Business Context and Reporting Period
Company: Galaxy Digital Inc. (GLXY)
Filing Type: Form 10-Q (Quarterly Report)
Reporting Period: Three and six months ended June 30, 2026
Business Overview: Galaxy Digital is a diversified financial services and investment management firm focused on digital assets and high-performance computing (HPC) infrastructure. The company operates through three reportable segments: Digital Assets (trading, lending, asset management), Data Centers (AI/HPC infrastructure), and Treasury and Corporate (proprietary trading and investments). The company recently completed a reorganization of its corporate structure in May 2025 and voluntarily delisted from the Toronto Stock Exchange in March 2026 to trade solely on Nasdaq.
Key Financial Metrics
| Metric (in thousands, except per share) | Three Months Ended June 30, 2026 |
Six Months Ended June 30, 2026 |
Six Months Ended June 30, 2025 |
|---|---|---|---|
| Revenues | $8,557,336 | $18,598,780 | $21,637,761 |
| Gains / (Losses) from Operations | $134,320 | $306,101 | $274,763 |
| Total Operating Expenses | $8,839,456 | $19,287,942 | $22,137,952 |
| Net Income / (Loss) | $(85,316) | $(301,627) | $(264,740) |
| Net Income / (Loss) Attributable to Class A | $(16,188) | $(106,102) | $(95,441) |
| Diluted EPS (Class A) | $(0.09) | $(0.58) | $(0.76) |
| Cash and Cash Equivalents (Balance Sheet) | $895,744 (as of June 30, 2026) | ||
| Total Assets | $10,843,981 (as of June 30, 2026) | ||
| Total Liabilities | $8,123,873 (as of June 30, 2026) | ||
| Total Equity | $2,720,108 (as of June 30, 2026) |
Non-GAAP Metric: Adjusted EBITDA for the six months ended June 30, 2026, was $(264.8) million, compared to $(78.4) million for the same period in 2025.
Material Changes vs. Prior Period
- Revenue Decline: Total revenues decreased by 14% year-over-year for the six months ended June 30, 2026, primarily driven by a $3.0 billion decrease in digital asset sales due to lower trading volumes and decreased digital asset prices.
- Net Loss Increase: Net loss widened to $301.6 million for the six months ended June 30, 2026, compared to $264.7 million in the prior year period. This was driven by losses in investments and digital assets held in the Treasury and Corporate segment, alongside increased impairment charges.
- Impairment Charges: Impairment of digital assets increased significantly to $465.8 million for the six months ended June 30, 2026, compared to $239.9 million in the prior year. This reflects lower digital asset prices and a higher mix of assets subject to impairment testing rather than fair value accounting.
- Data Center Revenue: The company recognized $18.9 million in data center leasing revenue for the six months ended June 30, 2026, marking the commencement of revenue from its CoreWeave Phase I lease agreement. There was no comparable revenue in the prior year period.
- Digital Asset Holdings: Total digital assets decreased to $3.5 billion as of June 30, 2026, from $4.5 billion at December 31, 2025, primarily due to price declines in Bitcoin and Ether.
Guidance, Outlook, Risks, and Unusual Items
Management Commentary and Outlook:
- AI/HPC Expansion: Management continues to focus on the conversion of the Helios mining campus into AI/HPC data centers. The company has secured a 15-year lease with CoreWeave for 133 MW of critical IT load, with additional phases expected to deliver starting in Q2 2027.
- Liquidity: The company maintains a liquidity position of approximately $2.5 billion in cash and stablecoin holdings. Management believes existing cash and cash flows from operations are sufficient to support working capital requirements for at least the next 12 months, though additional financing may be required for capital expenditures related to the Helios project.
- Regulatory Environment: The company notes that the regulatory landscape for digital assets is evolving, citing the GENIUS Act (signed July 2025) and the CLARITY Act as providing increased clarity, though uncertainty remains regarding the classification of certain digital assets as securities.
Risks and Contingencies:
- Legal Proceedings: The company has accrued a legal provision of $113.8 million (undiscounted $120.0 million) related to a settlement with the New York State Attorney General regarding LUNA digital asset matters. Payments are scheduled for 2027 and 2028. A proposed class action in Ontario regarding LUNA remains in early stages.
- DeFi and Cybersecurity: Significant risks exist regarding decentralized finance (DeFi) protocols, including smart contract vulnerabilities and exploits. The company notes recent industry-wide exploits (e.g., Drift Protocol, Kelp DAO) that resulted in hundreds of millions in losses.
- Market Volatility: Operating results are highly dependent on the price and volume of digital assets. Bitcoin and Ether prices decreased significantly during the reporting period, impacting the valuation of the company's holdings.
Unusual Items:
- Reorganization Transactions: The company completed a reverse recapitalization in May 2025, resulting in the consolidation of GDH LP. This transaction eliminated the embedded derivative liability on exchangeable notes, which had previously caused significant volatility in earnings.
- Acquisitions: The company acquired Alluvial Finance (November 2025) and Meridian Labs (June 2025) to enhance its staking and blockchain development capabilities.
Investor Verification Checklist
- Impairment Methodology: Verify the specific criteria used to determine impairment for digital assets held at "lower of cost or market" versus those measured at fair value, given the significant increase in impairment charges.
- DeFi Exposure: Review the concentration of digital assets held in decentralized finance protocols (noted as $401.8 million as of June 30, 2026) and the specific protocols involved (Liquid Collective, Morpho, Kamino) to assess smart contract risk.
- Data Center Capital Expenditures: Confirm the timeline and funding status for the Helios campus conversion, including the $1.4 billion credit facility with Deutsche Bank and the subsequent $3.5 billion senior secured notes issued in July 2026.
- Legal Settlement Payments: Monitor the scheduled payments of the $120 million LUNA settlement to ensure they do not impact liquidity in 2027 and 2028.
- Exchangeable Notes: Assess the potential dilution impact of the $2.1 billion in outstanding exchangeable senior notes, which are convertible into Class A common stock.