Hello, everyone, and thank you for joining us for AVAT's Second Quarter 2026 Earnings Call. This is an important quarter for our company, marking our first earnings report since completing our business combination and beginning to trade publicly on NASDAQ. I wanted to start by addressing the market environment we've been operating in and why, despite what has been a challenging period for crypto, we've remained incredibly excited about the opportunity ahead of ABAT. We successfully completed our business combination in June and began trading as ABAT. Since last October, digital asset prices have been under pressure, and we've seen that extend to digital asset companies across the sector as well. To put that environment into perspective, since October 1st to our last filing last Wednesday, Bitcoin is down approximately 50%, with broad digital asset indices down even more. We've seen similar pressure across digital asset related public companies. Over that same time period, Coinbase is down approximately 58%, Strategy is down approximately 73%, and Bitmine is down approximately 64%. More recent entrants into the public markets have faced similar pressure, with BitGo down approximately 70% from its IPO price and securitized down approximately 53% from its listing price. We think that context is important. The pressure we've experienced as becoming a public company has occurred against the backdrop of a broad and significant repricing across digital asset and digital asset-related companies. There are a few things that we believe have contributed to that environment. First, geopolitical instability and uncertainty around global financial policy have created an environment of higher inflation and higher interest rates, which has historically created headwinds for crypto and other macro-sensitive assets. Second, AI and data center infrastructure have absorbed an enormous amount of investor mindshare and growth capital. A significant amount of capital has gone towards funding that infrastructure build out, and we believe that has left crypto and blockchain infrastructure are somewhat in the shadows for this moment in time. And the third, digital asset legislation in Washington has taken longer than many of the industry expected. The Clarity Act remains unresolved, adding another element of uncertainty to broader digital asset markets. But when we look beyond the price, we see a very different picture. What's interesting about this cycle is that while prices have been challenging, blockchain adoption has been extremely active and alive. We have been involved in many discussions with financial and consumer institutions around education and planned adoption of blockchain technology. The conversations are no longer exploratory, but rather focus on implementation and planning various phases of adoption. We're seeing stablecoins continue to grow in their acceptance as well as their issuance. The tokenization of equities is no longer being debated, but rather announcements are being made weekly with concrete plans for the future we're seeing private credit money markets and other real world assets move on chain as the efficiency of the blockchain are understood we're seeing traditional financial markets moving towards 24-hour continuous trading instead of the work week trading hours this upgrade is also causing systems to be examined to fully support around the clock trading the existing financial infrastructure was not designed for that world most of the systems cycle at the end of the trading day and do not comprehend the concept of a weekend we believe the next generation of financial markets will require a new infrastructure built on blockchain and we believe avalanche is uniquely suited to compete and ultimately lead that vertical avalanche is the blockchain that has the privacy flexibility and scalability that institutions will require so when we look at the market today we believe that there is a disconnect between what is being reflected in digital asset prices and the amount of building, production activity, and adoption taking place both here in the United States and around the world. The rebound that occurred since last week shows how quickly sentiment can turn in this emerging technology. While there's been a crypto winter in digital asset prices, it has been a crypto summer in institutional adoption. We believe that it is just a matter of time until market sentiment catches up to all the fundamental growth and adoption. We're announcing today the board has approved a $10 million share repurchase plan of ABAC stock over the next 12 months. We believe this is one of the tools we have at our disposal to create shareholder value while this perceived disconnect exists in the market. I will now pass it over to our Chief Financial Officer, Son Ostrower, to walk through our Q2 financial update. After, I'm going to spend some time covering the macro environment we're operating in and what we're seeing across Avalanche and why we're so excited about the opportunities ahead for the next 12 months.
Thanks, Bart. As Bart mentioned, the headline from this quarter was that on June 11th, we completed our business combination and began trading on NASDAQ under the ticker AVAT. This is our first quarter reporting as a public company. Our treasury, the core of our strategy, held approximately 15.3 million AVACs at quarter end, roughly $100 million in carrying value at quarter end prices. And that treasury is working for us. Staking revenue net of fees was $1.5 million in the quarter and $3.6 million for the first half of the year. While we reported a net loss of $44.7 million or $1.54 per share, the context around that loss is important. The overwhelming majority of it does not reflect the cost of running this business. Roughly $35.7 million of losses came from market-driven losses on our AVAX holdings, fair value changes, realized losses, and impairments reflecting the decline in the price of AVAX during the quarter. Another $15.2 million was one-time transaction costs to complete the business combination. By comparison, our core general and administrative expenses were $3.5 million. So the way to think about the quarter is this. The go public work is done. The one-time costs that came with it are behind us. Our treasury is staked in generating recurring yield, and we are focused on what we set out to do. Accumulate AVAX, invest in the Avalanche ecosystem with our time, efforts, and funds, and help our investors gain exposure to the institutional adoption of Avalanche. With that, I'll hand it back to Bart.
Thanks, Sean. With everything happening in the macro environment right now, I wanted to take a few minutes on something simpler, why we are still so excited about Avalanche and what we're actually seeing across the ecosystem. I said it a moment ago, but it's worth repeating because it's really the whole story of this cycle the institutions are here and here's what's striking even with prices under pressure adoption of the technology has not slowed down stable coins are growing real world assets are moving on chain and we're seeing more and more interest in tokenized equities private credit and money markets at the same time the traditional markets are stretching towards longer trading hours we think that's heading in one direction a world where assets trade around the clock. You can't run a 24-7 market on the infrastructure that was never built for one. That world needs near instant settlement. It needs capital and assets to move and to flow more efficiently than they do today. The system we have wasn't built for that. We believe most of the infrastructure for that world gets built on blockchain and that Avalanche is uniquely suited to leave there. Let me tell you why we have the conviction and it starts with the architecture. Avalanche lets a business or an institution launch its own customizable layer one, private, and build around their exact requirements. And that matters because for a lot of these organizations, adopting blockchain is a big operational and technological leap. When they can keep control over the economics and the functionality of their own infrastructure and still stay connected to the broader ecosystem, that leap starts to look a lot more manageable. Now, that's great for getting started, but the smarter institutions are already looking past it. They want to interact with public blockchains because that's where the efficiency is that you just don't get from a private blockchain alone. And this is the part that we think is genuinely differentiated. Avalanche is the only blockchain that lets an institution keep the privacy and control it needs for some information while being natively connected to a public chain. And we're starting to see how these CCs show up in the real world. In Korea, KB Koopman Card, the credit card subsidiary of the country's largest bank, announced plans to build a stablecoin payment system and dedicated Layer 1 on Avalanche. FIFO built its own purpose-built blockchain on Avalanche technology. We'll come back to both of those in a minute, but zoom out and you see the same pattern everywhere. Institutional finance, payments, tokenization, consumer apps, gaming. Another differentiator is REITs. This isn't a U.S.-only opportunity. There is real activity across Korea, Japan, and Hong Kong, places where blockchain adoption and institutional engagement keep building. RAINN is a great example of that going global. It's a payments platform that lets businesses launch stablecoin-powered card programs so that users can spend digital assets anywhere Visa is accepted, and that's more than 150 million merchants worldwide. RAINN runs on Avalanche's C-Chain, and they recently teamed up with Wyoming and Avalanche to bring the state's frontier stable token into everyday commerce through RAINN-issued Visa cards. That's about as a direct line as you can draw from a blockchain-based asset to an ordinary purchase at the register. That global footprint matters more and more as the industry matures. Because we're moving past the phase where institutions are just asking whether blockchain has a role, the question is now a different one. Which infrastructure can actually support real institutional and consumer applications at scale, and where do we get started? And the market is beginning to tell those networks apart. Here's what sets Avalanche apart from that sorting. Fast finality and scale, the ability to spin up purpose-built layer ones and still connect then to the broader ecosystem. Customizable privacy that doesn't break global composability, where interoperability is native to the chain and credible neutrality with permissioning only when you want it. Put those together and you have infrastructure a business can shape around its own needs with the long-term efficiency and protections that comes from real blockchain technology. Now, here's the part I can be coming back to. Everything I just described is happening in genuinely difficult markets for digital asset prices. And to me, that's exactly what's so exciting. Prices have been under pressure, but development hasn't stopped. Institutions continue to explore. Tokenization hasn't stopped. Stablecoin adoption hasn't stopped. Businesses haven't stopped building. So there's a real disconnect here between all that underlying activity and what digital asset prices are currently reflecting. And we think that that gap starts to close. Right now, an extraordinary amount of capital and attention is pointed at the AI infrastructure build out. As that broadens into adjacent areas of innovation and growth, we believe blockchain infrastructure comes back towards the front of the conversation. Because we don't see AI and blockchain as competing for the future, just the opposite. We think that they succeed together, not at each other's expense. As AI drives an explosion in digital activity around the world, the need for trusted, verifiable, always-on infrastructure only becomes more important. And that's the exact environment we believe Avalanche is being built for. Looking out over the next 12 months, there's a lot across the ecosystem we're excited about. Continued institutional adoption, global expansion, new applications, new businesses choosing to build on Avalanche, and deeper engagement across the board. So yes, the pricing environment has been challenging, but we're staying focused on what's underneath it and on building for long-term success as we capture the value of businesses being built on Avalanche. When we look at what's actually being built, who's building it, and where financial and digital infrastructure is heading, our conviction only grows. We continue to believe that Avalanche is exceptionally well-positioned for the next phase of blockchain adoption. So let me make that concrete with a few developments in the quarter. Start with FIFA. As the world turns attention to the 2026 World Cup, FIFA ran its own purpose-built blockchain on Avalanche technology. To us, this is about as clear as an example you will find of what Avalanche was designed to do. Give a global organization customizable infrastructure and put blockchain-powered applications in front of a massive mainstream audience. For FIFA, that meant real control over ticketing and resales and tighter alignment with their fan rewards program. Second, real-world asset tokenization. In Japan, Progmat, the country's leading security token platform, announced plans to migrate more than $2 billion of tokenized securities onto Avalanche. We love this one because it pulls together the three parts of our thesis all at once. Institutional adoption, tokenization, and the global reach of the ecosystem. We're seeing that same momentum in Korea, as mentioned with KB, Kukmin Card, the credit card subsidiary of Korea's largest bank, is building a stable coin payment system on dedicated layer one on Avalanche. Put that next to the other payment activity in the region, and the message is hard to miss. Established financial institutions are moving beyond exploring blockchain and starting to build real infrastructure on it. And finally, the network itself backs up everything we're seeing from individual institutions. Avalanche's C-Chain processed roughly 236 million transactions in the second quarter. That's another record. The seventh consecutive quarter of transaction growth and stablecoin transfer volume reached about 84 billion in that period. Step back, and it all reinforces the disconnect I talked about earlier. Prices have been challenged, but underneath them, adoption and activity keep advancing. One of the world's largest sports organizations is building on Avalanche. Billions of dollars of tokenized assets are moving towards it. Major financial and payment institutions across Asia are building on it, and the network is running at record activity. Those are the fundamentals we're focused on and there's more ahead the avalanche summit in new york september 16th and 17th will bring together more than a thousand people from across the institutional developer and broader blockchain world and we keep finding opportunities for avat to participate more deeply in that growth as the ecosystem expands we're actively evaluating additional opportunities across it that we believe can create new sources of revenue and long-term value for our avat and our shareholders taking together these developments reinforce our conviction Avalanche is exceptionally well-positioned for the next phase of blockchain adoption, and we remain excited about the opportunity AVAC creates for our shareholders. Thank you very much.
