Galaxy Digital (GLXY) shares closed down 14% on Wednesday after the crypto and AI infrastructure firm reported a second-quarter net loss of $85 million, driven by falling digital asset prices. The stock fell to $19.07, down from a previous close of $22.14, as revenue dropped 15% to $8.7 billion from $10.2 billion in the prior quarter. According to Fiscal.ai data, the decline came despite the company's first-ever data center profit and improved digital asset performance, with retail sentiment improving to 'neutral' from the 'bearish' zone.
The company swung to a $85 million Q2 net loss, missing expectations with adjusted EBITDA of negative $77 million. However, the adjusted loss per share of $0.09 was 68% lower than analysts' expectation of a $0.28 per-share loss, as reported by Fiscal.ai data. The company's total revenue stood at $8.71 billion for the second quarter, versus the $9 billion estimate of analysts. The company closed the quarter with $2.7 billion in total equity and $2.5 billion in cash and stablecoins, with equity capital divided roughly evenly between digital assets, data centers, and treasury. The company pointed to the depreciation of digital asset prices during the period, with its Treasury and Corporate segment posting an adjusted gross loss of $42 million.
Galaxy's digital assets operation generated $66 million in adjusted gross profit, representing a 34% quarter-on-quarter increase despite a 7% decline in trading volume. According to Fiscal.ai data, this growth demonstrates the company's ability to expand profitability in its core digital asset operations, with trading volumes falling 7% quarter-over-quarter versus double-digit declines industry-wide. The company's assets under management and stake declined 12% to $7.1 billion, while the results showed earnings are becoming less dependent on digital asset price direction. The results echo pressure seen across recent crypto earnings reports.
The company achieved a significant milestone as its data center business turned profitable for the first time, generating $20 million in adjusted gross profit and $11 million in adjusted EBITDA. As reported by Fiscal.ai data, 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 first phase of this project will generate approximately $80 million in quarterly rental revenue once fully operational, starting from the third quarter, with a project-level adjusted EBITDA margin exceeding 90%. The company expects that lease to generate roughly $80 million in quarterly revenue at margins above 90% starting in the third quarter. The company completed the first phase of power delivery at its Helios campus in Texas, supplying 133 MW of critical computing load to CoreWeave under a 15-year lease. After the quarter ended, Galaxy bought three more Texas sites, pushing its power pipeline beyond 5.7 GW.
Galaxy Digital closed a $3.5 billion private offering of senior secured notes due 2031 on July 28, through its subsidiary Galaxy Helios Data Centers II LLC, to fund construction of Helios Phase II. According to Fiscal.ai data, this pushed total debt to over $6 billion. The company acquired three new Texas sites, pushing its total power reserve to over 5.7 gigawatts. The proceeds will go back into the construction of Helios I, Phase II. Whether the AI revenue can offset the volatility of crypto trading will shape how Wall Street values crypto stocks like Galaxy in the quarters ahead.
