Galaxy Digital Posts $323M Profit as AI Expansion Gains Steam

Galaxy Digital (NASDAQ:GLXY) swung back to profit in the third quarter, posting $323 million in net income after an $85 million loss the prior quarter.

Why Galaxy’s Treasury Business Drove the Turnaround

Galaxy’s Treasury and Corporate segment generated $419 million in adjusted gross profit, compared with a $42 million loss in the second quarter. 

Management attributed the gains largely to higher valuations of its digital asset holdings and private investments, including positions in AI chip startup Etched and Solana (CRYPTO: SOL) treasury firm Forward Industries (NASDAQ:FWDI).

Here’s how the broader numbers moved:

• Adjusted gross profit: $569 million, up from $43 million.
• Adjusted EBITDA: $455 million, up from negative $77 million.
• Net income: $323 million, still below the $505 million posted a year earlier.

Why Trading and Lending Also Picked Up

Digital asset trading volumes rose 12% quarter over quarter, even as broader spot-market volumes declined. 

Galaxy’s average loan book expanded 27% to $1.8 billion, partly driven by its Galaxy Onchain Financing Rate product, launched in July, which draws on DeFi lending markets including Aave and Morpho.

Adjusted gross profit from digital assets rose to $71 million from $66 million, though the division still posted a $9 million adjusted EBITDA loss, which management said would have been profitable without a one-time accounting adjustment.

Why Data Centers Are Becoming a Bigger Piece of the Story

Galaxy’s data center business generated $79 million in adjusted gross profit, nearly four times the $20 million posted the prior quarter, with adjusted EBITDA reaching $69 million. 

The results mark the first full quarter of revenue from Galaxy’s Helios I Phase I lease in Texas, after delivering all 133 megawatts of critical IT capacity to CoreWeave by June.

CEO Mike Novogratz said on the earnings call that Galaxy expects to exit 2027 with annualized leasing revenue between $800 million and $850 million as Helios I Phase II comes online, while Galaxy’s data center power pipeline now exceeds 5.7 gigawatts. 

He also said Galaxy passed on a potential Helios II leasing deal this summer, after tightening power supplies and rising AI demand prompted the firm to reconsider the terms on offer.

"Galaxy delivered a strong third quarter, reflecting the strength of our established Digital Assets franchise, significant appreciation across our investments portfolio, and the growing contribution from our Data Centers business," Novogratz said.

What Else Investors Should Know

Combined assets under management and assets under stake reached $10.4 billion, up 46% from June. Galaxy ended September with $3 billion in equity and $4.9 billion in cash, stablecoins and Treasuries.

The board authorized a new $200 million share buyback on Oct. 26, after completing its previous $200 million authorization on Oct. 15 by repurchasing roughly 9.8 million shares.

Image: Shutterstock