Galaxy Digital (GLXY) | The Buildout — AI Infrastructure
The Verdict
Galaxy Digital develops, owns, and operates high-power data-center campuses for AI and HPC workloads, led by the Helios site in West Texas. It also runs a digital-assets financial-services segment spanning trading, lending, asset management, staking, and tokenization. In the AI buildout, Galaxy supplies the power-ready physical capacity and contracted data halls that GPU cloud providers need; it does not sell chips, models, or AI software.
| Market Cap | — |
| Revenue (TTM) | $58.7B |
| Revenue Growth | +25.2% |
| EBITDA Margin (TTM) | 1.6% |
| Net Debt | $2.1B |
| Earnings Beats | 3 of 4 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Data Center segment produced its first real operating quarter in Q2 2026, with $20 million of adjusted gross profit and $11 million of adjusted EBITDA.
- Helios Phase 1 is fully delivered to CoreWeave: 133 MW of critical IT capacity using about 200 MW gross, all halls complete by end Q2 2026.
- The CoreWeave Helios project is funded: Phase 2 closed $3.5 billion of 5-year senior secured notes at 85% loan-to-cost, and management expects no further equity need for the full 800 gross MW.
- The development pipeline now stands at more than 5.7 GW of potential power capacity across Helios, Merlin, Caspian, and Selene.
- Digital Assets showed early decoupling: Q2 adjusted gross profit rose 34% QoQ to $66 million despite lower prices and weaker industry activity.
What We’re Watching
- Helios II's 830 MW of approved power remains unleased as of the August 5, 2026 call, with energization currently slated for late 2028.
- Texas regulatory timeline shifted: Governor Abbott directed a PUCT/ERCOT audit of data-center interconnection projects, and management no longer expects near-term Batch Zero classification communication.
- Consolidated results remain crypto-sensitive: Q2 firm-wide adjusted EBITDA was negative $77 million and Treasury & Corporate adjusted gross loss was $42 million.
- Customer concentration is unresolved: current contracted data-center revenue is concentrated with CoreWeave, and the Phase 1 end user is not named in the supplied sources.
The core infrastructure thesis is strengthening: Helios Phase 1 moved from projection to delivered, cash-generating asset, and Phase 2 is fully funded. The digital-assets segment also showed early decoupling from crypto prices. The thesis is not yet proven, because the largest unleased asset remains tenantless and consolidated profitability is still exposed to crypto mark-to-market. The open question is whether a Helios II lease and sustained digital-asset operating growth arrive before the December 2026 convertible maturity forces capital-structure decisions.
Earnings Beat
Q2 2026 was the first real operating quarter for the Data Center segment. Galaxy reported a net loss of $85 million, firm-wide adjusted gross profit of $43 million, and adjusted EBITDA of negative $77 million; Data Centers contributed $20 million of adjusted gross profit and $11 million of adjusted EBITDA.
| Metric | Q1 FY2026 | Q4 FY2025 | Q1 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $10.2B | $10.2B | $13.0B | −21.3% |
| Gross margin | 1.9% | -0.9% | 0.1% | +180bps |
| EBITDA | $73M | −$218M | −$131M | −155.3% |
| EPS | $-0.49 | $-1.03 | $-2.31 | −78.7% |
| Data Center adjusted gross profit | $20 million | $3.1 million | n/a | — |
The second quarter was transformational for Galaxy.— Michael Novogratz, August 5, 2026
Management tone: Management's tone shifted from cautious/defensive in Q4 2025 to execution-focused in Q1 2026, then to infrastructure-platform language in Q2 2026. Executives leaned on proof of delivery from Helios Phase 1 while being direct on slippage, including CLARITY timing and the still-unleased Helios II capacity.
Management Guidance
Management issued no formal consolidated guidance. Project-level guidance calls for Q3 2026 Phase I leasing revenue of approximately $80 million at a project-level adjusted EBITDA margin over 90%. Phase 2 deliveries are expected to begin in Q2 2027, with 7 of 8 halls online by end-2027 and the final hall early 2028; Phase 3 is expected online throughout 2028. Helios II energization is currently slated for late 2028.
Trajectory
The computed revenue trajectory shows deceleration, and margin trends are compressing across gross, operating, and EBITDA lines. Reported revenue is volatile and mostly a digital-asset gross-up: after $29.2 billion in Q3 FY2025, revenue fell to $10.2 billion in Q4 FY2025 and was $10.2 billion again in Q1 FY2026; gross margin was 3.1% in Q3 FY2025 versus 1.9% in Q1 FY2026. The more meaningful shift is in adjusted gross profit: Data Center adjusted gross profit rose from $3.1 million in Q1 2026 to $20 million in Q2 2026, and management guided Phase I leasing revenue to about $80 million beginning in Q3 2026.
The Model
The model projects FY+1 revenue of $46,690.0 million with EBITDA of $47 million (0.1% margin), and FY+2 revenue of $53,012.5 million with EBITDA of $371 million (0.7% margin). The near-term top line inherits the digital-asset gross-up profile, while EBITDA remains near breakeven as data-center contributions are still small relative to crypto mark-to-market swings. FY+2 EBITDA strengthens modestly, consistent with a larger share of contracted data-hall revenue.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $61.5B | $46.7B | $53.0B |
| YoY Growth | — | −24.1% | +13.5% |
| EBITDA | $729M | $47M | $371M |
| EBITDA Margin | 1.2% | 0.1% | 0.7% |
Projections are the median of 4 independent model runs. The model’s revenue sits 8.7% below analyst consensus.
Management issued no formal consolidated guidance. Project-level guidance calls for Q3 2026 Phase I leasing revenue of approximately $80 million at a project-level adjusted EBITDA margin over 90%. Phase 2 deliveries are expected to begin in Q2 2027, with 7 of 8 halls online by end-2027 and the final hall early 2028; Phase 3 is expected online throughout 2028. Helios II energization is currently slated for late 2028.
What Could Go Right — and Wrong
- Helios II signs a lease with a creditworthy or credit-wrapped tenant, converting the 830 MW approved asset into contracted future revenue.
- Phase 2 and Phase 3 deliver on schedule and on budget, with first Phase 2 deliveries in Q2 2027 and Phase 3 online through 2028.
- ERCOT Batch Zero classifications favor Helios III, Caspian, and Selene, materially enlarging the buildable pipeline.
- Digital Assets continues to grow adjusted gross profit without rising crypto prices, extending the Q2 34% QoQ segment improvement.
- BNY and similar digital-infrastructure engagements scale into visible recurring revenue.
- Crypto mark-to-market continues to dominate consolidated results, keeping firm-wide adjusted EBITDA negative as it was at -$77 million in Q2 2026.
- Helios II remains unleased for an extended period while more than $180 million of long-lead electrical equipment has already been ordered.
- An adverse ERCOT/PUCT audit outcome or stricter Texas interconnection rules slow or shrink the expansion pipeline.
- CoreWeave concentration or end-user credit issues directly reduce contracted data-center cash flow.
Looking Ahead
The next 12 months hinge on data-center proof and Texas regulatory outcomes. Galaxy expects Q3 2026 to show the first full-quarter Phase I leasing revenue, then Q2 2027 to begin Phase II data hall deliveries. Helios II tenanting remains a second-half 2026 process, while ERCOT Batch Zero classification is delayed by the Abbott-directed audit. On the digital-asset side, CLARITY Act timing and possible SEC or CFTC rulemaking are the main policy watchpoints.
- Q3 2026Phase I first full-quarter revenue — Tests guided ~$80M leasing revenue and >90% project-level adjusted EBITDA margin.
- H2 2026Helios II tenant discussions — Management previously framed the 830 MW tenanting process as likely second-half 2026.
- September 2026CLARITY Act possible movement — Novogratz said 'It's late'; possible September path with SEC/CFTC rulemaking fallback.
- December 2026Convertible notes mature — Source references $445M exchangeable notes maturing December 2026; repayment or refinancing uncertain.
- Q2 2027Phase II data hall deliveries — First deliveries expected to begin; 7 of 8 halls online by end-2027.
- Late 2028Helios II energization — Currently slated for late 2028; contingent on lease and regulatory timelines.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $43.3B | $61.5B | $58.7B | +42.1% |
| Gross Margin | 1.5% | 1.7% | 2.4% | +20bps |
| EBITDA | $275M | $729M | $1.1B | +164.9% |
| EBITDA Margin | 0.6% | 1.2% | 1.6% | +55bps |
| Net Income | $522M | −$268M | −$67M | -151.3% |
| Free Cash Flow | $140M | −$1.5B | −$1.9B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)2.4%
- EBITDA Margin (TTM)1.6%
- Net Margin (TTM)-0.1%
- ROIC18.1%
- FCF Conversion-211.2%
- SBC / Revenue0.0%
The Company
Galaxy Digital operates two segments. Digital Assets includes Global Markets—OTC spot and derivatives trading, lending, structured products, M&A advisory, and capital markets services—and Asset Management & Infrastructure Solutions, covering investment management, staking, tokenization, and the GalaxyOne retail platform. Data Centers develops and operates HPC/AI data center infrastructure, led by the Helios campus in the panhandle region of West Texas. The 10-K frames the company as focused on digital assets and HPC, aiming to meet rising demand for reliable power and scalable compute driven by accelerated AI growth.
Operationally, Galaxy is a developer-owner of power-ready data centers rather than a chip or model provider. Principal offices are at 300 Vesey Street in New York, approximately 45,927 square feet, with additional offices in Dallas, London, Hong Kong, Israel, and the Bahamas. On the data-center side, Galaxy uses general contractors—Clayco for Phase 1 and HITT Contracting for Phase 2—and manages a pipeline from Helios to three new Texas campuses, Merlin, Caspian, and Selene.
Business Segments
Competitive Landscape
Galaxy's data-center competition is narrow in the supplied sources: CoreWeave is listed as a competitor in one 10-K supply record, even though it is also the contracted Helios lease customer. In digital assets, management acknowledged JPMorgan and others will eventually trade Bitcoin derivatives.
- CoreWeaveListed as a competitor in one 10-K supply record; also the contracted Helios lease customer.
- JPMorganManagement acknowledged JPMorgan will eventually trade Bitcoin derivatives, making parts of the trading business more difficult.
Supply Chain
Galaxy sits as a developer-owner of power-ready HPC capacity in Texas, with CoreWeave as the contracted data-center customer and ERCOT/PUCT as the grid-interconnection gatekeeper. No neighbor transcript in the supplied set named Galaxy directly.
More on GLXY: Earnings recap