Galaxy founder and CEO Michael Novogratz at RISE in Hong Kong in July 2018. Photo: Seb Daly / RISE via Sportsfile, Wikimedia Commons, CC BY 2.0. Resized.
Galaxy Digital returned to profit in the third quarter as gains in its investment portfolio combined with a larger contribution from the company’s expanding artificial-intelligence data-center business.
The company reported $323 million in net income Tuesday, compared with an $85 million loss in the second quarter. Diluted earnings were 66 cents a share, according to its results announcement.
The figures show how Galaxy is trying to build a second source of earnings alongside its digital-asset trading and investment operations. Its Helios campus in Texas is now hosting AI computing for CoreWeave, bringing a business tied to long-term infrastructure into a company still exposed to swings in cryptocurrency and investment values.
Investment gains drive much of the rebound
The company’s treasury and corporate segment produced $419 million in adjusted gross profit, compared with a $42 million adjusted gross loss in the preceding quarter. That was the largest contribution among Galaxy’s three reporting segments. Chief Executive Mike Novogratz cited significant appreciation in the investment portfolio as one reason for the stronger results.
The digital-assets segment generated $71 million in adjusted gross profit, up from $66 million in the second quarter. It still recorded a $9 million adjusted loss before interest, taxes, depreciation and amortization, compared with an $11 million loss on that measure in the prior quarter.
Trading volumes rose 12% from the second quarter, Galaxy said. Its average loan book reached $1.8 billion, up 27%, while combined assets under management and assets under stake reached $10.4 billion. The latter figure includes assets committed to blockchain transaction validation, and should not be read as ordinary cash deposits.
AI data centers add earnings, and construction costs
Data centers produced $79 million in adjusted gross profit, up from $20 million in the second quarter. The segment’s adjusted earnings before interest, taxes, depreciation and amortization increased to $69 million from $11 million.
This was the first full quarter of revenue-generating operations under the first-phase Helios lease. Galaxy had delivered all 133 megawatts of critical computing load to CoreWeave by the end of the second quarter.
The expansion also requires substantial spending. Quarterly data-center capital expenditure rose to $757 million from $448 million. Segment liabilities reached $5.3 billion, compared with $1.5 billion at the end of June. Galaxy completed a $3.5 billion senior secured note offering to finance the second phase of Helios I.
That phase is fully financed and under construction, the company said, with data-hall deliveries scheduled to begin in the second quarter of 2027. An additional 830 megawatts of approved capacity at Helios II is not yet leased; discussions with prospective tenants are not completed customer agreements.
Adjusted gross profit and adjusted earnings are company-defined, non-GAAP measures. They exclude certain costs and are not substitutes for net income. Galaxy also described the results information as preliminary and subject to normal quarterly accounting adjustments.
The board authorized another $200 million of share repurchases after the previous $200 million program was completed on October 15. The new authorization does not require Galaxy to buy shares and can be suspended or discontinued.
JBizNews Desk | New York
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