This article first appeared on GuruFocus .
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Total Revenue:$7.8 million for Q2 2026, compared to $11.2 million in the prior period.
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Average AUM:Approximately $471.5 million for the quarter.
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Quarter-End AUM:Approximately $397.2 million.
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Net Inflows (Valour):$22.8 million in net inflows during the quarter.
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Effective Management Fee Yield:Approximately 1%, consistent with the prior period.
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Effective Staking Yield (Valour):2.4% during the quarter.
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Cash and Cash Equivalents:$60.3 million at quarter end.
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Total Liquidity:$119.8 million, including cash, preferred shares, stablecoins, and digital asset treasury holdings.
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Operating Expenses (G&A and Fees/Commissions):$8.0 million in Q2 2026, a $1.6 million reduction from $9.6 million in Q1 2026.
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Mark-to-Market Adjustments:Negative $16.3 million impact on bottom line, primarily from venture portfolio and Stretch preferred shares.
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Stillman Digital Revenue (H1 2026):Approximately $5.4 million, representing 30.2% year-over-year growth.
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ETP and Structured Products:102 products at quarter end.
Release Date: August 14, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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DeFi Technologies Inc ( NASDAQ:DEFT ) generated $22.8 million in net inflows during Q2 2026, demonstrating continued product demand despite challenging market conditions.
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The company maintains a strong balance sheet with $119.8 million in total liquidity, including $60.3 million in cash, providing flexibility to invest through the market cycle.
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Stillman Digital, a key business segment, achieved 30.2% year-over-year revenue growth in H1 2026, with revenue not dependent on cryptocurrency price increases.
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The launch of the first hedge fund is imminent, with all obstacles removed and expected within one to three weeks, potentially diversifying revenue streams.
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Operating expenses were reduced by $1.6 million quarter-over-quarter, with a targeted annualized cash operating cost structure of $36 million to $39 million, showing disciplined cost management.
Negative Points
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Total revenues declined to $7.8 million in Q2 2026 from $11.2 million in the prior period, impacted by lower average AUM and unfavorable mark-to-market adjustments.
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Assets under management fell to $397.2 million at quarter end from $471.5 million average, driven by lower digital asset prices.
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The company recorded a $16.3 million negative mark-to-market adjustment on its venture portfolio, primarily due to a markdown of its investment in AMINA Bank.
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The Swedish FSA did not approve the initial UCITS structure, delaying the expansion of institutional products and potentially pushing the launch to later in the year.
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Effective management fee yield remained at 1% and staking yield moderated to 2.4%, reflecting a higher weighting of Bitcoin-related products and weak altcoin markets.
Q & A Highlights
Q: When can we expect the smart crypto fund and hedge fund products, and how is the UCITS listing coming along? A: Johan Wattenstrom (CEO) stated that the smart crypto fund has cleared all formal obstacles, including onboarding with key trading partners, and is in the final practical stages, with a launch expected within a week to three weeks, definitely within Q3. Regarding UCITS, the Swedish FSA rejected the initial application without providing a reason, which the company has appealed. Simultaneously, they are making significant progress on establishing a UCITS platform in Luxembourg, which is more neutral regarding asset classes. If the Swedish appeal fails, the Luxembourg structure may take a few more months, with a goal of launching within the year.
Q: Should the company utilize capital to close out the current buyback given the share price is at an 80% discount to the capital raise price? A: Johan Wattenstrom (CEO) explained that the primary objective is to use cash to grow operations and pursue strategic deals that would have a higher impact on the stock price than buybacks. He noted that in a falling market, buybacks would not have a lasting impact, and the focus remains on growing AUM, launching new products, and completing structural deals. Curtis Schlaufman (VP of Marketing) added that buyback shares are retired, making the capital illiquid, which is less advantageous during a bear market when free cash flow is limited.
Q: What is the company's biggest driver of AUM outside of increased crypto prices, given slowed geographic expansion and stalled institutional products in Europe? A: Johan Wattenstrom (CEO) highlighted the upcoming launch of new institutional products, including the crypto fund and UCITS funds, which address a different, global market with high demand and limited competition. He also mentioned plans to list several innovative new ETP products within the next few months that are unique and have no direct competition, which are expected to drive AUM growth once launched.
Q: Can you clarify the use of capital to purchase the Stretch preferred shares and RWUSD? A: Paul Bozoki (CFO) explained that the company's cash is held in short-term US Treasury bills yielding about 3.5%. To achieve a higher yield, the Board approved a $20 million investment in MicroStrategy Stretch preferred shares (STRCs) at $99.50, which yield 12% ($1 per month per share). These shares were marked down to $85 at quarter-end but have since recovered to approximately $95. The company views these as higher-yielding components of its treasury and has no intention to sell in the near term.
Q: Were the Q2 net inflows driven by any specific product or geography, and what is driving the continued momentum? A: Paul Bozoki (CFO) noted that an $11 million inflow into HBAR (Hedera) was a significant part, but the growth generally reflects the AUM composition, which is 46% Bitcoin and Ethereum and 69.8% in the top three tokens. Andrew Forson (President) added that the inflows were broad-based, driven by extensive outreach to broker-dealer platforms and institutional investors, strong marketing campaigns in the Nordics, and a granular system for tracking product flows to maximize efficiency in attracting capital.
Q: Is the company seeing potential M&A deals and sellers in the current bear market? A: Johan Wattenstrom (CEO) confirmed that the company sees a continuous and intense pipeline of potential M&A deals, with increased activity over the last six months. While they have conducted deep due diligence on some deals that were very close, they remain extremely selective and will only proceed with a perfect fit for their long-term strategy. The M&A space is currently very active with many interesting opportunities.
Q: What is the current breakeven level for the company given the lower expense structure and AUM at quarter-end? A: Paul Bozoki (CFO) stated that the goal is to keep cash operating costs (G&A and fees/commissions) in the $36 million to $39 million range. To be breakeven at that level, the company needs approximately $550 million of AUM at a 4.25% monetization rate, which is considered a reasonable rate in a slightly stronger crypto market. The company will continue to monitor and reevaluate depending on the duration of the bear market.
Q: Can you confirm the percentage of Q2 inflows attributed to institutional outreach, and what does a geographically less restricted product look like? A: Andrew Forson (President) confirmed that approximately 40% of Q2 inflows were directly attributed to institutional deals from face-to-face meetings and events. He explained that new fund products, such as those discussed by the CEO, have attracted interest from wealth management platforms and institutional allocators outside of Europe due to their attractive investment philosophy and risk-adjusted returns (Sharpe and Sortino ratios), making them accessible to a broader global investor base.
Q: Is it reasonable that the company could run at a lower cash operating expense rate than the $36 million to $39 million target? A: Paul Bozoki (CFO) acknowledged that Q2 G&A plus fees and commissions were just under $8 million, which annualizes to about $32 million, lower than the target range. He noted that Q1 was slightly higher and that the company is aiming to come in at the lower end of the range, emphasizing a strategy of underpromising and overdelivering while running leaner.
Q: Should the market use a lower yield assumption than 4.5% for calculating breakeven AUM, given the issues with yield this quarter? A: Paul Bozoki (CFO) explained that the company achieved a 5% actual yield in 2025, but it fell to 3.6% in Q1 and 3.3% in Q2 due to distressed market conditions. The company is internally budgeting at 4.25% for the fall, hoping for a recovery in the four-year cycle. Johan Wattenstrom (CEO) added that the lower average monetization rate is driven by higher Bitcoin dominance in bear markets, which reduces the proportion of higher-yielding altcoin assets, a dynamic that reverses when markets recover.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
