Earnings call transcript: Ethzilla Q3 2025 results highlight strategic pivot

Ethzilla Corp (ETHZ) reported its third-quarter 2025 earnings, showcasing a strategic shift from biotech to digital asset management. The company revealed a net loss from continuing operations of $208.7 million, alongside revenues of $4.1 million from staking yields. Despite the strategic pivot, Ethzilla’s stock experienced a decline, with a premarket drop of 6.98% to $15.05.

Key Takeaways

• Ethzilla has pivoted from biotech to digital asset management.
• The company reported a net loss of $208.7 million for Q3 2025.
• Ethzilla’s stock fell 6.98% in premarket trading following the earnings release.
• The company has acquired 102,000 ETH and plans to tokenize real-world assets.

Company Performance

Ethzilla’s transition from a biotech focus to digital asset management marks a significant shift in strategy. The company has invested heavily in digital assets, purchasing 102,000 ETH for $415 million and deploying over $300 million across restaking protocols. This strategic move aims to leverage the growing market for tokenized assets, targeting sectors such as aerospace, consumer credit, and real estate.

Financial Highlights

• Revenue: $4.1 million from staking yields.
• Total Assets: $1.01 billion, a significant increase from $12.8 million in 2024.
• Digital Assets: $180.9 million.
• Cash and Cash Equivalents: $558.9 million.
• Net Loss from Continuing Operations: $208.7 million.
• Adjusted EBITDA: $8.5 million.
• Net Asset Value: $445 million ($27.79 per share).

Outlook & Guidance

Ethzilla has not provided a formal outlook for 2026 but expects a Q4 yield run rate of 3.5% to 4.5%. The company plans to continue its focus on tokenizing real-world assets and scaling its ETH deployments. This strategic direction aims to capitalize on the vast potential of the tokenization market, which Ethzilla estimates to be in the trillions of dollars.

Executive Commentary

CEO Mick Andrew Rudisill emphasized the company’s new direction, stating, "We are not a digital asset treasury company." He highlighted the versatility of the business model, noting, "The beauty of this business model is that you can... tokenize anything down to a $10 million asset up to a $1 billion asset." CFO John Saunders reinforced the company’s focus on ETH accumulation and higher yields, saying, "We remain focused on accumulating ETH, generating significantly higher yields than native staking activities, tokenizing real-world assets, and executing a disciplined capital strategy."

Risks and Challenges

• Market Volatility: Fluctuations in the digital asset market could impact Ethzilla’s financial performance.
• Regulatory Environment: Changes in regulations could affect the company’s operations and strategic initiatives.
• Competition: Ethzilla faces competition from companies like Figure and Securitize in the tokenization space.
• Execution Risk: Successfully transitioning from biotech to digital asset management presents operational challenges.
• Economic Conditions: Broader economic conditions could affect investor sentiment and market demand for tokenized assets.

Full transcript - Ethzilla Corp (ETHZ) Q3 2025:

Megan, Conference Call Operator: Hello, and welcome to ETHZilla Corporation’s Third Quarter 2025 earnings conference call. During today’s discussion, all callers will be placed in a listen-only mode. Following management’s prepared remarks, the call will open for questions. This call is being recorded on November 14, 2025, and a replay will be made available on the Investor Relations page of ETHZilla’s website at ethzilla.com later today. I will now turn the call over to John Kristoff, Senior Vice President, Corporate Communications and Investor Relations.

John Kristoff, Senior Vice President, Corporate Communications and Investor Relations, ETHZilla: Thank you, Megan.

Hello, and thank you for joining ETHZilla’s Third Quarter 2025 Financial Results Conference Call. Joining me on the call today are Mick Andrew Rudisill, Chairman and Chief Executive Officer, and John Saunders, Chief Financial Officer. We hope you’ve had an opportunity to review our Third Quarter 2025 financial results press release that we issued earlier this morning. We’ve also posted an earnings presentation on the IR page of our website. As a reminder, some of the matters we’ll be discussing on this morning’s call are forward-looking in nature. Please keep in mind that actual results could differ materially from what is expressed in these forward-looking statements. ETHZilla assumes no obligation to update the information, and we encourage you to refer to our more recent filings with the SEC for a discussion of factors that could cause actual results to differ materially from these statements.

During our call, we may also reference certain non-GAAP financial measures, which we believe provide useful information for investors. A reconciliation of these non-GAAP measures to the corresponding GAAP measure can be found in our press release filed today and on the presentation on our website. With that, I’ll turn the call over to Mick Andrew Rudisill.

Mick Andrew Rudisill, Chairman and Chief Executive Officer, ETHZilla: Thank you, John, and good morning. Thank you for joining us today for ETHZilla’s third quarter financial results call. This marks our first call as ETHZilla, and I’m proud to share our initial results and outline how we’re building a strong foundation for long-term value creation. ETHZilla is a technology company connecting traditional finance with decentralized finance through the Ethereum network. We hold and deploy ETH on our balance sheet to generate on-chain yield and support the development of tokenized real-world assets. Our platform strategy combines ETH accumulation and superior yield generation through restaking protocols with regulated infrastructure for trading tokenized assets, allowing institutional capital to participate in DeFi under public company compliance and oversight. This model is what makes ETHZilla unique. We are not a digital asset treasury company. This was a transformational quarter as we underwent our strategic rebrand, officially becoming ETHZilla and divesting our legacy biotech assets.

During the quarter, we strengthened our balance sheet, completed three financings, deepened our partnerships across DeFi, and began deploying ETH to generate yield. We raised approximately $931 million through a $425 million private placement, a $156 million convertible note, and a subsequent $360 million convertible note. The funding moves us from concept to execution by supporting ETH purchases, deployments, and the infrastructure behind tokenized assets and on-chain yield generation. Supporting the first pillar of our growth strategy, we purchased approximately 102,000 ETH at a cost of approximately $415 million, and we quickly put our ETH to work. We initiated the second pillar of our strategy to generate superior yield on our ETH holdings. Through our partnership with Electric Capital, they deployed our ETH with Ether.fi and Puffer Finance.

Beginning in mid-August, we deployed over $300 million across leading restaking protocols and generated $4.1 million in the second half of the quarter from these Layer 2 deployments. These initiatives established our foundation for recurring on-chain cash flow, demonstrating how we can use our balance sheet to generate incremental returns that support ETHZilla’s long-term growth. By directly deploying corporate capital into Ethereum-based yield protocols with institutional oversight, we’re leading by example and demonstrating how a public company can bridge traditional finance and decentralized finance responsibly and profitably. It’s important to partner with these Layer 2 protocols in order to enable the third and most important component of our strategy: creating a regulated exchange infrastructure for tokenized assets. Our strategic investment and partnership with Liquidity.io marked a foundational milestone. Liquidity.io is one of the first regulated marketplaces licensed to issue and trade tokenized private assets.

We believe that our 15% stake in the parent company of Liquidity.io and exclusive right to list Ethereum Layer 2 tokens on Liquidity Exchange positions ETHZilla at the forefront of the movement to bring private credit, real estate, and other yield-generating assets on-chain. Simultaneously, Liquidity.io’s partnership with RF Lafferty will make it one of the largest pre-IPO equity marketplaces in the world. This strategic partnership provides us with the infrastructure, compliance framework, and distribution network to bring real-world assets directly into decentralized markets. It’s important to note we have a right of first refusal to continue to increase our equity position in Liquidity.io as more capital is raised. We believe the migration of assets to the Ethereum network is no longer speculative.

It has become inevitable based on the structural advantages the Ethereum network provides: advantages such as global accessibility, programmable settlement, transparent ownership, and composability, allowing assets and liquidity to move seamlessly between applications. These, along with improved U.S. regulatory clarity like the Genius Act and growing institutional adoption from some of the largest financial institutions in the world, give us confidence in the future of tokenized real-world assets as a core component of global markets. Our focus now turns to execution and realizing the potential growth and recurring cash flow from these strategic initiatives. In the coming weeks, we expect to begin listing the first ETHZilla-managed tokenized real-world assets on Liquidity.io. This is a culmination of all our hard work in building out the right foundational operating model. We believe it demonstrates our full flywheel in action, from acquisition and token creation to yield distribution.

We expect to replicate this process across multiple asset classes, establishing a recurring and scalable model for on-chain income and direct cash flow to ETHZilla. Since September 1, we repurchased about 2.1 million shares of our common stock at a material discount to NAV. We are aware of the value of the assets on our balance sheet, and we are also conscious of our recurring and growing cash flow stream. The best way to normalize this is through the prudent and opportunistic use of share repurchases. As we scale deployment, risk management remains central. Our deployments are executed by Electric Capital, one of the industry’s most experienced digital asset managers and among our largest shareholders. Electric Capital provides rigorous due diligence, diversification, and ongoing monitoring across restaking and DeFi protocols, giving us the confidence to deploy capital productively while maintaining institutional-grade standards of control, compliance, and transparency.

This structure ensures both professional management and full alignment of interest between ETHZilla and our investors. While the tokenization of global assets is still in its early stages, we believe ETHZilla is uniquely positioned to lead this charge and that we have the right foundation and partnerships in place to allow us to be the first movers in this space. We believe the market is at an inflection point and that there’s going to be a significant differentiation in business models across this entire space. We stand at the forefront of this change as we embark on bringing the first real-world assets on-chain. We remain extremely focused on building recurring cash flow. It is an exciting time to be in this space, and I’m excited to speak more about what we have planned in the coming weeks.

Before turning the call over to John, I want to take a moment to recognize and congratulate him on his promotion to Chief Financial Officer. John is a talented strategic financial leader with decades of experience in finance, accounting, treasury, capital, strategy, and operational transformation. The board and I have the highest confidence in John’s ability to play a key role in scaling ETHZilla as a recognized leader in bridging traditional finance and DeFi platforms. With that, I’ll turn it over to John.

John Saunders, Chief Financial Officer, ETHZilla: Thank you, Mick Andrew, and good morning, everyone. I’ll take a few minutes to walk through our financial performance for the quarter, review key balance sheet metrics, discuss cash flow and capital allocation, and close with our outlook for the remainder of the year. Looking at our results for the third quarter, ETHZilla generated revenue of $4.1 million from staking yields on our Ethereum holdings and incentive tokens earned through liquid staking activities. For many periods prior to our transaction, 180 Life Sciences generated no revenue. This is the first quarter of yield generation following our strategic pivot into digital asset management earlier this year. It is important to note that native staking activity only commenced in late August, and liquid staking activity did not commence until mid-September.

Even so, our average yield rate on staked ETH during the quarter was approximately 7% annualized, showcasing the company’s strategy to deploy ETH on-chain for higher risk-adjusted returns. The Q3 yield is significantly higher than typical native staking yields. We are in discussions with several additional protocols for potential collaborations similar to Puffer, where ETHZilla would serve as a staking capacity and growth partner in exchange for token-based incentive structures. This remains a key part of the company’s strategy to acquire additional ETH units and deploy them on-chain to generate higher yields and significant free cash flow in the business. The company also recorded approximately $940,000 of interest income and dividend income from the USD Treasury. Selling, general, and administrative expenses for the quarter were $224.6 million, reflecting several large non-recurring and non-cash items associated with our corporate transformation.

The largest items include approximately $209 million in stock-based compensation, primarily tied to the initial issuance of warrants and associated with our rebranding and finance transactions, and professional fees and underwriting expenses of $8.6 million in connection with the convertible note sales. Approximately $174 million of the stock-based compensation incurred in the quarter arose from the strategic advisor warrants issued in the pipe financing transaction. These warrants are currently out of the money. The GAAP stock-based comp expense for these warrants issued for services is determined by using a Black-Scholes model that is heavily driven by the grant date share price. As the company’s stock price had experienced a substantial run-up in price prior to the grant date, the stock-based compensation is distorted by the grant date share price.

Other income for the quarter was approximately $11.8 million, consisting of $7.5 million realized and unrealized gains on digital assets, $3.7 million of change in fair value of convertible debt, as well as $940,000 of interest income and dividends from our cash and cash equivalents. Net loss from continuing operations for the quarter was $208.7 million, compared to a net loss of less than $1 million in the same period last year, reflecting the impact of these one-time non-cash expenses. Net loss from discontinued operations was $8 million. The company has taken an impairment charge to write off the value of the prior company’s assets. The company recorded $8.5 million in adjusted EBITDA, representing a significant increase in year-over-year adjusted EBITDA compared with Q3 2024 adjusted EBITDA loss of $1.35 million.

We define adjusted EBITDA as EBITDA plus non-cash stock-based compensation, expense related to integration costs for completed acquisitions and potential targets, one-time costs for professional fees related to the preparation for potential offerings that have been expensed in the quarter, and non-recurring or one-time charges such as impairment or restructuring costs. As of September 30, 2025, ETHZilla reported total assets of $1.01 billion, a dramatic increase from $12.8 million at year-end 2024. Following our conversion into an Ethereum-based financial technology company, we held $180.9 million in digital assets, including raw ETH, native staked ETH, and incentive tokens earned from ETH validation capacity services. We also recorded staking receivables of $257.6 million, which reflect ETH deployed on-chain in liquid staking activities. We ended the quarter with $558.9 million in cash and cash equivalents, providing substantial flexibility to execute on our growth and capital return strategy.

The USD Treasury expected to earn yields of approximately 4.25% annually and approximately 2.25% net of interest expense and will contribute significantly to our free cash flow. Total liabilities were $564 million, driven by the convertible debt of $496 million at net of fair value and approximately $50 million of collateralized loans. Subsequent to the quarter end, we repaid approximately half of the collateralized loan balance. Our net asset value stood at approximately $445 million, or roughly $27.79 per share on September 30, 2025. During the first nine months of 2025, net cash increased by $554 million, primarily driven by $825 million in net cash provided by financing activities, including the issuance of convertible instruments and equity raises tied to our ETHZilla restructuring.

We repurchased approximately 2.1 million shares since September 1, totaling $46.3 million as part of our previously announced repurchase program, reflecting management’s confidence in the long-term value of our stock. Turning to our capital allocation strategy, our priorities remain the same: acquiring ETH and maintaining a strong liquidity position, scaling ETH yield operations, preparing for asset tokenization, and optimizing our capital structure for robust growth. We believe strategic repurchases of the company’s stock will drive the company’s long-term net asset value growth. Looking ahead to the fourth quarter, we anticipate a Q4 yield run rate in the 3.5%-4.5% range, consistent with current macroeconomics. In the coming weeks, we will also commence tokenization of select digital and real-world assets under our ETHZilla platform, which we believe will eventually generate returns well in excess of our ETH staking yields.

As these initiatives ramp through the end of the year, we expect to have better visibility into the tokenization business’s run rate and growth trajectory exiting Q4. Accordingly, we will not be providing formal 2026 outlook until our Q4 2025 earnings call, at which point we expect to offer a more comprehensive view of our consolidated revenue model and profitability targets. To summarize, Q3 marked a transformative quarter for ETHZilla, from a traditional biotech entity to a fully capitalized digital asset platform with over $1 billion in total assets and in excess of $4 million in third-quarter revenue. We are executing from a position of strength with a clear strategy to create value by diversifying across on-chain protocols to optimize yield and mitigating counterparty and smart contract risks.

We remain focused on accumulating ETH, generating significantly higher yields than native staking activities, tokenizing real-world assets, and executing a disciplined capital strategy. We have a growing pipeline of opportunities to utilize the Ethereum blockchain to generate yields and disrupt traditional finance processes. Thank you. With that, I’ll turn it back to Mick Andrew for a further discussion of our expansion plans.

Mick Andrew Rudisill, Chairman and Chief Executive Officer, ETHZilla: Thank you, John. We set out to reimagine how a public company could connect institutional capital with decentralized finance through Ethereum. In our inaugural quarter as ETHZilla, we successfully navigated this strategic operational shift, raising the capital we needed, putting ETH to work on-chain and securing a regulated path to tokenize and list real-world assets on-chain. Our advantage is structural. We hold and deploy ETH as a productive balance sheet asset. We operate with a best-in-class governance structure, and we partner with and invest in regulated market infrastructure so institutions can participate with confidence. As tokenization expands, we intend to originate, tokenize, distribute, and service assets at scale. We believe this shift will accelerate over time because the economics and transparency are better for both asset owners and investors.

Our plan is simple: scale ETH deployments with discipline, launch tokenized assets and repeat across categories with recurring distributions, and maintain alignment through rigorous risk management and prudent capital allocation, including continued willingness to repurchase stock when it is accretive. I want to thank our team, our partners, our shareholders, and the board. Your support allows us to execute with the necessary speed as this market rapidly evolves. We’re confident in the strategy we’ve built and believe ETHZilla is primed to be a leader in this space. We look forward to continuing the conversation, and thank you all again for joining us today. Operator will now open up the call for questions.

Megan, Conference Call Operator: Joined via the webinar, please use the raise hand icon, which can be found on the bottom of your webinar application. When you’re called upon, please unmute your line and ask your question. We will now pause a moment to assemble the queue. Our first question will come from Spencer Anson with Susquehanna. Your line is open. Please ask your question.

Spencer Anson, Analyst, Susquehanna: Great. Thanks, guys. Congrats on the promotion, John. I guess if I could just step back and ask, what types of assets is ETHZilla planning on tokenizing, and when can we expect to see that happen?

Mick Andrew Rudisill, Chairman and Chief Executive Officer, ETHZilla: Yeah, it’s a great question. We have a pretty large queue of assets that we’ve put in place to tokenize, and we’ve been actively working on it over the last year. I have a pretty lengthy background in aerospace. There’s a very high amount of return that you can generate on aerospace assets, and these are all securitized assets already. That is one place that we’re going to go very early. The second area that we’re focusing on is consumer credit receivables. These are also already securitized in very large packages on Wall Street. We have two different platforms that we’re working on for these consumer credit receivables. All of these generate high single-digit to low double-digit yields and are pretty high credit quality. We have been working on real estate for quite a while, so I think you’ll see that come onto the platform.

There are multiple different private equity platforms that we’re looking to partner with to bring their funds onto the platform.

Spencer Anson, Analyst, Susquehanna: Okay, great. As a follow-up, the tokenization is really a fascinating topic. Can you just walk through the business model? How do you expect to generate? How do you expect to scale the business? What kind of capital is required to get the tokenization business off the ground?

Mick Andrew Rudisill, Chairman and Chief Executive Officer, ETHZilla: Okay, a lot of good questions. First of all, the TAM in all these markets that we’re working on is enormous. It’s literally trillions of dollars collectively all around the world. What’s interesting about it is Wall Street is already doing a lot of this business, but it’s only accessible to institutional investors at extremely large scale. A lot of these securitizations occur at a minimum of $200 million to $500 million. What we’re doing is we’re taking packages of these same assets, and we’re going to be able to tokenize them in pools of $25 million to $100 million. What type of capital is required is we will have to, on balance sheet, some percentage of the initial seeding of these tokens.

Once the tokens are opened up on Liquidity.io, it will then allow institutional investors and accredited investors to invest in the tokens. From that point forward, they can effectively scale into really any amount of capital they want as long as we continue to provide the conduits to put the assets into the tokens. In terms of how do we make money doing this, there are quite a few ways. Number one, we make money holding the assets that generate the yield in these tokens. Two, we make money from managing the tokens. Three, there is a carry structure similar to the private equity model where incremental capital that is deployed in each of the tokens, we take a percentage of the yield that is generated from the assets inside the token.

That’s what asymmetrically scales the cash flow of the business as the token model expands.

Spencer Anson, Analyst, Susquehanna: All right, great. Mick Andrew, John, thanks so much. It’s exciting stuff. Look forward to watching how the company progresses through the coming quarters. Thanks.

Megan, Conference Call Operator: Your next question will come from Brian Dobson with Clear Street. Your line is open. Please ask your question.

Brian Dobson, Analyst, Clear Street: Hey, good morning. As you’re looking out over the competitive landscape, what do you think differentiates ETHZilla when you’re looking at your competition? I guess as a follow-up to that, the Treasury space is becoming a little bit more crowded. How do you view that? Do you think it’s better for the industry, or how are you thinking about, call it, increased competition in the space?

Mick Andrew Rudisill, Chairman and Chief Executive Officer, ETHZilla: Yeah, hey, Brian. First of all, I’d say we just don’t consider ourselves a Treasury at all. We have Ethereum, and we have a stake with partners for strategic reasons, particularly because there’s going to need to be some collateralization associated with the tokens that we create on Liquidity.io. I mean, we really view our competition as Figure and Securitize. I mean, we are in the tokenization business, and liquidity is the focus of what we’re doing. Most of the cash flow and revenue that we’re going to generate going forward is going to be generated from the creation of these Ethereum Layer 2 tokens based on real-world assets. We will opportunistically continue to acquire ETH if the opportunity presents. I mean, the way for us to make the most money in the future is to bring billions of dollars of assets onto the Liquidity.io platform.

Brian Dobson, Analyst, Clear Street: Thanks. Just as a quick follow-up, do you think your initial focus will be more in publicly traded companies or in private companies looking to tokenize certain securities?

Mick Andrew Rudisill, Chairman and Chief Executive Officer, ETHZilla: We’ve been working with both. Some of the largest public companies in a variety of different spaces are pretty interested in working with us. I think there’s opportunity on the private side too. I mean, the beauty of this business model is that you can, within a certain scale size, tokenize anything down to a $10 million asset up to a $1 billion asset. We just have to be selective about the quality of assets that we bring onto the exchange. We’re being really focused on just high-yield generation assets relative to the risk profile.

Brian Dobson, Analyst, Clear Street: Yeah, very good. Thank you.

Megan, Conference Call Operator: Our next question will come from Mark Palmer with Benchmark. Your line is open. Please ask your question.

Mark Palmer, Analyst, Benchmark: Yes, good morning, and thanks for taking my questions.

Megan, Conference Call Operator: Mark, are you with us? Your line is muted.

Mark Palmer, Analyst, Benchmark: Yes. How do you think about the interoperability between ETHZilla’s tokenization platform and various existing DeFi protocols, especially insofar as the company is effectively creating a link between TradFi and DeFi for institutional investors?

Mick Andrew Rudisill, Chairman and Chief Executive Officer, ETHZilla: Mark, that’s a great question. It’s a complicated question, and we’re working through that right now. DeFi has done a tremendous job creating lending protocols for various digital assets all around the world. The bridge that’s going to get created, which is where I think Wall Street is going as a whole, is that tokenized real-world assets that live on digital asset exchanges are going to have the same liquidity profile as digital assets on exchanges like Coinbase or Binance today. What we’re going to have to do is set up relationships like we’ve already done with Ether.fi and Puffer and other Layer 2 staking protocols so that the tokenized real-world assets ultimately get a collateralization benefit in the DeFi world. To simplify it, what I’d say is similar to having a portfolio margin line on your stock account.

If you own a tokenized real-world asset, you’re going to be able to get some collateral release on that to make other investments. You also may be able to release it into ETH and generate incremental yield by holding that ETH in addition to the investment that you have in the tokenized real-world asset. If you think about that, it’s extremely powerful because it basically allows you to amplify the capital you have at work on-chain by owning real-world assets that are cash-line.

Mark Palmer, Analyst, Benchmark: Thank you. That’s very helpful. Just one follow-up question. You posted an annualized yield of 7% on your staked Ether. As was mentioned, this is just the early going in terms of that deployment. How do you think about what is feasible in terms of the yield that you could be earning on the Ether that you do stake? Do you think about a maximum bound there that’s possible?

Mick Andrew Rudisill, Chairman and Chief Executive Officer, ETHZilla: Okay. Like everything in the world, this is a risk-reward question. We took a lower-risk strategy initially on our Ether staking. To get a higher yield on our Ether, number one, we would need to deploy new Ether to generate the high single-digit yield like we did this quarter because we received token incentives from our partners to generate that yield. I think the stabilized yield, like we said in our release, is kind of 3.5%-4.5%, which is above the normal native staking yield by partnering with the current Layer 2 incentives. If we invest in new Layer 2 partners, like John mentioned during the call, then we can generate 7.5%-11% on Ether. It does require us to buy more Ether to get that higher yield.

Given where the stock is trading, it’s more accretive for us to buy the stock than it is for us to buy ETH right now. That’s the delta on where the yield on ETH will be in the future for us. We have the capacity to make pretty substantial returns on ETH. I think strategically, we are thinking about which Layer 2 partners we want to be partnered with, which circulates back to the tokenization protocols on Liquidity.io because we need partners that can help us on the exchange side.

Mark Palmer, Analyst, Benchmark: That makes sense. Thanks very much.

Megan, Conference Call Operator: Yep. As a reminder, if you would like to raise your hand, please use the raise hand icon, which can be found on the bottom of your webinar application to ask a question. We’ll wait a moment for any last-minute questions.

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