeking returns above the standard Ethereum staking rate and is focused on “singles and doubles” rather than venture-style returns.
TD Securities analyst Lance Vitanza asked what management sees as the most underappreciated driver of Ethereum demand over the next 12 to 24 months. Chalom cited stablecoins as the most proven use case, tokenization as an area where he expects “step function change,” DeFi as future financial rails and agentic finance as a longer-term wildcard.
In response to a question from Canaccord Genuity’s Will Johnson about recent DeFi exploits, Chalom said SharpLink’s assets were not affected. He said recent incidents largely involved off-chain issues and centralized points of failure rather than smart contract exploits. He added that SharpLink has turned away many protocols after diligence and will continue prioritizing risk controls over yield.
Chalom closed the call by saying SharpLink is focused on building a platform that can operate across market cycles and compound value over time through disciplined execution and ETH productivity.
About Sharplink Gaming (NASDAQ:SBET)
SharpLink Gaming, Inc operates as an online technology company that connects sports fans, leagues, and sports websites to sports betting and iGaming content. The company operates through four segments: Affiliate Marketing Services United States, Affiliate Marketing Services International, Sports Gaming Client Services, and SportsHub Games Network. It operates a performance marketing platform, which owns and operates state-specific web domains to attract, acquire, and drive local sports betting and casino traffic directly to the company’s sportsbook and casino partners, which are licensed to operate in each respective state; and offers sports betting data to sports media publishers.
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