Galaxy Digital (GLXY) | The Buildout — AI Infrastructure
The Verdict
Galaxy Digital develops data-center campuses and leases the powered space inside them to AI and high-performance-computing tenants, and it runs an institutional digital-asset franchise alongside that. The AI-linked piece is Galaxy Power: the Helios campus in West Texas, where Galaxy originates land and grid interconnection, procures the long-lead electrical equipment, builds the halls and hands over critical IT capacity under long-term leases. The tenant supplies the GPUs; Galaxy supplies the power, the building and the schedule. Management describes the company as building at both ends of one theme — the financial rails on one side and the power and compute on the other.
| Market Cap | — |
| Revenue (TTM) | $58.4B |
| Revenue Growth | +23.9% |
| EBITDA Margin (TTM) | 0.9% |
| Net Debt | $1.7B |
| Earnings Beats | 3 of 4 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Data Centers produced $20M of adjusted gross profit and $11M of adjusted EBITDA in Q2 2026 — the segment's first quarter with real operating results, after management called Q1 2026 "de minimis."
- Helios Phase I was delivered to CoreWeave on schedule and on budget, with the first 133 MW of critical IT under a 15-year lease at about 90% average lease-level EBITDA margins.
- Phase II is fully funded: $3.5B of five-year senior secured notes closed July 28, 2026 at 85% loan-to-cost, and management says it has no equity need to complete the 800 gross MW CoreWeave project.
- Total potential power capacity grew to more than 5.7 GW after adding Merlin, Caspian and Selene, and five Texas projects received conditional ERCOT Batch Zero classifications covering about 4.2 GW.
- Digital Assets adjusted gross profit rose 34% quarter-over-quarter to $66M into a down market, which management cites as evidence of decoupling from crypto prices.
What We’re Watching
- 830 MW of approved Helios II capacity has no tenant signed; energization is slated for late 2028, and management says tenants are asking for 2026 power.
- ERCOT Batch Zero classifications are conditional, not final, after Governor Abbott's audit directive pushed communication off the near-term calendar.
- Firm-wide results still swing on digital-asset marks: Q2 2026 carried a GAAP net loss of $85M and adjusted EBITDA of negative $77M, after a Q1 call figure of about $90M of quarter-to-date adjusted EBITDA did not hold.
- A live legal overhang: on 2026-08-31 the Ontario Superior Court granted leave to commence a secondary-market misrepresentation claim against Galaxy Digital Holdings Ltd. (the predecessor company) and certified it as a class proceeding, naming Novogratz and Ioffe; details of the alleged misrepresentations are not in the source material.
The infrastructure thesis is strengthening while the consolidated earnings picture stays unresolved. Phase I went from construction to cash generation, Phase II is financed at 85% loan-to-cost, and the development pipeline grew to more than 5.7 GW. At the same time the largest approved slug of capacity has no tenant, the ERCOT classifications are conditional rather than final, and firm-wide results still move with digital-asset marks. The open question is whether Galaxy signs a lease on the 830 MW Helios II campus, and whether contracted data-center cash flow is enough to steady the consolidated numbers before that capacity energizes in late 2028.
Earnings Beat
Galaxy reported $8.71B of revenue in Q2 2026, down from $10.21B in the prior quarter, at a 2.6% gross margin. EBITDA on the audited basis was negative $119.8M. The standout was the Data Centers segment's first real operating quarter — $20M of adjusted gross profit and $11M of adjusted EBITDA as Helios Phase I came online for CoreWeave.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $8.7B | $10.2B | $9.1B | −3.8% |
| Gross margin | 2.6% | 1.9% | 4.6% | -200bps |
| EBITDA | −$120M | $73M | $315M | −138.1% |
| EPS | $-0.09 | $-0.49 | $0.10 | −191.6% |
| Data Centers adjusted gross profit | $20M | de minimis (Q1 2026) | n/a | — |
| Digital Assets adjusted gross profit | $66M | $49M | n/a | — |
The economy is increasingly running on code. Finance is moving Onchain and AI is remaking every industry. Both run on infrastructure, the financial rails on one side, the power and compute on the other. Galaxy is one of the few companies building at both ends of it today.— Mike Novogratz, Founder and CEO, 2026-08-05
Management tone: The tone moved from promise to proof between the two calls in the window. In Q1 2026 management pointed at delivery — "the lights are on at the Helios campus." On the Q2 2026 call it framed results as operating income, describing the quarter as "the start of a real shift in our earnings profile," and was direct about what is not resolved: it said the top gating factor on the 830 MW is Helios II's late-2028 energization schedule, and acknowledged the CLARITY Act timeline had slipped. It also declined to claim early success on decoupling, saying it would not declare any kind of victory for at least two to three more quarters.
Management Guidance
Management guided Helios Phase I to produce its first full quarter of leasing revenue of approximately $80M in Q3 2026 at a project-level adjusted EBITDA margin over 90%. Phase II deliveries are expected to begin in Q2 2027, with 7 of 8 data halls online by the end of 2027 and the final hall in early 2028, and Phase III online throughout 2028. Merlin's initial 74 MW is guided to energize in 2028. Management said data-center CapEx should continue increasing alongside construction, that there is no equity need to complete the 800 gross MW CoreWeave project, and that Phase III is equity prefunded with a final Phase III debt financing to come.
Trajectory
Galaxy's reported revenue is still the digital-asset book and swings hard: $29.2B in the September 2025 quarter, $10.2B in December 2025, $10.2B in March 2026 and $8.7B in June 2026. TTM EBITDA is $498.9M, or 0.9% of revenue, and the computed signals read revenue as decelerating with gross, operating and EBITDA margins compressing. The balance sheet at June 30, 2026 carried $3.26B of total debt against $1.55B of cash and short-term investments. The driver that is changing is the data-center segment, where CapEx rose from $354M in Q1 2026 to $448M in Q2 2026 as Phase I came online and Phase II construction began, with Phase I guided to a full quarter of leasing revenue from Q3 2026.
The Model
The model's locked projections put FY+1 revenue at $36,254M with EBITDA of negative $218M (−0.6%), and FY+2 revenue at $38,900M with EBITDA of $323M (0.83%). The near term is anchored by the businesses that exist today — the digital-asset franchise and Helios Phase I's guided leasing revenue. The FY+2 swing to positive EBITDA depends on contracted data-center capacity ramping: Phase II deliveries are guided to begin in Q2 2027 and Phase III to come online throughout 2028.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $61.5B | $36.3B | $38.9B |
| YoY Growth | — | −41.0% | +7.3% |
| EBITDA | $729M | −$218M | $323M |
| EBITDA Margin | 1.2% | -0.6% | 0.8% |
Projections are the median of 5 independent model runs. The model’s revenue sits 33.8% below analyst consensus.
Management guided Helios Phase I to produce its first full quarter of leasing revenue of approximately $80M in Q3 2026 at a project-level adjusted EBITDA margin over 90%. Phase II deliveries are expected to begin in Q2 2027, with 7 of 8 data halls online by the end of 2027 and the final hall in early 2028, and Phase III online throughout 2028. Merlin's initial 74 MW is guided to energize in 2028. Management said data-center CapEx should continue increasing alongside construction, that there is no equity need to complete the 800 gross MW CoreWeave project, and that Phase III is equity prefunded with a final Phase III debt financing to come.
What Could Go Right — and Wrong
- A signed lease on the 830 MW Helios II campus converts approved but unleased capacity into contracted revenue.
- Final — not conditional — ERCOT Batch Zero classifications for the Texas portfolio firm up energization dates for Helios III, Caspian and Selene.
- Helios Phase I runs at the guided ~$80M per quarter at over 90% project-level adjusted EBITDA margin from Q3 2026 onward.
- Phase II delivers on the refined schedule — a Q2 2027 start with 7 of 8 halls online by end-2027 — with HITT as general contractor.
- The institutional digital-asset build-out (BNY, Morgan Stanley, BlackRock, Bank Leumi) converts into fee revenue at a scale management has not quantified.
- The 830 MW stays unleased as Helios II energization approaches in late 2028, leaving the largest approved slug of capacity without revenue.
- Digital-asset marks keep swinging the consolidated result, as in Q2 2026 when a GAAP net loss of $85M and firm-wide adjusted EBITDA of negative $77M were driven by asset depreciation.
- Phase II construction slips or costs rise — it is double Phase I's size on a similar timeline, with a new general contractor.
- The ERCOT audit of data-center interconnection applicants further delays Batch Zero and pushes the whole pipeline right.
- Customer concentration: CoreWeave is the anchor tenant across Helios Phase I, and the 10-K also lists CoreWeave as a competitor.
Looking Ahead
Over the next twelve months the story is Phase II construction and the search for a tenant on the 830 MW. Phase I's guided quarterly leasing revenue begins in Q3 2026 and tests whether contracted data-center cash flow can offset the marks on the digital-asset book. Phase II halls start delivering in Q2 2027 and Phase III is scheduled through 2028, while ERCOT's audit of interconnection applicants holds up final classifications for Helios III, Caspian and Selene. Management has also said the question of separating the data-center business is a debate for around the end of the year.
- Q3 2026Phase I first full quarter — Guided to ~$80M of leasing revenue at a >90% project-level adjusted EBITDA margin
- December 2026Exchangeable notes mature — $445M of exchangeable notes come due
- H2 2026Galaxy Ventures next vintage — Management expects the '26 vintage to be larger than the prior one
- Around end of 2026Data-center separation debate — Management said the debate is around the end of the year; no Q2 update
- Q2 2027Phase II deliveries begin — 8 data halls; 7 online by end-2027, final hall in early 2028
- 2028Phase III and Merlin energization — Phase III online through 2028; Merlin's initial 74 MW in 2028
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $43.3B | $61.5B | $58.4B | +42.1% |
| Gross Margin | 1.5% | 1.7% | 2.1% | +20bps |
| EBITDA | $275M | $729M | $499M | +164.9% |
| EBITDA Margin | 0.6% | 1.2% | 0.9% | +55bps |
| Net Income | $522M | −$268M | −$99M | -151.3% |
| Free Cash Flow | $190M | −$1.5B | −$1.7B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)2.1%
- EBITDA Margin (TTM)0.9%
- Net Margin (TTM)-0.2%
- ROIC10.5%
- FCF Conversion-349.0%
- SBC / Revenue0.0%
The Company
Galaxy Digital reports two segments. Digital Assets covers over-the-counter spot and derivatives trading, lending, structured products, M&A advisory and capital markets through Global Markets, plus investment management and blockchain infrastructure products through Asset Management & Infrastructure Solutions, and the retail platform GalaxyOne launched in October 2025. Data Centers, or Galaxy Power, develops HPC data-center infrastructure and leases powered capacity. The AI-relevant half is the smaller one today, but it is the one whose economics are moving fastest — from "de minimis" results in Q1 2026 to its first real operating quarter in Q2 2026.
On the data-center side Galaxy develops rather than merely owning: it originates land and grid interconnection, procures long-lead electrical equipment, hires the general contractors and manages construction. The 10-K lists the Helios campus in the panhandle region of West Texas among its primary properties, alongside offices in New York, Dallas, London, Hong Kong, Israel and the Bahamas. Data-center CapEx ran $354M in Q1 2026 and $448M in Q2 2026, more than $180M is committed to main power transformers and switchgear, and the segment held about $2.5B of assets against $1.5B of liabilities at the end of Q2 2026.
Business Segments
Competitive Landscape
The competitive read in the source is that AI data-center demand is capacity-gated, not demand-gated: CoreWeave said its near-term capacity remains effectively sold out, and peers describe demand exceeding supply for years, which makes the race about bringing power online first. Galaxy's own stated gating factor is timing — the 830 MW of approved Helios II capacity is not slated to energize until late 2028, while management says tenants are focused on leasing 2026 power. The 10-K lists CoreWeave both as Galaxy's Helios Phase I customer and, separately, as a competitor providing cloud-based computing services for AI.
- CoreWeaveListed in the 10-K both as the Helios Phase I customer (133 MW of critical IT) and as a competitor: "CoreWeave provides cloud-based computing services for AI and other HPC applications."
- Bitdeer Technologies (BTDR)Listed as a competitor in the wiring file's documented peer group.
- Keel Infrastructure (KEEL)Listed as a competitor in the wiring file's documented peer group.
- Applied Digital (APLD)Spider-sourced competitor listing; not discussed in the filings or calls in the source.
- Hyperscale data-center peers (Digital Realty, Equinix, Vantage, Crusoe)Listed as hyperscale peers in spider-sourced wiring; not discussed.
Supply Chain
Galaxy sits between the grid and GPU-cloud tenants: it buys long-lead electrical equipment, secures ERCOT interconnection, builds the halls and leases powered capacity. No neighbor transcript in the source names Galaxy or Helios, so the read-through is triangulated.
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