Sharplink (NASDAQ; SBET) reported a net loss of $394.3 million for the second quarter of 2026, despite an eleven-fold increase in revenue.
The company's balance sheet losses are attributed to non-cash charges related to Ethereum. Sharplink's stock (SBET) also suffered, falling 6%.
How Did Sharplink Lose $394 Million?
Sharplink reported an unrealized loss of $321.0 million on its Ether holdings due to declining $ETH prices in Q2 2026. The company's earnings report also indicates a $76.1 million write-down on two liquid staking tokens, LsETH and weETH. Both figures are accounting metrics under US GAAP. They reduce the book value of assets on paper.
The company noted that these losses will not be recouped if the market subsequently recovers, but this does not change the actual number of tokens owned by Sharplink. Realized gains partially offset the damage.
Sharplink's current position is worse than a year ago when the company reported a loss of $103.4 million. However, the nearly $400 million figure is an improvement compared to the first quarter of 2026, when Cryptopolitan reported a loss of $685.6 million caused by the same fair value revaluation mechanism amid a larger decline in $ETH value.
Despite massive losses, Sharplink generated $11.5 million in revenue for the three months ended June 30, up from $0.7 million a year earlier, with $11.2 million of that amount coming from $ETH staking rewards.
This surge reflects the active treasury asset management strategy launched by the company on June 2, 2025, which was in effect for a full quarter this time, rather than just a few weeks.
Expenses grew alongside revenue: selling, general and administrative costs reached $9.1 million, compared to $2.4 million a year earlier. Since then, Sharplink has had to incur significant costs for personnel, custody, insurance, legal, and accounting services related to operating a crypto bank management business at scale.
Will Sharplink Abandon Its Ethereum Assets?
The paper losses have not slowed the company's accumulation of $ETH. As of the end of June, Sharplink owned approximately 886,881 $ETH, and by August 3, it held about 888,938 $ETH, which, per GAAP standards at the quarter's end, was valued at around $1.4 billion.
On June 23, the company completed a $75 million equity offering, selling just over 10 million shares and warrants at $7.49 per unit, and used part of the proceeds to purchase approximately 10,000 $ETH at an average price of around $1,611.
The company also continued to repurchase its own shares, buying back about 2.1 million shares for approximately $10 million during the quarter. Since initiating the buyback program in August 2025, Sharplink has retired 4,071,223 shares for about $41.7 million. In June, index provider Russell added the stock to its 2000 and 3000 indexes.
Following the earnings release, SBET shares fell 6% and are currently trading at $6.05.
After the quarter closed, Sharplink and Galaxy Digital (NASDAQ: GLXY) launched the Galaxy Sharplink Onchain Yield Fund with committed capital of $125 million. Sharplink contributes $100 million from its staked $ETH assets, while Galaxy adds $25 million and manages the fund.
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