Galaxy Digital Balances Crypto Volatility With Helios Push

Galaxy Digital Inc. ((GLXY)) has held its Q1 earnings call. Read on for the main highlights of the call.

Galaxy Digital Inc.’s latest earnings call painted a mixed yet ultimately constructive picture for investors, as market-driven losses overshadowed steady operational progress. Management acknowledged a tough quarter for crypto prices and mark-to-market impacts, but emphasized that core businesses held up well and that early second-quarter trends are already showing meaningful improvement.

Data Center Milestones and Execution

Galaxy highlighted significant progress at its Helios AI data center campus, with the first data hall now operational and contributing to de-risking the project. Phase I remains on track to deliver roughly 133 megawatts of critical IT capacity by the end of the second quarter, while Phase II’s 260 megawatts are under active greenfield construction.

Attractive, Predictable Data Center Economics

The company underscored the appeal of its long-term data center economics, anchored by a 15-year lease with CoreWeave that provides contracted cash flows. Management noted that lease-level EBITDA margins are expected to average around 90 percent over the term, offering a powerful, less volatile revenue stream that diversifies away from direct crypto price exposure.

Digital Asset Operating Resilience

Despite a sharp selloff across digital assets in the first quarter, Galaxy’s Digital Asset segment generated $49 million of adjusted gross profit, essentially flat versus the prior quarter. Global Markets contributed $31 million, and executives stressed that Galaxy’s trading volumes held steady even as industry-wide volumes dropped roughly 20 to 25 percent.

Asset Management Growth and Client Wins

Asset Management remained a bright spot, producing $18 million of adjusted gross profit and ending the quarter with around $8 billion in assets under management. The platform attracted $69 million of net inflows and secured an additional $75 million investment mandate, while preparing to launch a new fintech hedge fund focused on the intersection of finance and blockchain.

Early Product and Infrastructure Traction

On the product front, Galaxy pointed to early traction for its GalaxyOne platform, including the launch of Solana staking at zero commission and upcoming business accounts. The firm is also pushing ahead with digital infrastructure and tokenization offerings such as wallets, custody and white-label B2B solutions, supported by a growing pipeline of institutional clients.

Liquidity and Capital Management

Galaxy ended the quarter with approximately $2.6 billion in cash and stablecoins, a level management described as essentially flat quarter over quarter. The company repurchased 3.2 million Class A shares for $65 million under its $200 million authorization, and said financing markets appear open and constructive for funding the next phase of its Helios buildout.

Strong Start to the Second Quarter

Executives signaled a notably stronger second quarter to date, with adjusted EBITDA estimated at about $90 million through late last week. This early rebound reflects both improving digital asset prices and rising client activity, giving management confidence that the headline weakness of the first quarter may prove short-lived.

Large GAAP Loss and Negative Adjusted EBITDA

Headline results for the period were firmly in the red, with a GAAP net loss of $216 million, or $0.49 per share, and firm-wide adjusted EBITDA of negative $188 million. Management attributed the bulk of this shortfall to unrealized mark-to-market losses on digital asset holdings rather than operational deterioration.

Balance Sheet Mark-to-Market Impact and Asset Decline

Total assets declined to roughly $10 billion from $11 billion at year-end, reflecting an approximate 9 percent drop driven largely by market movements. Treasury and Corporate reported an adjusted gross loss of about $140 million, while net digital assets and investments fell to around $1.4 billion, down roughly 19 percent quarter over quarter.

Sector-Wide Crypto Price Weakness and Volatility

The firm framed its performance within a challenging market backdrop, noting that the total crypto market capitalization fell around 20 to 25 percent during the quarter. Bitcoin slid toward $60,000 before rebounding into the mid-$70,000s, and management cautioned that macro uncertainties, including geopolitics and inflation, may temper the pace of monetary easing and near-term upside.

Lending Business Contraction

Galaxy’s lending book shrank as average loan balances declined approximately 20 percent versus the prior quarter, reflecting both price-driven effects and moderate client deleveraging. The roll-off of two larger loans also contributed to a temporary step-down in lending revenue, which management expects to normalize as market conditions stabilize.

Minimal Near-Term Data Center Revenue and Timing Risks

While Helios represents a key growth engine, the Data Center segment produced minimal financial contribution in the first quarter as construction and commissioning dominated activity. Management acknowledged that a portion of the roughly 1.8 gigawatts under study remains subject to ERCOT batch study timing and evolving regulatory frameworks, keeping some uncertainty around the exact pace of future capacity deployment.

Mark-to-Market Pressure on Treasury & Corporate

The Treasury and Corporate segment was the main source of the quarter’s mark-to-market drag, with concentrated losses tied to digital asset holdings and related investments. These non-cash adjustments weighed heavily on reported results, masking the more stable performance of the firm’s operating segments.

Near-Term Debt and Structural Considerations

Management highlighted a $445 million exchangeable note maturing in December 2026 as a key balance sheet consideration but emphasized that liquidity levels are ample. The company also acknowledged investor interest in a potential structural separation of the Data Center business, while stressing that no decisions have been made.

Forward Guidance and Outlook

Looking ahead, Galaxy expects data center revenues to begin ramping in the second quarter as more Helios capacity comes online and the CoreWeave lease ramps. Phase I’s 133 megawatts are slated for substantial completion by quarter-end, Phase II’s 260 megawatts aim to start delivering halls in the first half of 2027, and management anticipates securing financing soon while advancing another 830 megawatts of approved capacity and roughly 1.8 gigawatts under ERCOT review.

Galaxy’s call ultimately highlighted a company absorbing short-term market hits while investing aggressively in infrastructure and diversified revenue streams. With resilient digital asset operations, growing asset management franchises and a long-dated data center pipeline, management is betting that operational strength and improved second-quarter performance will gradually outweigh the noise of crypto volatility for long-term shareholders.