Solana (HSDT) Swings to $105.2 Million Profit as SOL Rally Bites

Solana Technologies (NASDAQ:HSDT) posted net income of $105.2 million for the third quarter, against a net loss of $352.8 million a year earlier, as a $102.7 million unrealized gain on digital assets did most of the work. Revenue reached $3.4 million, up from $697,000 in the third quarter of 2025, with validator infrastructure (computers that process and secure blockchain transactions) now earning third-party staking fees for the first time.

What drove the revenue?

The company earned $3.3 million in staking revenue during the quarter ended September 30, up from $2.5 million in the second quarter of 2026. That figure includes rewards on its own treasury plus fees from third parties delegating SOL to its Pacific Backbone validator. Chairman and CEO Joseph Chee called the quarter a pivot for the infrastructure business from construction to operation.

"Third-party stake on Pacific Backbone is live and now contributing to our staking revenue," Chee said on the earnings call.

Pacific Backbone held roughly 1.3 million SOL in delegated stake at September 30, including 1 million SOL from third parties. Total delegated stake grew to about 1.5 million SOL as of November 3. Chee told analysts that third-party delegation, which began in late July while the infrastructure was still in beta, grew faster than expected. He cautioned the pace could slow in the fourth quarter as the company evaluates a new location and pursues certification.

Where does the expansion point?

Solana is assessing Hong Kong as its next validator location and targets ISO 27001 (the international information-security management standard) certification in the fourth quarter. Chee said Hong Kong's Office for Attracting Strategic Enterprises had selected the company as a strategic enterprise, with a headquarters expected in the city. The existing Tokyo cluster runs on three machines operating as a single validator. Beyond infrastructure, the company ran more than 40 institutional education sessions during the quarter and continues to develop an AI-powered orchestration and compliance platform.

How did margins and costs move?

Chief Financial Officer Madelene Gani reported gross profit of $2.7 million, a gross margin of approximately 82%. General and administrative expenses fell to $3.4 million from $11.1 million in the second quarter, which had included roughly $6.8 million in nonrecurring severance tied to the PoNS divestiture. Gani declined to give forward-looking expense guidance, saying costs could normalize between current and historical levels as the business grows.

Director Cosmo Jiang noted SOL rose approximately 60% during the quarter, from roughly $74 to roughly $118. For the first nine months of 2026, the company reported revenue of $9.5 million and a net loss of $24.9 million. The rally, in short, flattered a small operating base.

What about the treasury and capital moves?

Treasury holdings generated an average net staking yield of 5.9% annualized in the quarter, versus a network average of about 4.9%, Jiang said. He attributed the outperformance to validator selection, rebalancing, and active capture of maximal extractable value, or MEV (extra fees extractable by reordering blockchain transactions). Roughly 5.1 percentage points came from inflationary rewards, about 50 basis points from block rewards and about 20 basis points from MEV. Jiang expects some advantage to persist, though the gap may fluctuate.

The capital allocation was busy in both directions:

• Repurchased 1.4 million shares for approximately $2.8 million, an average of $1.96 per share.
• Priced an offering of about 4.37 million shares at $3.433 per share on September 30, a 5% premium to net asset value per share; it closed October 1 with warrants attached.
• Net proceeds of roughly $14.3 million funded the purchase of about 125,000 SOL.
• Repurchased a further 1.96 million shares for $4.4 million after quarter-end.

As of September 30, Solana held approximately 2.4 million SOL across holdings, staked positions and receivables, with a fair value of about $288 million. It also reported a $15 million payable for unsettled SOL purchases. A quarter this dependent on token appreciation invites patience before celebration.