Galaxy, Founded on Cryptocurrency, is Rebuilding a Business in Texas

Galaxy Q2 Financial Report: From Cryptocurrency to Data Centers for the Next Phase?

Written by: KarenZ, Foresight News

Galaxy's Q2 financial report shows two business engines operating in different ways.

One is affected by the fluctuations in the cryptocurrency market, with falling coin prices continuing to drag down financial performance; the other extends upward from the data halls in Texas, with server installations and power delivery, and rental income gradually confirmed with capacity.

Reduced Losses of $131 Million, Own Investment Portfolio Remains Major Drag

On August 5, Galaxy Digital announced its Q2 2026 performance. The company reported a net loss of $85 million for the quarter, a reduction of $131 million from the $216 million loss in Q1; adjusted gross profit was $43 million, compared to a loss of $88 million in Q1. Adjusted EBITDA was a loss of $77 million, down from a loss of $188 million in Q1.

In simple terms, adjusted EBITDA is an operating metric derived from net profit, excluding interest, taxes, depreciation, amortization, stock-based compensation, and certain one-time items, mainly used to compare business performance across different quarters.

Looking at the individual business segments, the digital assets and data center operations contributed a combined adjusted gross profit of $86 million, with a total adjusted EBITDA of $1 million. Specifically, the digital asset business achieved an adjusted gross profit of $66 million, a 34% quarter-over-quarter increase, while adjusted EBITDA was a loss of $11 million; the data center generated an adjusted gross profit of $20 million and an adjusted EBITDA of $11 million.

The primary reason for Galaxy's overall adjusted EBITDA remaining in the loss zone is the company's own investment portfolio. The financial report categorizes this portion under the "Treasury & Corporate" segment. This can be understood as a basket of assets held by Galaxy using its own funds, including spot digital assets, derivatives, ETFs, publicly traded stocks, venture capital, private equity, and fund investments.

In Q2, this segment recorded an adjusted gross loss of $42 million and an adjusted EBITDA loss of $78 million. Galaxy stated that the main reason was unrealized losses from related digital assets and investment positions. The combined adjusted EBITDA contribution from the digital assets and data center operations was $1 million, and after including this segment, Galaxy's overall adjusted EBITDA turned into a loss of $77 million.

As of June 30, the net exposure of this investment portfolio was $1.16 billion. Among this, venture capital and fund investments accounted for $606 million, the largest portion; Bitcoin exposure was $400 million; other token exposure was $76 million; Solana exposure was $58 million; and other liquid investments were $19 million. The financial report specifically noted that Bitcoin and Solana exposures include not only spot assets but also derivatives, short positions, and other hedging positions, as well as wrapped tokens and related investment tools, so the above amounts should not be directly interpreted as the scale of spot holdings.

On the balance sheet front, as of June 30, Galaxy's total assets increased from $9.992 billion to $10.844 billion, a quarter-over-quarter growth of 9%; total equity decreased from $2.779 billion to $2.720 billion; cash and stablecoins fell from $2.605 billion to $2.459 billion. During the same period, the aforementioned net exposure of digital assets and investments decreased from $1.362 billion to $1.16 billion. These are changes in end-of-period balances and belong to different financial metrics from the quarterly net loss.

Trading Volume Declines, Yet Adjusted Gross Profit from Digital Assets Business Rises

An interesting contrast has emerged within the digital assets business.

The adjusted gross profit from global market operations increased from $31 million to $49 million, a 58% quarter-over-quarter growth; the number of trading counterparties rose from 1,691 to 1,741, with the average loan size remaining stable at around $1.4 billion. The company disclosed that its trading volume decreased by 7% quarter-over-quarter, stating that the industry-wide trading volume fell by more than double digits during the same period. What can be confirmed is that Galaxy has maintained a relative market share in a weak market, but it cannot be inferred that long-term profitability has stabilized.

The data for asset management and infrastructure solutions is more affected by coin prices. Galaxy disclosed that by the end of Q2, the total asset management scale and staked assets amounted to approximately $7.1 billion, a 12% quarter-over-quarter decline, mainly due to the drop in digital asset prices. Among these, ETF-related assets were $1.805 billion, alternative assets were $2.553 billion, and staked assets were $2.790 billion.

133MW Begins to Generate Rental Income, Helios Moves from Construction to Profit Statement

The most substantial change in Q2 occurred in West Texas. Galaxy has delivered a total power capacity of 200MW for Helios Phase 1 to CoreWeave, corresponding to 133MW of critical IT load, and completed the delivery as planned. Rental income was gradually confirmed in Q2 as capacity was delivered, making the data center division the first to generate revenue in a quarterly operating business.

Galaxy Helios Data Center Aerial View

After the completion of the delivery, Galaxy expects Helios Phase 1 to generate approximately $80 million in rental income per quarter starting from Q3 2026, with an adjusted EBITDA profit margin exceeding 90% at the project level. The lease term with CoreWeave is based on 15 years; the total critical IT load signed for the three phases is 526MW.

The company anticipates that the average annual revenue from this lease during the entire lease term will exceed $1.2 billion, with an average adjusted EBITDA profit margin expected to exceed 90% at the lease level.

This business also requires more capital. In Q2, capital expenditures for the data center amounted to $448 million, up from $354 million in Q1. By the end of the quarter, the total liabilities attributed to the data center business increased from $1.33 billion to $1.548 billion.

On July 28, Galaxy's project company completed a private placement of $3.5 billion in senior secured notes due in 2031, with the proceeds to be used for the construction of Helios Phase 2. Phase 2 plans to add 260MW of critical IT capacity, with the data hall expected to start delivering from Q2 2027.

As for the most eye-catching figure in the financial report, "over 5.7GW," it must be qualified. It refers to the potential power pipeline that Galaxy has laid out in Texas, not the capacity that has already been energized or leased. Helios currently has approved power capacity of over 1.6GW, with two additional 1GW load applications in the ERCOT interconnection process; the newly acquired Merlin, Caspian, and Selene parks have potential capacities of approximately 500MW, 700MW, and 900MW, respectively, with Merlin's initial agreement supporting about 74MW.

From Institutional OTC Predictions to On-Chain Financing Rate Products, What is Galaxy Trying to Capture?

If Helios provides longer-term rental contracts, Galaxy's digital asset business is attempting to turn institutional services into reusable products.

In Q2 and after the quarter, Galaxy launched institutional OTC prediction market trading, on-chain financing rate products (GOFR), and Galaxy Curator.

Among these, the on-chain financing rate product GOFR integrates the floating rates of on-chain lending markets such as Aave, Morpho, Spark, and Kamino into a dynamically rebalanced financing rate, with clients dealing directly with Galaxy, which handles wallet, smart contract execution, and collateral monitoring. The company promises to invest up to $100 million of its own capital as priority loss protection, but the protection scope is subject to specific terms.

Galaxy Curator is based on Morpho to build institutional treasury strategies and distribute them through Fireblocks Earn, allowing institutions to access on-chain yield products within existing approval, signature, and strategy control processes. They expand Galaxy's service boundaries but did not disclose revenue separately in this quarter's financial report, so a more accurate description is "product capability expansion" rather than "growth curve has been validated."

Compliance channels are also advancing simultaneously. In May, the New York State Department of Financial Services granted GalaxyOne Prime NY a BitLicense and remittance license, allowing it to provide regulated digital asset trading and custody services to institutions in New York State.

In August, Galaxy announced a multi-year collaboration with BNY Mellon, planning to provide staking support for BNY's digital asset custody platform and participate as a design partner in the platform's infrastructure development.

Mike Novogratz summarized Galaxy's strategy in a letter to shareholders during the same period as a convergence of two forces: the migration of financial activities to the blockchain and the ongoing development of artificial intelligence, which continues to drive demand for power, land, and data centers. This is the management's explanation of the company's direction, not the financial results themselves. The real information reflected in the Q2 report is more straightforward: cryptocurrency asset prices can still significantly impact profits and losses, the resilience of the digital asset business has improved, and the data center has begun to contribute positive adjusted EBITDA for the first time.

Thus, the challenges facing Galaxy have become more concrete. On-chain products need to convert institutional collaborations into recurring revenue, and the Texas parks need to turn potential GW into billable MW at milestones. In the financial report, one side shows the still volatile coin price curve, while the other side shows the already turning power meters. The weight of the next phase depends on whether the latter can light up one by one on time and within budget.

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