CaliberCos Inc. (CWD) Earnings Call Transcript

Hello, everybody, and thanks for joining us this afternoon. This is Caliber's conference call covering our financial results for the third quarter of 2025. Joining me on the line are Chris Loeffler, our Chief Executive Officer and Co-Founder, along with Jade Leung, who serves as Caliber's Chief Financial Officer. I'd like to point out that a quarterly earnings presentation is available, and it supplements what we'll be saying in today's prepared remarks. That presentation can be found under the Investor Relations tab on our website, www.caliberco.com. Once management finishes its commentary, we'll take questions from participants. I'll also remind everyone that during this call, we may share forward-looking statements involving risks and uncertainties. Terms such as believe, expect, and anticipate reflect our best estimates as of today, and we cannot guarantee that any of them will come to pass. As a result, our actual future results might differ significantly from what these statements suggest. Additional details about the company's risk factors can be found in our quarterly and annual reports, which are filed with the Securities and Exchange Commission. At this point, I'm happy to hand things over to Chris. Please go ahead.

Thanks, Ilya. Hello, everyone, and good afternoon. For Caliber, 2025 was genuinely a quarter of transformation. Over those three months, we pushed our business into digital asset investments, beginning with the rollout of our digital asset treasury, which we call our DAT strategy. That DAT is built around Chainlink's LINK token, and in our view it offers the strongest chance to put money into the infrastructure that decentralized finance rests on. Since the world of decentralized finance — often shortened to DeFi — remains unfamiliar to a lot of people, I want to spend a bit of time walking through how we see things and where the opportunity lies. When we discuss DeFi, I'll use the term digital finance as well, so it's clear what sets digital finance apart from traditional finance. One of the most energetic movements happening throughout finance is traditional finance — TradFi — migrating on-chain, which means migrating onto blockchain technology. Another way people put it is that TradFi and DeFi are converging. Through a strategic choice to enter digital asset investing, Caliber positions itself squarely at the leading edge of this global movement. It also reflects our transition away from being a pure play real estate asset management firm and toward becoming a diversified alternative asset manager, which gives our shareholders exposure to both real and digital assets. As part of that growth push, we strengthened the balance sheet by raising more than $30 million. That improved our liquidity, reduced our debt, and positioned Caliber for continued expansion. Under the new DAT, we began building a position in LINK tokens, and to the best of our knowledge, Caliber is now the first and largest LINK-focused treasury company among publicly traded US firms. We also formed the Caliber Crypto Advisory Board, or CCAB, bringing together leading experts in blockchain, capital markets, and digital infrastructure to help guide our growth in this new asset class. Caliber has always sought out the best talent and advice it can find, and as the business expands, we'll continue broadening our footprint in this new investment category. Turning to the first of three Caliber Advisory Board members, Peter Dorius delivers considerable compliance, structure, financial management, and technical know-how to Caliber on digital assets and blockchain. Blake Janover served as the CEO of one of this year's most successful digital asset treasury transformations in the public markets, with his company becoming the first DAT investing in the Solana token. And Michael Trupac has long been a member of Caliber's board, as well as the financial architect behind the public listing of Core Scientific, one of the biggest Bitcoin mining companies in the United States. On our DAT strategy, our aim is to keep growing Caliber's LINK holdings in a disciplined, measured way. At the outset, this plan is mainly about gathering LINK and staking the tokens we hold. Through staking, Caliber earns an annual yield on the tokens kept in treasury — comparable to how a cash treasury generates yearly interest. Should investors choose to buy CWD stock rather than simply holding LINK tokens themselves, our method offers them actively managed, leveraged participation in LINK's future, along with the potential to receive a higher yearly return per token than they could likely obtain on their own. Our bigger-picture plan isn't just about buying LINK and staking it to earn yield. We want to take Chainlink's infrastructure and combine it with other DeFi components to tokenize the real estate funds Caliber runs, along with the underlying properties those funds hold. Tokenizing real-world assets — and that includes private equity real estate funds like the ones Caliber builds and oversees — brings several benefits: it makes fund operations run more smoothly, gives each fund's investors better liquidity, and boosts transparency, so those investors can see exactly what they hold and how much it's worth. On top of that, it accelerates how quickly Caliber and its family of funds can raise money through tokenized offerings. Caliber is now counted among the numerous leading financial organizations throughout America that have decided to make a significant pledge toward DeFi and toward putting its assets on-chain. Over the course of only the last several months, we have observed the world's largest asset managers, along with exchanges and banks located in the United States, seize the opportunity to bring a wide array of financial instruments on-chain — among them stocks, bonds, and mutual funds. Frequently within the DeFi community, discussion moves away from putting stocks and bonds on-chain and instead turns toward doing the same with private funds and real estate. That represents the upcoming frontier for tokenization, and Caliber anticipates playing the role of innovator in that area. Our business has grown, yes, but the goal we've held all along hasn't changed: Caliber needs to deliver steady, profitable expansion and keep its yearly EBITDA margin at 25% or above. Now, regarding the real estate private equity space where Caliber operates, conditions for commercial real estate continue to get better. Asset values are clearly stabilizing, in our view, and that lays the groundwork for a cycle of opportunity spanning multiple years. It's a cycle that fits well with what Caliber does best — complicated value-add and distressed deals. With the one big beautiful bill now passed, the Opportunity Zone program has been made permanent within the US tax code, and 100% bonus depreciation has been brought back. Those provisions gave Caliber's fund strategies a significant boost, and we anticipate they will drive more fundraising and deployment across our platform. Our investment focus stays on hospitality, multi-family, and multi-tenant industrial real estate, since we think that mix gives Caliber's investor clients the strongest opportunities in today's market. Now, on financial visibility, our platform performance supplement has been refreshed through 09/30/2025. Keep in mind that this supplement leaves out consolidated assets so investors get a transparent picture of Caliber's operating business—the portion of our financials that directly drives shareholder value. At quarter's end, Caliber's estimated performance allocations—which we refer to as our carrying interest—totaled $90.5 million, up sequentially from $84.8 million. Since we published this figure in our 2024 10-K, we've kept reporting it every quarter so investors can get a clearer picture of how folding carried interest into book value changes the way Caliber's underlying net worth looks. You can find the full supplement on our website, and we'd encourage every shareholder to go through it, since it offers extra insight into our actual economic value that goes beyond what GAAP results show. Moving on to a few business updates: fundraising kept gaining strength during the third quarter, with growth in our wholesale distribution channel leading the way. Managed capital hit $506 million, rising from $498 million in 2025 and $485 million in last year's same quarter. During the third quarter, wholesale fundraising output exceeded the total for the entirety of 2024. We brought on three additional selling group partnerships, and altogether eight organizations generated revenue in that period. This positive trend demonstrates that our distribution approach is expanding effectively and puts us in a strong position for fundraising increases to carry forward through 2026. Now I'll turn to news about the assets under our management and the results our managed real estate funds have delivered. Since your time is valuable, every quarter I focus on the shifts that mattered most—both during the period and after it ended—instead of attempting a full account of each fund's every fluctuation. These developments are important to you, because as someone holding Caliber stock, the management fees and carried interest generated by the funds and assets we oversee flow through to your benefit.

Even though those underlying properties aren't something you'd hold directly, what you earn depends on how well the investors and the funds we oversee do, which means their results become our results. First, take our PURE pickleball and Paddell project at Riverwalk in Scottsdale, Arizona — once built, it will offer a top-tier pickleball and Paddell venue with 50 courts, a clubhouse providing full service, plus a fitness center that HonorHealth is sponsoring. In Q3, the joint venture we're part of signed an exclusive ten-year deal with Wolfgang Puck Catering, a unit of Compass Group, which is the biggest food service provider nationwide, covering every food and beverage operation throughout PURE's restaurants, concessions, and event spaces. Under that deal, we anticipate Compass Group bringing a substantial volume of yearly corporate event business to PURE, and when you pair that with Caliber's skilled asset management group, the project's profitability should get a real boost. On September 12, we finished and turned in our complete construction document set, and the Salt River Pima Maricopa Indian Community has accepted it for review. That's the beginning of the building permit stage — the last hurdle before vertical construction gets underway on the 186,000 square foot facility. Once permits are granted, anticipate construction lasting about fifteen months. Now for Canyon Village, our big mixed-use endeavor in North Phoenix: the team has moved ahead to working drawings, and demolition permits should come through right away. Early construction work will move forward alongside completion of the final design; we've locked in a $57 million construction loan commitment from the U.S. Department of Housing and Urban Development, or HUD, to fund Canyon's Phase one. Underwriting continues, and assuming standard closing conditions are met, we look to close in 2026. This long-term, fixed-rate financing arrangement could enhance project economics and might potentially lift returns above what's modeled in the present pro forma. Canyon sits in a spot well suited to gain from big regional investments, among them the $165 billion semiconductor plant in Phoenix from TSMC, or Taiwan Semiconductor, along with Apple's announced $100 billion US infrastructure expansion. Right next to our project, we're happy to report that the planned $800 million redevelopment of the former Metro Center Mall — now going by The Metropolitan — has entered active construction. That reinforces the area's demand drivers and sets Canyon up for long-term success. At ENCORE, we achieved steady progress on both financing and development this quarter. Last week, town council in Johnstown gave the project approval for a special improvement district, or SID, financing, which supplies roughly $14 million in infrastructure financing through bond sales. Engineering and permitting for Highway 34 are finished, and the final and civil utility construction plans have received approval. We expect the full on-site infrastructure build-out to require about fourteen months once construction starts. Caliber is still moving forward on talks with a number of national retailers regarding PAD locations, and the goal is for property sales to kick off in late 2026, once on-site improvements are substantially finished. As for Caliber Hospitality Trust, our main hotel investment vehicle, we're focused on refinancing a number of hotels within the CHT portfolio and directing that capital into property upgrades so their net operating income can grow. We're also continuing to push ahead a robust pipeline of acquisition opportunities for CHT, spanning both cash deals and tax-deferred portfolio acquisitions. We're eager to share news of these acquisitions as soon as closing schedules are locked in. All in all, the third quarter marked a turning point for Caliber. We bolstered our balance sheet by bringing in over $30 million of new capital, cut down debt, and rolled out our digital asset treasury. This expands Caliber into a diversified alternative asset manager with exposure to both real and digital markets. On the operational side, we achieved meaningful progress across our core projects, moving financings, permitting, and construction milestones forward, which sets up our funds and assets for value creation in the coming quarters. Our fundraising momentum keeps growing, fueled by the widening reach of our wholesale distribution channel and a supportive legislative backdrop for opportunity zone investing. Together, these wins build a stronger, more resilient platform featuring better liquidity, broader uses of fee income, and a clear route to sustainable profitability in 2026. With that, I'll hand things over to Jade to go through our platform financial results and share more insights into how Caliber's business is performing.

Thanks, Chris. Good afternoon, everybody. I'd like to begin by giving you an update on how things are going with strengthening Caliber's balance sheet. In Q3, we brought in roughly $30 million of gross proceeds through our Series AA as well as our newly issued Series B preferred stock, plus the common stock we issued under our e-lock and ATM programs. Our Series B is a perpetual convertible preferred, with a conversion price of $2.50 for each share. And as Q3 closed, we were holding around $10 million of cash along with $10 million in our LINK digital treasury, and we turned our negative shareholders' equity of nearly $17 million into positive shareholders' equity of $6 million. A few weeks back, we put out an announcement that we felt we had satisfied NASDAQ's listing requirement of at least $2.5 million in shareholders' equity. Our Q3 results are going to demonstrate that this is the case. The notice about delisting we received stemmed from how certain complex technical accounting conclusions were applied regarding our consolidation model, and we feel we have taken, and will keep taking, the steps needed to satisfy and stay in compliance with that requirement moving forward. Now for an update on our corporate notes. When Q3 ended, we had 194 separate unsecured notes, carrying an aggregate principal balance of roughly $31.5 million, and about $24.4 million of that is set to mature over the coming twelve months. Typically, every note carries a twelve-month term, with an option to extend it by another twelve months. After Q3 closed, we announced that Caliber's Board of Directors gave the green light to a note holder conversion program, which authorizes holders of certain of Caliber's unsecured corporate notes to swap their notes for shares of the company's Class A common stock. Under this program, note holders can convert notes in tranches, and each tranche permits up to an aggregate of $3 million to be converted. Taking part in the program is completely voluntary, and conversion prices get set in line with Nasdaq's rules for market transactions. We expect this program to meaningfully cut leverage, boost stockholders' equity, and add financial flexibility as Caliber moves toward its objective of profitability in 2026. The initial $1.9 million of voluntary conversions has already been filed with the commission. We're also still working on our corporate debt through our two preferred stock offerings, Series A and Series AA. The Series A is our private placement convertible preferred stock, through which we're able to raise as much as $15 million. As of today, we've raised about $2.4 million; when it comes to Series AA, that one is a Reg A plus offering aimed at raising as much as $20 million. Half of what the Series AA brings in is expected to go toward repaying mature corporate notes. The remaining half will fund general corporate purposes, which includes financing Caliber's growth plans. So far, we've raised approximately $3.2 million. We think these steps fit within a comprehensive strategy for sound corporate finance, and they'll assist us in handling the fulfillment of our obligations when they become payable. Now, moving on to how we performed in 2025. Platform revenue for the third quarter of 2025 came in at roughly $3.5 million, which is down 52.7% versus the equivalent quarter a year earlier. Although asset management fees grew slightly, fund management fees as a whole fell, because during that same 2024 quarter we had booked one-time revenues from launching new funds. In addition, our construction and development activities slowed considerably, by about $2.5 million relative to the same quarter the previous year; we keep finding and finalizing financing for our projects; and though the financing market has improved somewhat, the time needed to close has grown longer. Project financing we had anticipated would be finalized and ready for Q3 has been delayed into Q4, and 2026, and at that point we expect our construction and development revenues to recover. Platform expenses for Q3 totaled $5.5 million, which is 47% lower than last year's Q3 expenses of $10.4 million, mainly because of reduced operating costs tied to payroll and payroll-related expenses. Average employee headcount fell 44% between Q3 2024 and Q3 2025, reflecting our ongoing broad cost-cutting efforts to bring Caliber back to profitability. We're already observing, and will keep observing, the effects of the cost reduction work we started putting in place a year ago at this time; the way these effects show up in our performance is a platform adjusted EBITDA loss of $700,000 for the third quarter, versus platform adjusted EBITDA of $2.4 million in the same period last year. Managed capital stood at $56 million, up 4% from the quarter a year ago. I'll hand things back to Ilya now for your questions.

Operator, we're ready for questions.

We've got a question coming in from Brendan McCarthy over at Sidoti. Your line is open. Great. Hey, Chris. Hey, Jade. Thanks for fielding my questions today. I'd like to kick things off with the digital asset treasury. Chris, I believe you began by noting, you know, there's a chance for a greater yearly yield for each token, for each staked LINK token, I mean. Could you elaborate on that and how that would eventually come to pass?

Sure. I'll give that a shot. How are you, Brendan? Hope all is well. Good. Since we came into this space, we've found that LINK specifically and, you know, the token that sits behind Chainlink has perhaps a staking structure and mechanism that differs from others you may know about; so if you'll allow me the time, I'll just go through it with a bit of detail. So essentially, roughly 45 million tokens can be staked. Chainlink and the team inside the company stake most of them. And staking serves the purpose of supplying collateral value that backs the operation of the decentralized oracle network. What makes Chainlink's approach so powerful is that it allows many established players in traditional finance — names like JPMorgan Chase, Swift, S&P Global, the United States federal government, plus plenty of others who rely on Chainlink in different capacities — to connect with blockchains and public chains and to carry out transactions on-chain. To pull that off, instead of taking the approach of, fine, we'll serve as your sole data supplier, with that information flowing from just one node, which might break down or hit some kind of issue, the system relies on a decentralized set of nodes. A large number of separate node operators are the ones checking the information feeding into those kinds of flows by way of the Chainlink Oracle network. Those operators, being decentralized, are required to put up a stake — meaning they essentially must hold some quantity of collateral — so that any failure on their part to deliver data properly, or any delivery of faulty data, would expose them to potential loss. Chainlink, which is an Oracle network, depends on staking LINK tokens for its operations and for its ability to supply the services it offers to the market. In short, you can get your LINK into the staking pool through quite a few different routes, but since roughly 700 million tokens exist while just about 45 million can be staked, that leaves a fairly limited pool that any investor would be able to enter from the start. There's a community pool of approximately 5 million tokens. It's at capacity. There's also a waitlist. Suppose you purchase LINK tokens on your own, and you decide you want those tokens to produce some income instead of simply sitting there hoping they rise in value. One route is putting them into the community pool, but you have to queue up. There's a waiting period involved, and only when somebody else withdraws their tokens from that pool can yours go in. As I see it, getting a meaningful portion of your LINK staked that way would take a considerable amount of time. Alternatively, there's a method known as liquid staking, which in my view is a somewhat riskier form of staking, for several reasons I won't get into during this call. Inside the community pool, the yield comes to roughly 4.3%. What Caliber has found — as the first institutional-type public holder and investor in LINK token — is that we've received outreach from numerous top node operators throughout the Chainlink system, letting us basically stake our tokens straight with the node operator, which generates a far greater return on our investment. Our estimate puts that at approximately 8% to 10%. So the discovery here is that simply by holding a big chunk and dealing directly with a node operator, we could achieve a superior rate of return on our tokens, which strikes me as quite appealing for shareholders.

For sure. That is quite compelling, and I value that level of specificity. And I'm aware the press release noted that Caliber currently has no LINK tokens being staked, but regarding timing, could you give us any insight into when some of that staking income might start to be realized?

Yes; we are vigorously chasing those possibilities, and of course, the amount of specificity I can offer stems from actual conversations with node operators. We anticipate being in a position to make an announcement, and once a portion of our LINK is staked, we will issue public announcements so you can follow along with us.

Got it, got it. Then, on the topic of your initiative around tokenizing real estate funds as well as the interests held in those funds — I'm curious how far away we might be from actually tokenizing your assets and placing them on the blockchain. I understand this is an effort we've seen stretch across many different kinds of securities, equities among them. But I'm wondering whether you people are directing any additional CapEx toward asset tokenization at this moment, or maybe how far off that is?

Yeah. As my father used to tell me, where there's a will, there's a way. So the rationale behind creating a digital asset treasury and going with Chainlink was this: we genuinely believe it's the most undervalued play in crypto, hands down. By allocating capital to LINK tokens, what we're really doing is investing in the infrastructure that underpins digital finance. There's no need for us to bet on whether Bitcoin or Solana gets adopted more — instead, our bet is essentially on the fact that finance is going to become more and more digital going forward. We see that as a really solid, well-reasoned wager — basically buying the picks and shovels of the move from traditional finance toward digital finance. And that's with LINK. Even so, there are still unknowns on our end. Our conclusion was that launching a treasury represented the wisest path into digital finance, since doing so would attract top talent to our company. That certainly seems to be playing out. After we went public with our plans and strategy a few months back, we started forming connections with, I'd say, a remarkable group of highly capable individuals who are guiding us through these choices. What I've come to realize is that this process—which I'd assumed might take anywhere from six to twenty-four months because of how complicated it is—will likely wrap up much faster than one might expect. When it comes to putting something like a stock—a straightforward public security—onto blockchain rails, that's a simpler task than doing the same with a private fund. Still, that doesn't imply that tokenizing a private fund involves significantly greater difficulty. So at this moment, we're looking into it. My expectation is that we'll move forward on this and share updates on how it's going on a fairly regular basis. The advantages of tokenization come down to three main areas. The first is improved operations—basically, being able to operate the platform Caliber has already constructed in a way that's more efficient and, we hope, more profitable too. The second is secondary liquidity. What that means is that when someone holds a fund and that fund has been tokenized, they might choose to sell off their shares independently of whatever the fund managers decide, and that prospect could appeal to a lot of people. The third point that matters a great deal for Caliber's expansion is primary capital. When we find a project that's truly compelling — our pickleball initiative is one instance — and we think that tokenizing it, offering it, and getting it out to a broader group of investors would be appealing, we have the ability to go after it. That allows us to raise extra capital, ideally more quickly and ideally at a great price. So we see a lot of value in tokenizing funds and assets. We never entered this space claiming to be experts, and yet we seem to be attracting some very talented experts to the company.