TLDR
- Galaxy Digital stock dropped more than 13% after reporting an $85 million second-quarter net loss.
- Helios Phase I generated its first revenue and is expected to deliver $80 million quarterly from Q3.
- Digital assets adjusted gross profit rose 34% despite a 7% decline in trading volume.
- Galaxy raised $3.5 billion to fund Helios Phase II and expanded its AI pipeline to 5.7 GW.
- CEO Mike Novogratz said the Helios campus is now generating cash flow as leasing discussions continue.
Galaxy Digital (GLXY) shares fell more than 13% after the company reported second-quarter results that included an $85 million net loss. Despite weaker digital asset prices, the company posted stronger operating performance and generated revenue from its Helios data center business for the first time.
Source: KnockOutStocks
Galaxy Reports Narrower Loss as Digital Assets Business Improves
Galaxy Digital reported an $85 million net loss for the second quarter, improving from a $216 million loss in the previous quarter. The adjusted diluted loss narrowed to $0.09 per share from $0.49, beating analyst expectations of a $0.28 loss per share.
The company said weaker digital asset prices weighed on treasury and corporate results, which posted a $42 million adjusted gross loss driven by unrealized losses on digital assets and investment positions. Adjusted EBITDA also improved to a loss of $77 million compared with a $188 million loss in the first quarter.
Galaxy’s digital assets segment delivered stronger operating performance despite softer market conditions. Adjusted gross profit from the business rose 34% quarter over quarter to $66 million, even as trading volume declined by 7%.
Shares reacted negatively following the earnings release, with the stock falling more than 13% during the trading session to close near $19.07. Investors appeared to focus on the quarterly loss and the absence of additional data center lease announcements.
Helios Data Center Generates Revenue as AI Expansion Continues
Galaxy’s Helios campus in West Texas generated revenue for the first time after Phase I entered commercial operations. The business produced $20 million in adjusted gross profit and $11 million in adjusted EBITDA during the quarter after delivering 200 megawatts of gross power, including 133 megawatts of critical IT capacity, to CoreWeave under a 15-year lease.
The company expects Helios Phase I to generate approximately $80 million in quarterly leasing revenue beginning in the third quarter. CEO Mike Novogratz said, “This quarter, both sides delivered. The [Helios] campus is now generating cash flow.”
Novogratz also stated, “Crypto bear markets are the best time to build,” while noting continued institutional demand for AI and digital asset infrastructure.
Galaxy expanded its AI infrastructure pipeline by acquiring three additional development sites in Texas. The company said these projects increase its potential power capacity to more than 5.7 gigawatts.
Financing Supports Next Phase of Expansion
Galaxy recently completed a $3.5 billion private offering of senior secured notes through its subsidiary, Galaxy Helios Data Centers II LLC. The proceeds will fund construction of Helios Phase II and support continued expansion of its AI infrastructure business.
The financing increased Galaxy’s total debt to more than $6 billion. The company also said discussions continue with prospective tenants for another 830 megawatts of approved capacity at the Helios campus, although no new lease agreements were announced during the quarter.
Bloomberg previously reported that CEO Mike Novogratz expected the remaining capacity at the Texas campus to be leased before the end of the summer. Galaxy confirmed that negotiations with potential customers remain ongoing while continuing construction and site development.
The company said its operating businesses generated $86 million in adjusted gross profit and $1 million in adjusted EBITDA during the quarter. Management added that the business is becoming “less dependent on the overall direction of the market,” as AI infrastructure contributes a larger share of earnings alongside its digital asset operations.
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