- Galaxy Digital reported third-quarter revenue of $8.06 billion, above the $7.8 billion analyst estimate, though down from a year earlier. Net income was $323 million, or 66 cents a share, down about 36% from the year-ago period, and earnings also beat expectations.
- The data center business generated adjusted gross profit of $79 million and adjusted EBITDA of $69 million as Galaxy energized more capacity under its contract with CoreWeave. Galaxy is converting its Bitcoin mining assets into data centers that support AI applications under a multibillion-dollar deal.
- Galaxy shares rose about 8% in premarket trading but are down about 30% this year, as a prolonged crypto rout has hit public crypto companies. Its businesses span trading, asset management and brokerage, leaving it exposed to swings in digital-asset prices.
- Concern over AI infrastructure spending is another headwind, as anchor tenant CoreWeave faces skepticism and waning demand for its debt. BTIG, which rates Galaxy a buy, flagged energization delays, counterparty risk and lower crypto prices hitting collateral and balance-sheet values as company-specific risks.
What Happened?
Galaxy Digital, the crypto financial services firm founded and run by billionaire Michael Novogratz, reported higher-than-expected third-quarter revenue and earnings on Tuesday. Revenue was $8.06 billion against a $7.8 billion Bloomberg survey estimate, and net income was $323 million, or 66 cents a share. The data center segment contributed $79 million of adjusted gross profit and $69 million of adjusted EBITDA as Galaxy continued to energize operations for CoreWeave.
Why It Matters?
Galaxy is becoming a hybrid of a crypto firm and an AI infrastructure landlord, and the data center numbers show that second business starting to produce steady earnings. That diversification matters while crypto prices and trading activity weigh on its core businesses and shares. It also concentrates risk in a single large tenant, CoreWeave, whose own funding conditions have tightened.
What’s Next?
Investors will watch the pace at which Galaxy energizes the remaining CoreWeave capacity, since BTIG flags delays as a key risk. The direction of crypto prices will drive both its trading results and the value of digital assets on its balance sheet. Any change in CoreWeave’s ability to raise debt would feed directly into how the market values Galaxy’s data center pivot.
Affected Tickers and Coins: GLXY, CRWV, BTC
Source: Bloomberg
