Earnings

Stablecoin Development Swings to Operating Income on SKY Gain

The Tip Desk · November 10, 2026 · 3 min read

The company posted $50.4 million of net income, or $0.23 a share, after a $58.8 million non-cash unrealized gain as SKY rose about 49%.

Stablecoin Development Corporation (SDEV), an on-chain holding company focused on the Sky Protocol ecosystem, swung from a $53.8 million operating loss in the second quarter to $56.0 million of operating income in the three months ended September 30, 2026, as a $50.6 million non-cash unrealized loss on digital assets flipped to a $58.8 million non-cash unrealized gain after SKY rose approximately 49%.

Net income was $50.4 million, or $0.23 a share on both a basic and diluted basis, after $5.6 million of income tax expense that was substantially all non-cash deferred tax on the unrealized gain. The company said the gain is not taxable until realized and does not affect cash. No SKY tokens were sold during the quarter.

SKY’s market price moved from $0.05215 a token at June 30, 2026 to $0.07764 a token at September 30, 2026. Holdings therefore moved from a cumulative unrealized loss at June 30 to a cumulative unrealized gain of $30.9 million at September 30. Chief Executive Officer and Chairman Michael Kazley said third-quarter results reflected both price appreciation and staking rewards.

Staking revenue was $2.1 million for the quarter, down from $2.2 million in the second quarter. The company earned 34,568,488 SKY in staking rewards, up from 31,746,251 SKY in the prior quarter, bringing cumulative rewards to 101,701,388 SKY.

SKY holdings increased to 2,321,079,862 tokens at September 30, 2026 from 2,286,511,374 tokens at June 30, still about 10% of total supply. Fair value rose to $180.2 million from $119.2 million and cost basis to $149.3 million from $147.2 million. Substantially all of the position remained staked in the Sky Protocol. Since the January 2026 private placement, the company said it had acquired about 1.3 billion additional SKY tokens through open-market purchases at an average of about $0.066 a token, in addition to staking rewards.

General and administrative expenses were $5.0 million in the third quarter, including about $3.3 million of non-cash stock-based compensation, leaving cash operating expenses of about $1.8 million versus $2.1 million of staking revenue. Total liabilities were $6.1 million, consisting primarily of a $5.6 million net deferred tax liability, with no debt and no warrant liabilities. Cash and cash equivalents were $7.2 million and total assets were $188.2 million. Stockholders’ equity was $182.2 million, with 51,751,359 shares outstanding.

During the quarter the company sold 1,160,636 shares under its at-the-market program for about $1.3 million of net proceeds. About $83.2 million of common stock remained available under the program at September 30.

On September 2 the board increased its size from five to six directors and appointed David Garcia Rios as an independent Class II director, and chartered an Investment Advisory Committee.

Subsequent to quarter end and through October 26, 2026, the company sold 15,801,547 ATM shares for about $45.9 million of net proceeds, leaving about $36.4 million available. SKY holdings were about 2.33 billion tokens. The SKY price fell about 13% to $0.06761 a token, valuing holdings at about $157.6 million. The company said those amounts are unaudited and that market value will continue to fluctuate.

On October 13, Tether Investments exercised a portion of its January 2026 Pre-Funded Warrant cashlessly for 5,743,762 shares, with a net issuance of 5,546,110 shares after withholding. On October 16 the second tranche, representing 30% of shares issuable, became exercisable. Common shares outstanding were 73,117,016 as of October 26.