SUI Group Holdings Limited (SUIG) Q3 2025 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call presents a mixed bag of results. Positive aspects include strong interest revenue growth, improved cash position, and promising partnerships like Google AP2. However, the significant unrealized loss on Sui holdings and increased operating expenses led to a net loss. The Q&A session highlighted optimism around new ventures but lacked concrete timelines, raising uncertainty. The combination of positive and negative factors suggests a neutral stock price movement.

Key Financial Performance

Gross revenue and portfolio investment income $2.6 million in Q3 2025, compared to approximately $711,000 in Q3 2024. This increase was driven by the generation of staking revenue following the adoption of the new treasury strategy.

Interest and origination revenue $1.6 million in Q3 2025, more than double the $711,000 recorded in Q3 2024. This growth reflects the strong performance of the legacy lending business.

Unrealized gains on investment portfolio $525,000 in Q3 2025, compared to an unrealized loss of $305,000 in Q3 2024. This improvement highlights the strength of the lending operations.

Noncash unrealized loss related to Sui holdings $60.7 million in Q3 2025, due to mark-to-market accounting adjustments on Sui holdings. This is a U.S. GAAP required treatment and does not represent an actual cash outflow.

Operating expenses (excluding net realized and unrealized gain on portfolio investments) $64.7 million in Q3 2025, compared to approximately $420,000 in Q3 2024. The increase was primarily driven by the noncash unrealized loss on digital assets and stock-based compensation.

Net loss $44.3 million or $0.72 per share diluted in Q3 2025, compared to net income of approximately $464,000 or $0.07 per diluted share in Q3 2024. The decrease was primarily driven by the noncash unrealized loss on Sui holdings.

Cash and equivalents $42.7 million as of September 30, 2025, compared to $6 million as of December 31, 2024. This reflects the company's improved liquidity position.

SUI holdings 105,681,292 SUI with a net value of $344.5 million as of September 30, 2025.

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Operating Highlights

Sui Blockchain: Sui is a next-generation Layer 1 blockchain designed for speed, scalability, and real-world applications. It supports use cases across finance, gaming, AI, and stablecoins. The platform is built for mainstream institutional-grade adoption and features advanced tools like Walrus for decentralized storage, DeepBook for on-chain liquidity, and Seal for enterprise-grade data security.

Agent Payments Protocol (AP2): Sui collaborated with Google and Mysten Labs to demonstrate how its programmable transaction blocks enable multiple verifiable transactions to settle atomically within a single block. This positions Sui as a leader in AI-driven financial activity.

Stablecoins (suiUSDe and USDi): SUI Group partnered with Ethena and the Sui Foundation to launch the first native stablecoins on the Sui blockchain. These stablecoins are designed to generate cash flows, grow the Sui treasury, and strengthen the balance sheet.

Institutional Partnerships: SUI Group partnered with Bluefin, a leading decentralized exchange on the Sui blockchain, to expand institutional participation. The agreement includes lending 2 million SUI tokens to Bluefin in exchange for a 5% revenue share.

Regulatory Developments: The GENIUS Act and CLARITY Act are creating a favorable regulatory environment for blockchain platforms. Additionally, Project Crypto by the U.S. Treasury and Federal Reserve signals federal recognition of blockchain-based settlement systems.

Treasury Holdings: SUI Group scaled its holdings to over 100 million SUI tokens, transforming its vision into measurable progress.

Stock Repurchase Program: SUI Group repurchased approximately 276,000 shares under a $50 million stock repurchase program, reflecting confidence in long-term fundamentals.

Specialty Finance Operations: Legacy lending business generated $1.6 million in interest and origination revenue, providing a profitable foundation for digital asset treasury initiatives.

Digital Asset Treasury Strategy: SUI Group shifted its focus to building a digital asset treasury platform aligned with the Sui blockchain. This includes accumulating and staking SUI tokens, deploying capital into on-chain ecosystem opportunities, and increasing SUI per share.

Ecosystem Growth: SUI Group aims to operate as a strategic focal point within the Sui network, deploying capital to accelerate infrastructure growth and ecosystem adoption.

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Risk or Challenges

Regulatory Risks: The company is exposed to uncertainties in the regulatory landscape for digital assets. While there is momentum with acts like the GENIUS Act and CLARITY Act, their outcomes remain uncertain, and any unfavorable regulatory changes could impact the company's operations and strategic plans.

Market Volatility: The company reported a $60.7 million noncash unrealized loss due to mark-to-market adjustments on its Sui holdings, highlighting the risk of significant financial impact from market fluctuations in digital asset valuations.

Strategic Execution Risks: The company's strategy to align with the Sui blockchain and build a digital asset treasury platform is ambitious and dependent on successful execution of partnerships, ecosystem adoption, and yield-generating initiatives. Failure in any of these areas could adversely affect its financial performance and strategic objectives.

Concentration Risk: The company's heavy reliance on the Sui blockchain and its native token (SUI) exposes it to risks associated with the performance and adoption of a single blockchain ecosystem.

Operational Risks: The transition from a specialty finance business to a blockchain-focused treasury model introduces operational complexities and potential challenges in managing new business processes and technologies.

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Guidance & Outlook

Regulatory Developments: The GENIUS Act is expected to clarify the treatment of yield-bearing stablecoins, while the CLARITY Act, if passed, will distinguish digital commodities from securities, potentially unlocking broader institutional participation in blockchain markets. Additionally, Project Crypto by the U.S. Treasury and Federal Reserve is exploring blockchain-based settlement systems, signaling federal recognition of distributed ledgers for financial infrastructure.

AI and Blockchain Integration: Sui's collaboration with Google Cloud's Agent Payments Protocol (AP2) initiative demonstrates its capability to support AI-driven financial activity. This positions Sui as a key player in the convergence of AI, digital identity, and real-time programmable payments.

Treasury Strategy: SUI Group aims to build a scalable, yield-generating digital asset balance sheet by accumulating and staking high-quality digital assets, deploying capital into on-chain ecosystem opportunities, and increasing SUI per share through strategic capital raises and share repurchases.

Stablecoin Initiatives: SUI Group, in collaboration with Ethena and the Sui Foundation, plans to launch suiUSDe and USDi, the first native stablecoins on the Sui blockchain. These stablecoins are designed to generate cash flows, grow the Sui treasury, and strengthen the balance sheet.

Institutional Participation: A partnership with Bluefin, a decentralized exchange on the Sui blockchain, aims to expand institutional participation. SUI Group will lend 2 million SUI tokens to Bluefin in exchange for a 5% revenue share, fostering institutional trading activity on the Sui blockchain.

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Shareholder Return Plan

Stock Repurchase Program: Under the new authorized $50 million stock repurchase program, the company repurchased approximately 276,000 shares of common stock. This action is described as a high-conviction investment that is immediately accretive to existing shareholders and reflects confidence in long-term fundamentals.

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Key Q&A

Q:When evaluating deployment of capital to companies like Bluefin or other protocols, what key metrics or criteria do you prioritize: yield, security, network activity or something else? How do you weigh counterparty risk versus returns? And then lastly, on Bluefin, what's the duration of that agreement?

A:The duration of the Bluefin agreement is 3 years, with an option for SUI Group to extend it for additional 3-year terms. Bluefin is annualizing approximately $14.5 million in fees, representing a 15% return year-on-year in SUI, paid bimonthly. The counterparty risk is considered low due to Bluefin's strong ties with the Sui ecosystem and the Sui Foundation. Due diligence was conducted, and the business is deemed robust. Bluefin is also expanding its product offerings, such as Vaults, and SUI Group is optimistic about its growth.

Q:Can you talk about the application development progress being made on Google's Agentic Payment Protocol, maybe when you might see some of the initial apps and when you expect it will generate early transaction volumes?

A:The agentic framework stack is expanding rapidly on Sui. A new company, Beep, with a team from PayPal and Walmart, has launched an agentic wallet on Sui. The Google AP2 partnership involves a consortium of partners, and announcements will be made through the Sui Foundation. No specific timeline for initial apps or transaction volumes was provided, but updates will be shared via official channels.

Q:Can you touch on your native stablecoin launch, how you'll generate incremental revenue in SUI from that?

A:The native stablecoin launch is planned within the next 2 to 3 weeks, with an expected liquidity of $100 million. Two stablecoins, suiUSDe and USDi, will be introduced. Revenue will be generated through a revenue share agreement with Ethena and the Sui Foundation, depending on ecosystem usage. Long-term, the stablecoin is expected to drive Sui accumulation in the ecosystem.

Q:Can you talk about functionally how you see AI and blockchain coming together over time, and why Sui is differentiated from other blockchains?

A:Sui is differentiated by its object-oriented blockchain model, unlike account-based models like Ethereum, Solana, and Avalanche. This allows for parallel settlement and limitless programmability, essential for agentic commerce. Sui's infrastructure includes Walrus (decentralized storage), Seal (key encryption), Nautilus (off-chain computation), and zkLogin (identity protocol). These components form the Sui stack, enabling scalability and agentic commerce. Recent developments include Beep's launch and the Google AP2 partnership, with more breakthroughs expected in the next 6 months.

Q:Can you talk a little bit about the pipeline of partnerships and where you expect the next partnerships to come from?

A:The focus is on liquidity and infrastructure. Partnerships like Bluefin drive liquidity, while infrastructure partnerships like Ethena's stablecoin support the ecosystem. The next priority is launching an ETF in the U.S., which will generate long-term fees and drive innovation. There are 5-6 partnerships in the pipeline, with the ETF being the main focus.

Q:Review of Unclear Management Responses

A:Management avoided providing specific timelines or details for the application development progress on Google's Agentic Payment Protocol, including when initial apps or transaction volumes might be expected. The response was vague and deferred to future announcements through official channels.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

SUIG Transcript

SUI Group Holdings Limited (SUIG) Q3 2025 Earnings Call Transcript

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