Good morning and welcome to Hyperliquid Strategies Earnings Conference Call for the quarter ending September 30. I'm Rob Diamond, Director of Corporate Affairs for Hyperliquid Strategies Inc. Participating in today's call are David Schamis, Chief Executive Officer, Brett Beldner, Chief Financial Officer, and Jeroen Nieuwkoop, Chief Operating Officer. After the presentation, there will be an opportunity for questions and answers from the audience. Before we begin, please note that the comments during today's call and the accompanying presentation contain forward-looking information. All statements other than statements of historical facts are considered forward-looking statements. All forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from the results discussed in the forward-looking statements. Some of these risks and uncertainties are identified and discussed in the company's filings with the SEC. In addition, information in this call and the presentation regarding hyperliquid and its operations is based on information that has been publicly disseminated by hyperliquid and has not been independently verified by the company. We ask that you take a moment to read the disclaimers at the beginning of the slides that accompany this presentation as they contain important information.

Great. Thank you, Rob. Let's go to page five now. It's been another exciting time in the hyperliquid ecosystem and another exciting quarter at Hyperliquid Strategies. We're up to 38.9 million tokens and we have about 245 million of cash on a balance sheet. Since inception, we've raised about 1.6 billion of equity publicly. And along with our partner, Unit Trade XYZ, we are now the largest non-foundation validator in the hyperliquid blockchain. Impressively, we are now the third largest DAT in the world, behind only Strategy and Bitmire. I'll cover this a bit more as we go forward here, but Hype is also now the sixth largest market cap of any crypto token. If you go to the next page, it's amazing to think that it's only been three years since Hyperliquid was launched on Mainnet. It's been only a bit over a year since HIP3 has gone live, allowing RWAs to trade in PERP form on hyperliquid. It didn't take long for the world to take notice of how important of an event that really was. In July of this year, real world assets represented 51% of volume on hyperliquid. I'm still a fig guy and a bank guy at heart. A few days ago, I met with a very well-known and highly respected hedge fund manager. His question for me was, how do we trade on hyperliquid? It's really great to see hyperliquid, what it does, and the opportunities it affords investors permeating to the TradFi world in a big way. You go to the next page. On page seven, so many of these numbers are well known to the community, so I'm not going to go through every one, but I do want to call out a few. Hyperliquid is the number one perp DEX in volume and the number one perp DEX in open interest, with over five trillion of volume since inception. The other somewhat unreported number, or I maybe say underreported number, is the number of monthly unique wallets on Hyperliquid. It's up to 330,000. While on one hand, this is super impressive to see the growth, and as I say, I think relative to other numbers everyone focuses on on Hyperliquid, this one's been a bit underreported. It still pales in comparison to other venues like Binance, Coinbase, and Robinhood. And it shows you how much room there is still to grow and how massive the addressable market is for what Hyperliquid is looking to do. And that's in a lot of ways what has us excited and keeps us excited about Hyperliquid. In the end, what's the most important thing? And I'd point you to the number in the middle of the circle on the chart on the right. It's how much cash you generate. Hyperliquid has generated $834 million of value in the 12 months ended September 30th. So many different projects and so many different stories in the crypto world have had high hopes and very little actual cash generation. This number is a staggering number relative to almost anything we've seen in crypto. And it's happening every day with the vast majority of that value being returned to the hyperliquid token holders every single day. If you go to page eight, Again, the point I made a second ago, that value gets returned to the token holders. While on one hand, this is probably not new to anybody who's been following hype. On the other hand, we think it's super important to point this out on every call because it's such a fundamental thing of the hype story. Since inception, $1.4 billion has been used to buy back tokens. 48.3 million tokens have been bought back and taken out of circulation. That's 99% of the cash flow today, of the fees today that go to these buybacks. Everyone knows this, but I can't help but repeat it. There was no private equity. There was no venture. There were no other owners that this revenue and this cash flow gets shared up with. 99% goes to the token holders. The other thing that's been well covered, but I can't help but bring it up, is the recent transaction, the recent deal that was made with USDC, where now 90% of the revenue generated by the USDC on the hyperliquid platform effectively goes back to that buyback and goes back to the hype holders. I think that was something... Everyone in the hyperliquid community was very excited to see, and it really shows the power of what has been built on hyperliquid in a real meaningful way. It was a plateau step up in cash flow to be expected on an ongoing basis on hyperliquid. If you go to page nine, I mentioned this before, but on the chart on the right, hyperliquid is now the sixth largest token in terms of what we consider to be market cap. I want to make two comments about this page. One, the chart on the right is ranked by what we call outstanding token supply or OTS. We have an explanation for this on our website, but we think this is the most relevant way to look at the hype token. We include the entire circulating supply. And then we also include the still locked tokens that are owned by the team. Anyone who's heard me talk about this in investor meetings, I always point out that I don't think Jeff Yan is taking a job anywhere else anytime soon. So we think it is fair to include those locked tokens in this calculation. And when we do that on an apples to apples basis, That's where we get our number six ranking with the chart on the right shows. I think if we did it with strictly uncirculated supply, we'd be number seven rather than number six, so it's not a major change, but we think this is the right way to think about it. The chart on the left we find interesting. These to us are the five major events that happen in hyperliquid that really move the market over the period. and David Beldner. If we go to the next page on page 10, this is something that's been well covered, but we have to focus on this because it's super important to us, the United States. I want to make a few general points about this. It has been clear that hyperliquid has been coming to the US and it's great to see that clearly happening officially right now. It's also great to see that hyperliquid has been welcomed to the US by the regulators. We find in our interactions with these regulators, both publicly and privately, we are just very impressed with their what I'd call eagerness for innovation in the U.S. capital markets. We've heard this for a number of them over the years or over the months, but The regulators, I think, genuinely want to see this innovation happening in the United States, not in other places. And I think we couldn't be more happy to see that. The other thing that's super important to talk about here is the announced transaction between TradeXYZ and NYSE. We think that is a monumental event in the hyperliquid world. The New York Stock Exchange is one of the oldest and most respected financial institutions in the world and seeing them partnering with one of the most pioneering companies in the exchange world is great to see. I think six months ago, we were all so impressed that TradeXYZ was able to make a deal with the S&P to list S&P 500 index perps by name. Little did we know that only a few months later, we'd be seeing a transaction announced with the New York Stock Exchange. Again, this goes to the points I made on the earlier page, but it is just very impressive and quite amazing to see the pace of progress on hyperliquid that we've seen in 2026. When you look at that on the chart on the right, none of these numbers are probably new to anybody, but we think it's worth pointing out just the size of the opportunity versus what we've been talking about here. All of crypto in total is something like a $3 trillion market cap. On one hand, that's great. On the other hand, as I point out all the time, that's smaller than the market cap of NVIDIA. Global equities market cap is 158 trillion. We don't include all other asset classes that could be one day listed and traded on hyperliquid. The numbers are absolutely huge. And this page on the chart on the right really just points out how much room there is left to go. The next page, lastly, and maybe most importantly from our point of view today, we're actually making some news today. We are announcing that we are in the process of applying to form our own FCM. It's a funny thing. Anything we do and anything most people do in the hyperliquid ecosystem, two seconds after you do it, people are talking about it on Twitter. Here, it's actually been public. David Ira Schamis, Jeroen Nieuwkoop, Brett Beldner Our strategy is to be a fully aligned, neutral FCM for hyperliquid customers in the US. When I say aligned, what I'm referring to is our very large treasury tokens. In the end, what we care about most and what we will always care about most is the value of our tokens. We think this makes us uniquely qualified to play the role of the neutral bridge to various DCM, DCOs that we'll be building on hyperliquid in the US in the near term. For the avoidance of doubt, we have no plans on creating our own markets or to be a DCM, DCO ourselves. And we think this is what makes us so uniquely neutral versus anyone else that might be doing an FCM. We're knee deep in the process right now. We are working constructively with the NFA and the CFTC and we'll keep everyone posted as far as timing goes. Needless to say, we are very excited about this. From our point of view, if we're able to do this in a way that adds value to the ecosystem and create value for the tokens, we think that would be great. And we think that's great for everybody. On the other hand, if we spend some time and money on this, and in the end, not... The most successful FCM, someone else maybe does it better. Maybe we even spur some competition for someone to do a better job. That actually is great for us too, because in the end, the value of our tokens is the most important thing. And what's most important for the future US operations of this is for US customers to have the best experience they possibly can. If we're able to provide that, that's fabulous. And I'm sure those will benefit from that. If we spur some competition, as I said, and someone else does a better job of providing that, that's great too, because the vast majority of our value is in the tokens that we own. From our point of view, it's truly a heads we win, tails we win situation. And that's why we're so excited about it. With that, I want to hand over for the next section on page 13 to Jeroen Nieuwkoop, who we know as Jerry, our COO, to cover the next few pages. Thanks, David.

Let's turn to slide 13. Thank you. We continued adding to our hype treasury this quarter in a meaningful way. We ended the quarter holding about 38.5 million hype tokens, which is more than triple the amount that we started with when we launched the company in December of last year. On the capital raising side, we raised about 911 million in capital net of fees, issuing 74.6 million per shares at an average net price of $12.20. We issued our shares in an MNAV of about 1.15 times, which is in line with our treasury framework and which resulted in the accretion of NAV per share for our shareholders. The capital that we raised was put to work in two ways. First, most of it, $185 million went into buying hype tokens. We acquired 9.1 million tokens at an average price of $86.44. Secondly, when our shares traded materially below NAV, we used our capital to buy back stock. We spent about $17 million to buy back about 2.7 million shares at an average price of $6.36. Again, in line with what we're supposed to do according to our treasury framework and in a manner that was accretive to our NAV per share. We closed the quarter with 255 million in cash and cash-like instruments and zero debt. This is up from about 150 million in cash and cash-like instruments that we reported at the end of last quarter, ending June, 2026. On the next slide, we show what this did to our net asset value. We began the quarter at 1.9 billion and we finished the quarter at 3.4 billion, an increase of about 82%. The bridge on the left breaks that into four different pieces. First capital, as we discussed in the previous slide, we raised 911 million and we deployed 802 million for a net increase of about 105 million. Second, our HYPE treasury itself, which increased by 1.6 billion. Part of that is the HYPE tokens we bought and received in staking rewards. We went from 29.3 million to about 38.5 million, and the rest is an increase in the value of the HYPE tokens that we hold. The HYPE token price increased from $65 at the end of June to about 91 at the end of September. Third, the change in our deferred tax liability, which rose by about 172 million, this being the tax effect of the gain on our HYPE treasury. As you all know, these taxes only become payable when you actually sell HYPE tokens. Other items, majorly including expenses, moved NAV by about 8 million. On the next slide, we want to go into our share price performance and where we rank against other treasury businesses. On the left, our share price traced high breakout performance throughout the first nine months of the year. At the end of the quarter, our share price was up about 215% compared to the end of December when we started trading on NASDAQ, significantly outperforming the majority of other digital asset treasury companies. and on the right is where that leaves us we are by far the largest high treasury company and with our treasury worth about three and a half billion we have moved up the ranks and become the third ranked DAT among all DATs globally behind strategy at Bitmine and with that I'll turn it over to Brett Beldner our CFO to discuss our financial performance for the quarter in more detail thanks Jeroen and thank you everyone for joining our call

Q1 of 2027 was another strong quarter for the company. Our treasury strategy yielded approximately $816 million, comprised primarily of unrealized gains of $803 million on our hype holdings and $12.3 million of staking and validator commission revenue. The unrealized gains resulted from both the price appreciation of one, hype from $65.04 at June 30th to $90.99 at September 30th. And secondly, the execution of our treasury strategy, purchasing approximately 9 million hype tokens at average prices below the month end rate. Operating expenses ticked up to $7.6 million for the quarter, the increase primarily driven by higher equity compensation costs of approximately $1 million, increased executive incentive compensation of approximately $1 million, and business development costs related to the FCM of around $800,000. Other expenses of $15.3 million were recognized relating to the change in fair value of our share price between the date of issuance and the date of settlement for any equity issued under our equity facility in accordance with GAAP. The result is a net income before taxes of approximately $793 million. After recognizing approximately $172 million of a provision for income taxes, primarily related to the tax effect of the difference between our tax basis and our hype tokens and the fair value of the hype tokens at the end of the quarter, we recognize approximately $621 million of net income. We also present our P&L for the last four quarters, which represents the 10 months of performance since we closed our deal last December, which shows $1.38 billion related to our Treasury strategy and income, resulting again from both the hype appreciation and the execution of our Treasury strategy. and a net income of approximately $939.5 million after taking into account expenses, including those related to the transaction. On the next stage, from a balance sheet perspective, the story is very similar to last quarter, just at a much larger scale. There are four main components to our balance sheet. Cash, which increased from 152 million a year and to approximately 255 million at the end of the quarter, coming from proceeds that we raised from our equity facility. and our Hype Digital Assets, which increased from approximately $1.9 billion to approximately $3.5 billion over the same period. The 3.5 billion represents approximately 38.5 million tokens up from 29.3 at year end at a price of $90.99. The result is a total asset balance of approximately $3.76 billion. On the other side of the balance sheet, there are two material items. Our deferred tax liability, which as described before, represents the tax effect of the difference between the fair value of our cost basis of the hype tokens, but it's only an obligation if we sell the tokens. Our equity rose from approximately 1.87 billion to 3.4 billion, resulting from both an increase from our net income for the period of 620 million and also from the issuance of around $900 million in equity in executing our treasury strategy. And with that, I'll turn it back to David for some closing remarks before we open this up for questions.

Thanks, Brett. It goes without saying, we think this was another good quarter. It also goes without saying we continue to be extremely excited about the future for hyperliquid and the future for hyperliquid strategies. The FCM is the obvious, most newsworthy thing from this call. We're excited about this and we're excited to facilitate the entrance of hyperliquid to the United States, hopefully in the not so distant future. With that, we'll be happy to take questions.

When it is your turn, you will receive a message on your screen from the host allowing you to talk, and then you will hear your name called. Please accept, unmute your audio, and ask your question. We will wait one moment to allow the queue to form. Our first question will come from Gareth Cassetta with Kantor. Please unmute your line and go ahead.

Hey guys, thanks for taking the question and congrats on the results. I want to touch on the FCM. Obviously, it's super exciting to see this release. Maybe can you walk us through the logistics of the approval process and maybe how we get from nothing today to kind of a live product and market? And on top of that, I'm wondering if you have any insight into if we should expect the HIP3 star markets to have a similar economic profile to the traditional HIP3 markets related to like how much stake you need to become a deployer and the revenue share with the protocol.

Brett, let me start. By the way, thanks for joining us, Jeff, and thanks for the question. Let me start with the second part of your question. We are not totally sure exactly how those terms are going to work as far as how much stake. I think that's... I don't think that's publicly known yet, and I'm certain we don't know it either. So I think this stuff is being figured out. I think it's going to be figured out soon because this is obviously happening live, and I think there's an urgency to do it. I'm going to let Jerry answer the questions around logistics and timing around the FCM. Hi, Garrett. Yeah, thank you.

On the timetable and what we're doing on the application front, I think it's still pretty early stage and we are working with the NFA through the application process and that's going really well. And in terms of when we think this will go live, that's a little bit difficult to predict. Generally speaking, we're hopeful that this is sort of in a maybe three, four, five, six-month timeframe, but we'll certainly keep you updated. There's definitely things that we need to work through. It's the regulated stack plus hyperliquid as an underlying technology. is a new structure and we just have to work through it. There's a lot of excitement and commitment around making this happen, but obviously we need to work through the details with the working teams and we're diligently doing that and we'll make sure to keep everyone updated as we go along.

That's super helpful. Thank you. And then I know you guys gave some color on the SG&A step up, Q over Q. but I'm wondering if you could just provide any color on how you think that may play out on a run rate basis and more specifically, if you think or may anticipate any additional expenses as you kind of build out this HIP three star product going forward or if kind of the 800K you guys mentioned was more of a one-time expense. Thank you.

You're welcome. So there's a couple pieces to that. So I would say our base business of running the treasury strategy is on a non-excluding equity related compensation is still in that $4 million range. The equity compensation because of GAAP and the requirements do add, you know, somewhere between one and a half and probably two million dollars going forward a quarter. But the targeted base run rate of the strategy business is still in the what we had discussed previously for four and a half million dollar range. And we continually look for ways to cut costs and be as efficient as possible. regarding the FCM in general, that is something that there will be additional costs. We're trying to move this forward as cost conscious as possible, but we need to figure out how, This will be pulled together. We will need to figure out what cost technology build-out we will need, and we're still in that process. And I'll turn it over to David, who's got some more insight into that.

Yeah, look, I would say the way we feel about the FCM in general is we want to see this as sort of asymmetric upside. We see this as spending a modest amount of money to get to the finish line to have an FCM up and running. And modest, I don't have the number for you, but it's measured in probably single digit million dollars. It's not $50,000, but it's certainly not $20 million. It's single digit million dollars as sort of a project, one-time project expense, I would think about it as. And then to the extent we get the approvals, to the extent we see a real business opportunity, we would only move it forward If we think we're going to be profitable in the very near term. This is not something we're looking to spend lots of money on with the hopes of making some money in the future. So again, we really focus on this as sort of an asymmetric kind of upside. And again, if it doesn't work for us, or as I said before, if someone else is able to do a better job for customers, that's great for us. We've spent a few million dollars, maybe we wish we hadn't, but we also, you know, facilitate a super, you know, sort of a super successful HIP3 star launch. That's perfectly good for us, because that probably adds a lot to the value of our tokens.

And maybe as a last point, can many, you know, When we're doing this, the big advantage that we have is that we can be extremely focused. This is not a general purpose FCM that we're setting up. It's very focused on one particular market, one particular structure. And in today's world, we can leverage a lot of resources. So we think that we can do this on a very efficient basis. But we'll make sure to keep you posted on any sort of updates as we're going through the process now. and trying to figure out which parts can be outsourced and what vendor costs are. And as we get more color on that, we'll make sure to keep everyone updated.

Totally, super helpful. Thanks for taking the questions and congrats again on the quarter.

Your next question will come from the line of Brian Vieten with Siebert. Please unmute your line and go ahead.

Hi, Brian.

Awesome.

Hey guys, congrats on the FCM announcement. I just had one on the per build out and then one on hyperliquid. So David, understood you don't intend to operate your own markets. I guess given the substantial treasury holdings, do you see an opportunity to provide You know, the 500,000 token staking requirement to third party hit market deployers in exchange for economics, similar to some of the capital as a service arrangements we've seen elsewhere in the ecosystem. And I guess could that complement the FCM business?

The answer is definitely maybe. The opportunity is obvious since we have close to $40 million of tokens on our balance sheet and there's a required amount of tokens to be a HIP3 or a HIP3 star deployer. So we've actually had some conversations like that. Like anything in this world, the devil's in the details. And as I said before, we kind of like asymmetric upside. We don't like the opposite. So to the extent we get comfortable with the various risks and we think there's enough profit in it to take the time, take the energy, and to take any risks, if any, we would certainly do it. But we're not sitting here saying we have to do a lot of this for our strategy in general to be successful. But definitely maybe is my answer.

Okay, yeah, that makes sense. And then stepping back to hyperliquid itself, one of the things that impressed us, and you kind of touched on it, but just how quickly the protocol has diversified beyond traditional crypto perps. And I guess as you look out over the next 12, 24 months, which opportunities are you guys viewing as the biggest incremental contributors to protocol fees and the hype token buybacks between HIP3 regulated US markets, HIP4 stable coins, any others?

I don't know if we lost you there. Operator, you still hear us, right?

Yep, I can still hear you.

I think I caught what he was... Yeah, we hear you now. Sorry, I think we lost you for a second.

Just like on the product side, what are you guys most excited about going forward?

Yeah, look, it's impossible not to be most excited about the thought of real-world assets in the U.S. trading on hyperliquid. And if you weren't excited about it, whatever it was, two weeks ago, seeing the TradeXYZ and ICE, New York Stock Exchange, announcement has got to make anybody excited. So I think it's hard with a straight face to say that in and of itself is not the most exciting thing we've seen. Obviously, more people doing it, more competitors, competitions are a great thing, right? Different deployers, both in the US and outside the US, sort of fighting to provide the best markets to the most amount of customers, we think is great. But again, the short answer to your first question is the US. I think, you know, something that's been still been a little bit of a sleeper and you mentioned is HIP4. I couldn't help but notice the unbelievable, what I consider to be success and value that Kalshi brought during the returns Tuesday night for the election. I think prediction markets are obviously very exciting, and I think the idea that others can build their competitors to CalSheet on hyperliquid is hugely exciting. Outcome.xyz has shown some real nice growth, and we're excited about that also. I can keep you on the phone for an hour about all the other things that continue to excite us, but I think that has to be our top two right now.

That's great.

Yeah, this is a different take on your question. We definitely like all the different products and the breadth and diversification of revenue in a hyperliquid. One of the things that we often talk about and that David also raised in the presentation today is On the distribution side, I think there are enormous opportunities. And again, coming back to the US, we think if and when hyperliquid is able to come to the US, that opens up a lot of very large markets, both on the retail as well as on the institutional side. We're very excited about what can happen there with a regulated stack sitting in the US. So there's a huge opportunity there. It's very early days.

That's great.

Thanks, Jerry. Our next question will come from the line of Matthew Galenko with Maxim Group. Please unmute your audio and ask your question.

Hey, guys. I appreciate you taking my question. My internet dropped kind of in the middle, so apologies if this is repeated. But just given the outcome of midterms, I'm curious if you could give us some scenarios of how you think that influences the hype's path into the US. Thanks.

Look, I think from what I can tell, I would say a few things on that point. One, directly answering your question, I don't think there's any material impact on hyperliquid coming to the U.S. This is clearly being handled by the regulators and the administration. I don't think this is going to change their opinion regarding hyperliquid or probably anything in crypto. Thank you for joining us. Hyperliquid, since Clarity is mostly a spot bill and we're mostly a perp venue. But I think in general, that would be seen as a nice step forward. And look, personally, I really hope, and I tweeted about this yesterday or the day before, I really hope that both parties going forward no longer see crypto as a partisan issue. I don't think, you know, there's all sorts of things that become partisan, but many things are bipartisan. And I think that, you know, I personally believe being anti-crypto is sort of a losing issue for either party. And I hope I'm not the only one that thinks that. Unless there are any other questions, or Matt, unless you have any follow-ups to that, I think that concludes our call. I certainly appreciate everyone listening in. I can tell you the four of us very much look forward to these calls. We enjoy this interaction. And obviously, both for the analysts on the call, but also the shareholders, please reach out. We spend lots of time talking to both analysts, shareholders. Potential shareholders, hopeful shareholders, et cetera. And we very much enjoy doing that, obviously, anytime. And we hope to continue doing that as much as possible. And we love seeing institutional investor interest and retail investor interest in Hyperliquid and in HSI. Thanks, everyone, for the time.