GLXY Stock Slides After Galaxy Digital Posts $85M Q2 Loss On Crypto Slump Despite First Data Center Profit

• Galaxy Digital swung to an $85 million Q2 net loss, missing expectations with adjusted EBITDA of negative $77 million.
• Crypto operations remained resilient, with Digital Assets adjusted gross profit rising 34% sequentially to $66 million.
• The data center business turned profitable for the first time, generating $20 million adjusted gross profit and $11 million adjusted EBITDA.

Galaxy Digital (GLXY) shares dropped in Wednesday morning trading after the firm reported a second-quarter (Q2) net loss of $85 million, swinging from a $31 million profit a year earlier.

The decline in price came soon after the Mike Novogratz-led firm posted adjusted loss per share of $0.09, 68% higher than analysts' expectation of a $0.28 per-share loss, according to Fiscal.ai data. The company’s total revenue stood at $8.71 billion for the second quarter, versus the $9 billion estimate of analysts, as per Fiscal.ai data.

GLXY stock was down over 14% after market’s opened and was one of the top trending tickers on Stocktwits at the time of writing. Retail sentiment around the improved to ‘neutral’ from the ‘bearish’ zone, while chatter stayed at ‘high’ levels over the past day. 

Data Centers Deliver First Profit

Galaxy’s data center segment recorded its first revenue-generating operating quarter, reporting an adjusted gross profit of $20 million and adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $11 million for the period. 

This performance was primarily driven by the company’s delivery of the full 133-megawatt core IT load at its Helios campus in West Texas under a 15-year lease to CoreWeave (CRWV). 

The company said the first phase of this project will generate approximately $80 million in quarterly rental revenue once fully operational, starting from the third quarter of this year, with a project-level adjusted EBITDA margin exceeding 90%. 

Phase II Expansion

The 260-megawatt second-phase expansion, launched in the same period, will see its data center facilities begin delivery in the second quarter of 2027. Funding for the expansion comes from the private placement of $3.5 billion in senior secured notes completed on July 28. The company also acquired three new Texas sites, pushing its total power reserve to over 5.7 gigawatts.

The firm closed the quarter with $2.7 billion in total equity and $2.5 billion in cash and stablecoins. The equity capital was divided roughly evenly between digital assets, data centers, and treasury.

Galaxy’s Crypto Business Drags Down Earnings

The operating crypto business was more resilient. Digital Assets reported $66 million in adjusted gross profit, up 34% sequentially. Trading volumes fell 7% quarter-over-quarter, versus double-digit declines industry-wide. 

Galaxy said the results showed its earnings are "becoming less dependent on the direction of digital asset prices.” Assets under management and stake declined 12% to $7.1 billion. 

How Did Retail Users React?

While the firm did incur a loss, retail traders on Stocktwits were relatively bullish. One user said the results didn’t “seem that bad”, while another user praised CEO Novogratz’s vision in the long run.

https://www.stocktwits.com/ihatemoney/message/660977704 

https://www.stocktwits.com/knobs101/message/660975349 

GLXY stock has been down over 15% this year and over 30% over the past 12 months.

Read also: Larry Lepard Says Bitcoin Is Still 'A Wild Animal' – But Institutional Buying Is Taming The Big Selloffs

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