Galaxy Digital Inc. (GLXY)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 was impacted by crypto market drawdown and Helios mining wind-down: Net loss was $295.4M and diluted EPS was $(0.86) as digital asset prices fell and a one-time $57M impairment/disposal hit for Helios mining drove losses .
• Digital Assets adjusted gross profit fell to $64.8M (−36% QoQ), while Treasury & Corporate swung to a $(392)M operating loss; Global Markets loan book averaged $874M and net interest revenue rose ~25% QoQ to ~$23M .
• Galaxy domesticated to Delaware, transitioned to U.S. GAAP, and targeted Nasdaq listing on May 16, 2025, with Q2-to-date operating income of $160–$170M and equity capital ~$2.2B as of May 12, 2025 .
• Helios AI/HPC expansion: CoreWeave exercised a Phase II option for ~260MW; combined Phase I+II critical IT load ~393MW with anticipated average annual revenue ~$900M and ~90% EBITDA margins; Phase I deliveries begin 1H26, Phase II in 2027 .
• EPS missed Wall Street consensus: Primary EPS consensus −$0.59 vs actual −$0.86; revenue comparisons to consensus are not meaningful given GAAP gross-up accounting; focus should shift to adjusted gross profit and operating metrics for performance tracking . Primary EPS consensus and revenue consensus values from S&P Global.*

What Went Well and What Went Wrong

What Went Well

• Institutional traction and U.S. listing catalyst: “For the first time, we’re going to be accessible to platforms like Robinhood... We’re a growth company... two vectors... crypto and AI” .
• Lending resilience and growth: Average loan book rose to ~$874M with net interest revenue of ~$23M (+25% QoQ), reflecting disciplined underwriting and healthy demand .
• Staking and distribution expansion: New integrations (e.g., Zodia) enable custodial clients to access Galaxy staking; a large U.S. wealth platform began offering BTCO, expanding distribution .
• AI/HPC platform scale: CoreWeave expanded to ~393MW critical IT load at Helios with ~90% EBITDA margins and ~$900M anticipated average annual revenue across phases .

What Went Wrong

• Crypto drawdown and Helios mining wind-down: Q1 net loss $(295.4)M; one-time ~$57M impairment/disposal costs from ending Helios mining .
• Trading softness and AOP declines: Digital asset trading volumes −20% QoQ; Digital Assets adjusted gross profit fell to $64.8M (−36% QoQ), with Treasury & Corporate operating loss of $(392)M primarily from balance sheet marks .
• Platform AOP contraction: Assets on platform fell to ~$7.0B (−29% QoQ) amid lower digital asset prices; Assets Under Stake fell −45% QoQ .

Financial Results

GAAP and Key Profitability

Segment Profitability

KPIs

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We’re a growth company, period. We’ve got 2 vectors right now, our crypto business and our AI business, and we see huge opportunities in both… the institutions are here now.” — Mike Novogratz, CEO .
• “Under U.S. GAAP, the notional value of purchases and sales of certain digital assets... are reported on a grossed-up basis... adjusted gross profit... provides a more meaningful reflection of our revenue and financial performance.” — Anthony Paquette, CFO .
• “Average loan book [was] roughly $870M in Q1 and delivered net interest revenue of roughly $23M, up 25% QoQ.” — Anthony Paquette, CFO .
• “CoreWeave... brings an additional 260 megawatts... we expect to generate approximately $9 billion of total incremental revenue... ~90% EBITDA margins.” — Chris Ferraro, President .

Q&A Highlights

• Project financing and capital structure: Target ~80/20 debt-to-equity for Phase I; construction-phase yields ~10–11%; expect refinancing at lower cost once stabilized; multiple avenues (project, converts, parent-level) under evaluation .
• Staking market and model: Fragmented provider landscape; Galaxy sits “in the middle” with a few billion AUS; dual channel via direct clients and custodian integrations; focus on collateralization and capital efficiency .
• Capacity expansion and tenant mix: 1.7GW under study; first 800MW tranche aligns with existing grid; aim to balance anchoring with CoreWeave and diversifying tenants over time .
• Listing and access to capital: Nasdaq listing to broaden investor base, liquidity, and potential index inclusion; management expects to raise capital opportunistically to fund growth .
• Regulatory outlook: Active bipartisan engagement; near-term legislative odds lower than expected, but medium-term constructive for market structure and stablecoins .

Estimates Context

Notes: Revenue consensus reflects net operating revenue conventions used by analysts; GAAP revenue includes grossed-up digital asset purchase/sale activity under U.S. GAAP and is not directly comparable . Values retrieved from S&P Global.*

Key Takeaways for Investors

• Near-term: Crypto beta weighed on Q1, but Q2-to-date is tracking positive operating income ($160–$170M) and higher equity capital (~$2.2B), offering potential relief for the stock as listing and financing catalysts materialize .
• Shift performance lens: Use adjusted gross profit and operating income rather than GAAP revenue to track core business momentum under gross-up accounting .
• Lending durability: Loan book and net interest revenue growth amid market softness show earnings resilience; supports diversified income streams .
• AI/HPC optionality: Helios Phase II option exercise (total ~393MW) and ~90% EBITDA margins underpin a multi-year, largely price-uncorrelated cash flow engine with ~$900M anticipated average annual revenue .
• Capital strategy: Expect project-level debt close for Phase I in weeks; parent-level capital markets (post listing) add flexibility for scaling AI/HPC footprint and potentially selective M&A .
• Distribution and product innovation: BTCO on large U.S. wealth platform; Solana staking ETF in Canada; expanding custodian integrations should support AOP recovery as prices stabilize .
• Regulatory trajectory: Despite near-term legislative hiccups, medium-term market structure/stablecoin progress remains a likely tailwind, reinforcing institutional adoption over 2025–2026 .