FRMO Corp. Has reported a significant swing in its quarterly performance, posting a net income of $83.4 million for the third quarter of fiscal year 2026, ending February 28, 2026. This marks a sharp recovery from the $23.7 million net loss recorded during the same period a year earlier.
The company, an intellectual capital firm focused on asset management advisory and digital asset mining, attributed the quarterly gain largely to a specific equity security investment, identified in its financial filings as Investment A. While the headline figure shows a strong rebound, the broader nine-month window presents a more tempered view; net income attributable to the company for the nine months ended February 28, 2026, stood at $56.9 million, down from $121.3 million in the prior year.
This volatility underscores the company’s reliance on the fluctuating valuation of its investment portfolio. When stripping away the unrealized gains and losses from equity securities and digital assets—a non-GAAP measure the company uses to gauge core performance—the three-month net income was $16.9 million, compared to a $9.2 million loss in the previous year’s third quarter.
Shifting Revenue Streams and Book Value Growth
A key point of friction in the latest results is the decline in consulting and advisory fees. These revenues dropped during both the three and nine-month periods compared to 2025. The company noted that this decrease was primarily due to a reduction in fees earned from its royalty participation with Horizon Kinetics Holding Corporation (HKHC), which had recognized substantial incentive fees during the 2025 fiscal year.
Despite the dip in advisory revenue, the company’s overall balance sheet has expanded. Total book value as of February 28, 2026, reached $795.2 million, a notable increase from the $617.8 million reported at the end of the prior fiscal year on May 31, 2025. Equity attributable to shareholders, excluding non-controlling interests, rose to $376.7 million, or $8.56 per share, up from $7.26 per share in May 2025.
The company’s liquidity remains stable, with current assets—mostly cash and cash equivalents—holding steady at $46.3 million. However, total liabilities increased to $124.3 million from $95.6 million, driven largely by deferred taxes and securities sold that have not yet been repurchased.
Executive Leadership Transition
Alongside the financial reporting, FRMO Corp. Announced a restructuring of its top leadership. The Board of Directors has appointed Peter Doyle and Steven Bregman as co-Chief Executive Officers. To round out the executive team, David Arndt has been named Chief Financial Officer. Arndt brings more than 15 years of experience as a financial professional and CFO, and he continues to serve as a senior financial advisor to HKHC.
This leadership shift comes as the company looks to balance its traditional advisory role with its more speculative ventures. In its report, FRMO expressed a specific intent to find new avenues to expand its digital assets mining operations, though it cautioned that the market value of these assets is subject to substantial change.
Understanding the FRMO Financial Structure
For investors and analysts, the complexity of FRMO’s financial statements stems from its deep ties to Horizon Kinetics. The company holds a 4.42% stake in HKHC and maintains a 21.77% equity interest in Horizon Kinetics Hard Assets LLC (HKHA). Because of common control and ownership between HKHA and FRMO’s principal stockholders, HKHA is consolidated within the company’s financial statements, though the 78.23% non-controlling interest is eliminated from the results of operations.
The following table summarizes the key shifts in shareholder equity and net income between the 2025 year-end and the 2026 third quarter.
| Metric | May 31, 2025 | Feb 28, 2026 |
|---|---|---|
| Total Book Value | $617.8 Million | $795.2 Million |
| Equity per Share | $7.26 | $8.56 |
| Total Liabilities | $95.6 Million | $124.3 Million |
| Cash & Equivalents | $46.3 Million | $46.3 Million |
Digital Assets and Market Risks
The company’s foray into digital assets remains a volatile component of its portfolio. While it is actively seeking to expand mining operations, the unrealized gains or losses from digital assets can significantly skew GAAP net income. For the three months ended February 28, 2026, the company reported an unrealized loss from digital assets of $3.8 million, contrasting with a nine-month cumulative unrealized loss of $6.1 million for the same period.
This volatility is why the company emphasizes its non-GAAP “core” income. By removing the “noise” of market fluctuations in equity and digital assets, the company provides a clearer picture of its operational health, which in this case showed a modest but positive trend in the most recent quarter.
Disclaimer: This article is for informational purposes only and does not constitute financial, investment, or legal advice.
Next Steps and Investor Access
The company’s new leadership team—co-CEOs Peter Doyle and Steven Bregman, and CFO David Arndt—will host a conference call to discuss these results on Tuesday, April 21, 2026, at 4:15 p.m. Eastern Time. The company has stated that only questions submitted via email to [email protected] by 9:00 p.m. On Monday, April 20, will be addressed during the session.
Investors can register for the webinar through the company’s official channels, and an audio replay will be made available on the FRMO website. Full condensed consolidated financial statements have been filed with the OTC Markets Group Disclosure and News Services.
The next major checkpoint for the company will be the conclusion of its fiscal year 2026, where the full-year impact of the leadership transition and the expansion of digital mining operations will be quantified in the annual filing.
We invite readers to share their thoughts on FRMO’s shift toward digital assets in the comments below.
