Galaxy Digital shares fall 13% on $85M Q2 loss
In brief
- Galaxy Digital shares fell 13% Wednesday following Q2 earnings report
- Net loss of $85 million driven by digital asset price declines
- Data center segment generated first revenue; $80 million quarterly leasing expected by Q3
- Helios project expansion underway with 260 megawatts of additional capacity
Earnings Miss Reflects Market Headwinds
Galaxy Digital shares fell more than 13% on Wednesday, trading near $19.15 during the session. The stock decline followed disclosure of the Q2 net loss, which the company attributed to depreciation in its digital asset holdings rather than operational failure. Galaxy reported a diluted and adjusted loss of $0.09 per share, underscoring the pressure from asset price volatility across the crypto market.
The company ended the quarter with $2.7 billion in total equity and $2.5 billion in cash and stablecoins, maintaining a solid balance sheet despite the headline loss. Adjusted EBITDA improved to a loss of $77 million from a loss of $188 million in Q1. More notably, adjusted gross profit swung to $43 million from a loss of $88 million, indicating operational improvements beneath the surface.
Data Centers Emerge as Growth Engine
The real story in Galaxy's results centers on its Helios data center business, which generated revenue for the first time during the quarter. The Digital Assets segment produced $66 million in adjusted gross profit, up 34% from the previous quarter, while the Data Centers segment reported $20 million in adjusted gross profit and $11 million in adjusted EBITDA.
Galaxy had delivered all 133 megawatts of critical IT load covered by the first phase of its 15 year CoreWeave lease by quarter's end. The company expects the first phase to generate approximately $80 million in quarterly leasing revenue beginning in the third quarter, representing a significant revenue driver going forward. The company is targeting a project level adjusted EBITDA margin above 90%.
Momentum continues to build on expansion. Galaxy has started construction on the second phase of Helios, which will add 260 megawatts of critical IT capacity, with initial data hall deliveries scheduled to begin in the second quarter of 2027. To fund the project, the company completed a $3.5 billion private debt offering in July. Galaxy also acquired three additional development sites in Texas, bringing its total potential power pipeline to more than 5.7 gigawatts.
The AI infrastructure pivot appears positioned to offset near-term volatility in digital assets, though execution risk remains on the aggressive expansion timeline.
