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The call presents a mixed but ultimately constructive picture: near‑term headline financials were negative due to market‑driven mark‑to‑market losses and crypto price weakness, but underlying operating businesses showed resilience and meaningful progress. The Data Center business materially de‑risked with the delivery of the first data hall and clear construction progress on Phases I and II plus attractive long‑dated contract economics. The Digital Asset operating businesses demonstrated stability (flat adjusted gross profit, asset management inflows, Galaxy volumes flat while the market fell) and early product traction, and preliminary Q2 results point to improvement. Given strong operational execution, diversified revenue prospects from Helios and infrastructure products, and improving financing dynamics, positives outweigh the market‑driven negatives in the quarter.
Management said Q2 is off to a strong start with second‑quarter‑to‑date adjusted EBITDA of approximately $90 million (through last Friday) and that Data Center revenue will begin ramping in Q2 as data halls are delivered; Helios Phase I remains on track to deliver substantially all 133 MW of critical IT capacity by the end of Q2, Phase II is a 260‑MW build with data‑hall deliveries slated to commence in H1‑2027 and financing expected in short order, 830 MW of approved incremental capacity is in active tenant discussions and an additional ~1.8 GW is progressing through ERCOT studies (ERCOT draft PGRR145 could exempt 2028 projects from restudy; Galaxy completed interconnect studies on Jan 15 and has an executed service agreement). For Q1 the company reported a GAAP net loss of $216M (‑$0.49/sh), firm‑wide adjusted EBITDA of ‑$188M, a Treasury & Corporate adjusted gross loss of ~$140M, operating expenses of ~$147M, Digital Assets adjusted gross profit of $49M (Global Markets $31M; Asset Management $18M with ~$8B AUM and $69M net inflows and a subsequent $75M mandate); balance sheet highlights include ~$10B total assets (down from $11B), ~$2.8B equity (~60% allocated to operating businesses), ~$1.4B net digital assets/investments (‑19% q/q), cash & stablecoins of ~$2.6B, a ~20% q/q decline in average loan book, 3.2M shares repurchased for $65M (basic shares ~390M), and a $445M exchangeable note maturing in December; market context: total crypto market cap fell ~20% in Q1, Bitcoin traded down to ~$60k then bounced to ~$80k (now ~$76–77k), and industry volumes were down ~20–25% while Galaxy’s volumes were flat.
Delivered first data hall at the Helios campus (operational AI data center); on track to deliver ~133 MW of Phase I critical IT capacity by end of Q2; Phase II (260 MW) under greenfield construction with deliveries starting H1 2027; placed deposits and purchase orders for long‑lead electrical infrastructure; approved additional 830 MW of front‑of‑the‑meter capacity with active tenant conversations and a further 1.8 GW pipeline under study.
CoreWeave lease provides 15‑year contracted cash flows with ~90% average lease‑level EBITDA margins (revenue ramp expected starting in Q2), offering material diversification from digital asset price correlation.
Digital Asset segment delivered $49M of adjusted gross profit, roughly flat quarter‑over‑quarter despite market weakness; Global Markets AGP $31M (up ~3% QoQ); trading volumes at Galaxy were flat while industry volumes declined ~20–25%—indicative of business resilience and client growth.
Asset Management generated $18M of adjusted gross profit, ended the quarter with ~$8B AUM, recorded $69M of net inflows in Q1, and secured a subsequent $75M investment mandate; launching a new fintech hedge fund May 1 to target conviction opportunities at the convergence of finance and blockchain.
GalaxyOne product progress (Solana staking launched at 0% commission; business accounts opening soon); continued momentum in digital infrastructure and tokenization productization (wallets, custody, white‑label B2B solutions) with an expanding institutional pipeline.
Quarter‑end cash and stablecoin balances ~ $2.6B (roughly flat QoQ); repurchased 3.2M Class A shares for $65M under a $200M authorization (share count ~390M); management reports financing markets are open and constructive for Phase II financing.
Preliminary Q2 performance shows meaningful improvement: second quarter‑to‑date adjusted EBITDA estimated at approximately $90M through last Friday, reflecting early recovery in activity and prices.
Good morning, and welcome to the Galaxy Digital First Quarter 2026 Earnings Call. Today's call is being recorded. [Operator Instructions] I would like to turn the conference over to Jonathan Goldowsky, Head of Investor Relations. Please go ahead, sir.
Good morning, and welcome to Galaxy's First Quarter 2026 Earnings Call. Before we begin, please note that our remarks, including answers to your questions, may include forward-looking statements. Actual results could differ materially from those described in these statements as a result of various factors, including those identified in the disclaimers in our earnings release or other filings, which have been filed with the U.S. Securities and Exchange Commission and on SEDAR+. Forward-looking statements speak only as of today and will not be updated. Additionally, we may discuss references to non-GAAP metrics, the reconciliations of which can also be found in our earnings release. Finally, none of the information on this call constitutes a recommendation, solicitation or offer by Galaxy or its affiliates to buy or sell any securities. With that, I'll turn it over to Mike Novogratz, Founder and CEO of Galaxy.
Yes. Good morning, everyone. Listen, first quarter crypto prices down on average of 25%, you can see our headline number, certainly, isn't what we'd like to be delivering quarter after quarter. All that said, I feel pretty good about the business right now. And so you come into this earnings call, and I thought, well, let's break it, down data centers and then crypto and give you just how I'm seeing it from the CEO perspec...