How the company's business model works
Solana Company (NASDAQ: HSDT) is a public company managing cryptocurrency reserves Solana (SOL). It should not be confused with the Solana blockchain. Solana Company's business model combines reserve management, validator services, and institutional consulting. Digital asset management includes accumulating SOL, staking, and liquidity control.
Staking Solana allows SOL holders to earn rewards for securing the network. Holders delegate tokens to validators who process transactions. Solana validators' yield depends on network rewards, fees, and infrastructure costs. For the company, the SOL per share metric is important: additional stock issues can dilute the shares of existing shareholders.
What the third quarter of 2026 showed
Solana Company's financial results for July–September show revenue growth with profit dependent on SOL revaluation. According to the unaudited report, revenue increased from $2.526 million to $3.36 million, or 33% for the quarter. Its structure remained almost unchanged: staking accounted for more than 99% of receipts.
Indicator | Q2 2026 | Q3 2026 |
|---|---|---|
Revenue | $2.526 million | $3.360 million |
Staking Income | $2.512 million | $3.337 million |
Gross Profit | $2.449 million | $2.743 million |
Administrative Expenses | $11.116 million | $3.386 million |
Net Profit / Loss | −$30.256 million | +$105.162 million |
Source: official press releases of Solana Company with unaudited financial results for the Q2 and Q3 2026
The quarterly report shows that the growth in dollar revenue was accompanied by a decrease in the number of SOL earned from 31.2 thousand to 30.8 thousand. The company attributes the revenue increase in part to the launch of third-party delegations through Pacific Backbone. Their separate contribution to revenue is not disclosed.
Administrative expenses decreased from $11.1 million to $3.386 million, but in Q2 they included $6.8 million in payouts from the sale of the former PoNS business. Therefore, the reduction in expenses should not be entirely attributed to increased efficiency. Gross margin decreased from approximately 97% to 82%.
How staking helps grow reserves
As of September 30, the company accounted for about 2.4 million SOL in various asset categories and related claims with a total fair value of $288.2 million. Part of this amount was attributed to restricted tokens and claims, not freely available reserves.
According to Solana Company, the staking yield on its own SOL reserves in Q3 averaged 5.9% annualized (APY) compared to approximately 4.9% for the network. This is the result of the reporting period, not a guaranteed rate. For the quarter, staking rewards amounted to 30,800 SOL. The received tokens were automatically restaked, increasing the base for future accruals.
As of the end of September, Pacific Backbone was managing approximately 1.3 million SOL in delegations, including 1 million SOL from third-party participants. These tokens do not belong to the company. CEO and Chairman Joseph Chee stated in the Solana Company report dated November 11: "Our Pacific Backbone infrastructure has begun operations, and institutional participants have entrusted us with staking a million SOL…"
How Revenues Differ from Financial Stability
Regular operational income from staking should be distinguished from accounting profit due to the revaluation of crypto assets. Net profit for the third quarter reached $105.2 million, but $102.7 million was due to unrealized positive revaluation of digital assets and claims, which is not equivalent to cash inflow.
Gross profit of $2.743 million did not cover administrative expenses of $3.386 million. Current assets as of September 30 amounted to $38.65 million: $1.13 million in cash, $21 million in digital assets, $14.79 million in broker claims, and other positions. Short-term liabilities reached $16.62 million, including $15 million in settlements with the broker for SOL purchases completed on October 1. To assess stability, liquidity should be considered, not just profit.
What Will Change if SOL Falls
Cryptocurrency volatility increases the risks of crypto investments when reserves are concentrated in a single token. If we hypothetically apply a 10% or 20% decrease in SOL price to the entire $288.2 million exposure, the estimated value would decrease by $28.8 million or $57.6 million. These are scenarios without considering operations and other factors, not a forecast of accounting results.
Even with the same number of accrued tokens, a decrease in the exchange rate reduces the value of SOL received as rewards. Additional pressure on the strategy is created by the state of the crypto market. UNUM wrote about the impact of liquidity and capital movement in the analysis of Bitcoin's decline.
The company also depends on raising capital. On September 30, it agreed to place shares worth $15 million before expenses. Expected net proceeds were $14.3 million, with closure planned for October 1. The placement was accompanied by warrants—rights to purchase additional shares, which can dilute shareholders' equity.
How the Company Can Grow Further
Unlike earning rewards solely from staking its own SOL, servicing third-party delegations can generate commissions without increasing reserves. By November 3, the volume of delegations at Pacific Backbone, according to management, reached about 1.5 million SOL. Scaling depends on demand, competition, and infrastructure costs.
UNUM considered a similar diversification task in the article about Coinbase. When comparing Solana staking and Ethereum (ETH), one should consider not only profitability but also fees, costs, and validator reliability.
Four indicators can help assess the company's prospects:
SOL per share considering placements and buybacks.
Staking yield and third-party delegations as revenue sources.
Gross profit and expenses without revaluation effects.
Liquidity and liabilities affecting the need for new capital.
Staking has become the foundation of Solana Company's revenue and helps increase SOL reserves, but it does not guarantee Solana Company's financial stability in dollar terms. Its prospects depend on the growth of commission services, expense control, and liquidity. Key criteria remain regular results and SOL per share, not one-time profit from asset revaluation.