AVAX One (AVX) Q3 2026 earnings review
AVAX One cleared its debt, but sales and cash fell
AVAX One, which holds its money mostly in the Avalanche digital token, cleared its debt as cash ran down. Revenue, mostly rewards for helping run the Avalanche network, fell 13% from the second quarter by our math. A higher token price produced a $50 million profit, but the business itself lost money. By our math, May's full-year sales target needs fourth-quarter revenue 52% above this quarter's.
| Revenue | $2.4M −13% from last quarter, by our math |
|---|---|
| Profit excluding token price gains | −$4.8M $49.9M reported profit |
| Cash, including restricted cash | $10.6M $27.6M with escrow in December |
| Full-year sales outlook from May | Not repeated $11–12M; fourth quarter needs 52% more than the third, by our math |
⚖️ Verdict: 🔴 Bearish
The story got worse, because the business still spends more than staking and mining bring in while its cash keeps falling. One positive: the last convertible debt became shares after the quarter, ending its interest charges. But those swaps left each share with about 19% fewer tokens by our math, and both top executives left.
The question now is how AVAX One will pay its bills once its cash runs out. It can sell some of its unlocked tokens, or sell new shares. Year-end cash in the annual report will tell.
🐂 Bull Case
The Last Convertible Debt Turned Into Shares
AVAX One long relied on convertible debentures, loans whose holders can swap them for shares. Those loans carried interest and a rule to keep at least $3.5 million in cash and bitcoin.
After the quarter, the last holder converted about $1.0 million into 544,792 shares. The filing says "the debentures ceased to be outstanding, and the covenants under the debentures are no longer applicable".
This matters because charges on that debt reached $1.7 million in the third quarter, about 71% of revenue by our math. But holders took shares, not cash, so each existing owner holds a smaller part of the business.
What to watch: the interest line in the fourth-quarter results, due early next year. A figure near zero would confirm that the borrowing cost has ended.
Staking Keeps Adding Tokens to the Treasury
Staking means locking up tokens to help confirm transactions on the Avalanche network, which pays new tokens in return. AVAX One says it is "not merely accumulating AVAX tokens as a passive treasury asset".
Through September, the network paid it tokens worth $5.6 million. By our math, the treasury now holds or has claims on about 14.1 million tokens, against 13.9 million in December.
This matters because rewards arrive as tokens, so the treasury grows without new money from investors. But staking revenue fell about 18% from the second quarter by our math, and tokens pay no bills until someone sells them.
What to watch: the token count in the annual report. A higher count after any sales for cash would show that staking can cover the running costs.
🐻 Bear Case
Cash Covers Only a Few Quarters of Spending
Former finance chief Chris Polimeni said in May that AVAX One's cash covered about three years of costs. The filing still says its cash, rewards and mining are "expected to be sufficient to fund our operating expenses" for a year.
Cash, including restricted cash, fell to $10.6 million in September from $27.6 million of cash and escrow in December. After the quarter, the company also spent $4.3 million buying back shares.
- Cash used by operations, first nine months: $8.0 million
- Cash left after the October buybacks: about $6.3 million by our math
- Quarters of spending that covers at this year's pace: about two, by our math
- Tokens under lock-up: 8.7 million of about 13.3 million held, some until 2035
This matters because staking pays in tokens, not dollars, so salaries and insurance need token sales or new money. Selling unlocked tokens is possible, but it shrinks the treasury that the whole strategy rests on.
What to watch: year-end cash in the annual report. A balance near $5 million with no new funding would mean token sales now pay the running costs.
Spending Still Exceeds What the Business Earns
In May, AVAX One set a full-year target of $2–3 million of EBITDA, a profit measure before interest, taxes and non-cash charges. The filing does not repeat it.
Through September, the business instead lost $4.2 million from operations once non-cash charges come out. Overhead, meaning selling, general and administrative costs, reached 92% of revenue in the third quarter, from 78% in the second by our math. The filing blames "insurance costs coupled with severance expense".
This matters because the target now needs about $6.7 million of such profit in the fourth quarter alone, by our math, and no quarter this year came close.
What to watch: whether the annual report keeps or lowers the target. A lower figure would confirm that costs still exceed staking and mining income.
Debt Swaps Cut Tokens Owned per Share
AVAX One has said its goal is to raise the number of AVAX tokens behind each share. In the third quarter, debt holders swapped $7.7 million of debt for 2.72 million new shares.
By our math, that is about $2.81 of debt for each new share. Over the same months, the company bought back stock at about $4.94 a share, also by our math.
This matters because swaps added shares far faster than buybacks removed them, so each share now holds about 19% fewer tokens by our math. Shares outstanding rose 26% since December.
What to watch: tokens per share in the annual report. A figure above 1.45 would show that buybacks and staking now add more than the new shares took away.
Risks this quarter didn't answer
Several risks from earlier quarters got no clear answer in the third-quarter filing. Each item below names the disclosure that would settle it.
- Leadership: chief executive Jolie Kahn left in July and finance chief Chris Polimeni in August; naming a permanent chief executive would show who sets strategy.
- Acquisitions: AVAX One still aims to buy cash-producing businesses but has announced no deal; a signed purchase would test the plan.
- Treehouse tokens: this lending program holds 830,000 AVAX placed in March, now worth $5.4 million, and "typically the Company will absorb the losses" if it fails; a full redemption would end the risk.
- Manna sale: a buyer signed a letter of intent to pay $1.6 million for these baking-flour patents; closing in the fourth quarter would remove the last old business.
👓 Other Themes
Higher Token Price Turned the Quarter Profitable
The price of AVAX rose during the quarter, so AVAX One recorded a $55.1 million gain on its tokens. That gain turned the quarter into a $49.9 million profit. Without it and a $0.5 million loss on token sales, the business lost about $4.8 million by our math. In the first half, falling prices produced losses on the same holdings.
The Filing Barely Mentions the Alberta Data Center
In May, former chief executive Jolie Kahn described a 10-megawatt data center in Alberta for artificial intelligence computing, with a first tenant by early 2027. The third-quarter filing does not mention that date. Its only trace is $309,000 of prepaid data center costs. With Kahn gone, the plan has no stated schedule in these materials.
💲 Other KPIs
Bitcoin mining, which uses computers to confirm bitcoin transactions in return for new coins, grew 27% from a year ago. Growth from the prior quarter slowed to about 2% by our math. Direct costs took 89% of the unit's sales, against 51% a year ago. Replacing old machines also brought a $653,000 loss.
The mining unit kept more of the coins it produced, so holdings reached about three times December's 13.3 bitcoin. About 10 of them back loans from BitGo, a crypto lender. Those loans total $0.4 million and charge 9.99% a year.
Purchases of mining machines reached $1.5 million in the first nine months, up from $1.1 million a year earlier. That equals about 20% of revenue by our math. Net property and equipment climbed to $7.0 million, against $4.2 million in December.
❓ Key Questions
Does May's full-year sales and profit target still stand?
The filing repeats neither the $11–12 million revenue target nor the $2–3 million EBITDA target. By our math, fourth-quarter revenue would need to be 52% above the third's.
How will AVAX One pay its costs next year?
By our math, about $6 million of cash remained after the October buybacks. Operations used $8.0 million in nine months. Will it sell tokens or new shares to fill the gap?
When will the board name a permanent chief executive?
Interim chief executive Peter Wylie Jr. also remains chief operating officer, and the finance chief left in August. The board hired a search firm but gave no timing.
Is the Alberta data center still on schedule?
Former chief executive Jolie Kahn promised a first tenant by early 2027. The filing mentions only $309,000 of prepaid data center costs and no date.
How many AVAX tokens does the Treehouse holding represent?
AVAX One placed 830,000 tokens there in March. At September's price those would be worth about $9.1 million by our math, yet the filing values the holding at $5.4 million.