SharpLink Reports $685M Q1 Loss Despite $2B Ethereum Holdings

SharpLink Gaming revealed its FY26 first-quarter earnings on May 11, showing a significant rise in losses as the company continued expanding its Ethereum treasury strategy. Despite reporting more than $2 billion worth of Ethereum holdings, the company posted a net loss of $685.6 million for the quarter ending March 31, 2026, compared with a $1 million loss during the same period last year.

The sharp increase in losses was largely tied to non-cash crypto-related charges linked to declining Ethereum prices during the first quarter. SharpLink disclosed unrealized losses of $506.7 million connected to its ETH treasury holdings. Additionally, the company recorded another $191.7 million loss related to its LsETH positions. However, the company emphasized that these losses remain unrealized as it continues following a long-term Ethereum holding strategy.

Some of the negative impact was partially offset by approximately $12 million in realized gains generated through ETH-to-LsETH conversions, staking incentives, redemptions, and rebates.

Despite the losses, SharpLink’s quarterly revenue surged to $12.1 million, a major increase from $0.7 million reported a year earlier. Most of the revenue growth came from its Ethereum staking operations, which generated around $11.5 million during the quarter. Meanwhile, affiliate marketing revenue declined by 25% to $557,000.

Operating expenses also climbed significantly. Selling, general, and administrative expenses jumped to $9.9 million, up from $1.1 million last year, driven by infrastructure upgrades, staffing expansion, and investment in systems supporting the company’s ETH treasury platform.

SharpLink held 870,821 ETH as of March 31, 2026, increasing to 872,984 ETH by May 4. The company also disclosed that it accumulated roughly 18,800 ETH through staking rewards since launching its Ethereum treasury initiative in June 2025.

The firm recently signed a memorandum of understanding with Galaxy Digital to launch the proposed $125 million Galaxy SharpLink Onchain Yield Fund, aimed at further expanding its Ethereum reserves.