Galaxy Digital Earnings Call: Losses Now, Scale Later

Galaxy Digital Holdings ((TSE:GLXY)) has held its Q4 earnings call. Read on for the main highlights of the call.

Galaxy Digital Balances Crypto Market Hit With Strategic Breakthroughs in Data Centers and Trading

Galaxy Digital’s latest earnings call painted a mixed but ultimately constructive picture: the firm reported a sizable GAAP net loss, hit by one‑time charges and a sharp Q4 downturn across crypto markets and trading volumes, yet management emphasized major execution wins. Record Global Markets performance, positive adjusted EBITDA, a fortified liquidity position after sizeable capital raises, and large-scale progress in its data center and asset management franchises all underpinned a tone that acknowledged near-term pain but leaned heavily on long-term growth momentum.

Massive Data Center Capacity Expansion at Helios

Galaxy highlighted a step-change in its infrastructure footprint, with the Helios campus now boasting more than 1.6 GW of approved power capacity following a fresh 830 MW ERCOT approval. Of that, 800 MW is already contracted under a long-term lease with CoreWeave, effectively de‑risking a large portion of future utilization. The first data halls for Phase 1 remain on track to be delivered in the first quarter, with the full 133 MW of critical IT capacity for Phase 1 expected online in the first half of 2026. Phase 2 site work has begun, targeting an additional 260 MW of IT capacity, while two further interconnect applications totaling roughly 1.8 GW are advancing—signaling that Galaxy is positioning Helios as a scaled, strategic compute hub for the next cycle of demand.

Global Markets Delivers Record Trading Volumes and Profit

The Global Markets business was a clear bright spot, delivering $30 million of adjusted gross profit (AGP) in Q4 and $423 million for the full year—an 88% year-over-year gain. Management underscored that the firm achieved record trading volumes in 2025, despite the challenging Q4 backdrop, and even executed one of the largest notional Bitcoin trades in digital asset history. The strong performance suggests Galaxy is gaining share and relevance as an institutional liquidity provider, with its trading engine and derivatives capabilities proving resilient even as broader market activity contracted.

Digital Assets Segment Shows Operating Momentum

Galaxy’s digital assets business—encompassing platform and on-chain activities—also delivered solid growth. The segment posted a record $5 million in adjusted gross profit in 2025, up from $3 million the prior year, roughly 67% growth. Assets on platform reached about $12 billion, and the firm grew assets under stake by $750 million over the year, indicating increasing client adoption of staking and yield-oriented solutions. While the absolute profit levels remain modest, the trajectory highlights a growing, fee-based revenue stream that is less dependent on proprietary market exposure.

Positive Adjusted EBITDA and a Steady Loan Book

Despite macro and market headwinds, Galaxy generated $34 million of adjusted EBITDA in 2025, showing that the core franchise is profitable on an adjusted basis even in a down year for crypto. The firm’s lending operation remained stable, with an average loan book of roughly $1.8 billion and continued originations. Management emphasized that collateral levels are “north of ~110%,” signaling a conservative risk posture and suggesting that credit performance remains sound despite volatility in underlying digital assets.

Liquidity Strength Bolstered by Strategic Capital Raises

Galaxy closed the year with $11.3 billion in total assets and more than $3 billion in equity capital, and notably expanded its liquidity buffer. Cash and stablecoins stood at $2.6 billion, up by about $700 million versus Q3, supported by Q4 capital raises that included a $1.3 billion exchangeable note issuance and a $325 million equity investment, yielding roughly $1.6 billion in net proceeds. Management framed these transactions as strategic moves to fund the data center build-out and broader corporate needs, while simultaneously reinforcing the balance sheet in anticipation of ongoing market volatility.

Asset Management Growth and Tokenization Initiatives

The asset management arm delivered approximately $2 billion of net inflows in 2025—around 30% organic growth—demonstrating continued investor interest in Galaxy’s investment products. The firm launched new offerings such as the Invesco Galaxy Solana ETP and announced a collaboration with State Street on a tokenized private liquidity fund, while closing the acquisition of Alluvial Finance to enter the liquid staking arena. Galaxy also reported an initial closing of a tokenized collateralized loan obligation (CLO), underscoring its push into tokenized credit and positioning the platform at the intersection of traditional finance and on‑chain infrastructure.

Galaxy One Deposit Products Gain Early Traction

Galaxy One, the company’s platform for institutional-style digital asset services, showed early momentum within just four months of launching its deposit products. Management cited strong uptake of high-yield offerings, including an 8% yield product accessible to accredited investors under the current structure. The roadmap includes product enhancements such as daily buy functionality, lower minimums, and in-app staking and custody—aimed at lowering barriers to entry and deepening wallet share among both existing and new clients.

GAAP Net Loss Driven by One-Time Items

On a GAAP basis, Galaxy reported a full-year 2025 net loss of $241 million, or $0.61 per share, with management emphasizing that much of the drag came from non-recurring factors. Approximately $160 million of one-off items weighed on results, including write-downs related to legacy Bitcoin mining assets, expenses tied to U.S. listing and corporate reorganization, and negative mark-to-market impacts on an embedded derivative. While these items do not recur every year, they highlight the cost of transitioning the business toward its current infrastructure- and capital-markets-heavy model.

Mark-to-Market Losses in Treasury and Investment Portfolio

The Treasury & corporate segment recorded an adjusted gross loss of $86 million in 2025, largely due to unrealized mark-to-market losses on digital assets and investments as crypto prices fell. These losses are accounting-driven rather than operational, reflecting the volatility inherent in holding digital assets and related investments on balance sheet. Nevertheless, they materially weighed on consolidated results and underline the earnings sensitivity to market swings in the firm’s proprietary portfolio.

Severe Q4 Market Pullback Pressures Volumes and Balances

Management detailed the extent of the Q4 downturn: the total crypto market cap fell about 10% for the year and roughly 24% in Q4 alone, while digital asset trading volumes dropped approximately 40% quarter-over-quarter. Galaxy’s own platform saw assets decline around 15% QoQ to $12 billion, and net digital assets and investments on the balance sheet ended the year at roughly $1.7 billion, down 22% versus Q3. This environment created a difficult backdrop for transaction-driven revenues and magnified the impact of mark-to-market movements, even as operational metrics like Global Markets AGP stayed strong.

Data Center Revenue Timing and Long Infrastructure Lead Times

While the data center build-out is central to Galaxy’s strategy, management was clear that it will contribute little to near-term financials. Revenue from Phase 1 of the CoreWeave lease is only expected to begin later in the first quarter of 2026, once the first data hall turns over and usage ramps, with the full 133 MW of Phase 1 critical IT capacity targeted for the first half of 2026. The recently approved additional 830 MW of capacity at Helios cannot be energized until new transmission infrastructure is built, with energization only expected in the late 2028 to early 2029 window. These extended timelines highlight the capital-intensive, long-dated nature of the data center opportunity and the dependence on external grid and transmission projects.

Debt Maturities and Liquidity Management in Focus

A key theme on the call was balance sheet discipline. Management reiterated that preserving liquidity is crucial, particularly with $445 million of exchangeable notes maturing in December 2026. The proceeds from the recent exchangeable note issuance and equity raise are earmarked for the ongoing Helios build and general corporate purposes, but leadership stressed that liquidity planning explicitly contemplates the potential repayment of those 2026 notes. Investors should expect Galaxy to remain conservative in capital deployment while it navigates both growth investments and upcoming debt obligations.

Construction and Weather Risk at Helios

The company acknowledged execution risks around its flagship data center project, noting that severe winter weather temporarily halted construction at Helios. Although Galaxy was able to remobilize quickly—with more than 1,000 subcontractors back on site within five days—the incident underscores exposure to weather and operational disruptions that could affect timelines and costs. Management framed the event as well-managed but indicative of the real-world risks inherent in large, multi-year infrastructure builds.

Crypto Price Volatility and Distribution Overhang

Galaxy also addressed broader crypto-market headwinds, highlighting continued distribution from large, long-held coin positions and isolated, very large single-seller activity as overhangs on price. Management cited macro and psychological concerns, including worries about new technological risks, as contributing to selling pressure. They described Bitcoin as trading in a wide but pressured band and cautioned that further downside remains a risk. For a firm that earns transaction and market-making revenues, this persistent volatility and selling overhang can depress volumes and client activity even as it creates occasional trading opportunities.

Forward-Looking Guidance and Strategic Priorities

Looking ahead, management guided that data center revenue will remain minimal until Phase 1 of the CoreWeave lease starts contributing later in the first quarter of 2026, with the first data hall turnover expected in Q1 and the full 133 MW Phase 1 capacity online by the first half of 2026. Helios now has more than 1.6 GW of approved power, including 800 MW contracted to CoreWeave, with two additional interconnect applications of roughly 1.8 GW moving through the queue and the newly approved 830 MW not expected to be energizable until late 2028 or early 2029. Phase 2 work is underway to add 260 MW of incremental capacity, with long-lead equipment orders already placed. On the financial side, management reiterated key balance sheet markers—$11.3 billion in total assets, over $3 billion in equity, around $2.6 billion in cash and stablecoins, and about $1.7 billion in net digital assets and investments—and signaled that the recent $1.3 billion exchangeable note and $325 million equity raise will fund data center construction and liquidity needs, including the option to repay $445 million of notes due in late 2026. The company plans to continue investing in on-chain infrastructure and product launches, leaning on the strength of its $34 million adjusted EBITDA for 2025, record $423 million Global Markets AGP, and a stable ~$1.8 billion loan book, even as it operates against the backdrop of lower Q4 volumes and reduced platform assets.

In closing, Galaxy’s earnings call underscored a business in transition: current GAAP results are weighed down by market-driven and one-time losses, yet the firm is building significant strategic assets in data centers, trading, and asset management. With record Global Markets performance, growing fee-based businesses, and a bolstered liquidity position, management is clearly betting that today’s investment and infrastructure spend will translate into stronger, more diversified earnings power once crypto markets stabilize and demand for compute and on-chain products accelerates. For investors, the story hinges on execution at Helios, disciplined balance sheet management, and the pace at which the current crypto downcycle gives way to renewed activity and pricing strength.