Release Date: May 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Galaxy Digital Holdings Ltd (BRPHF, Financial) has successfully transitioned to a US company, allowing it to access US capital markets and platforms like Robin Hood and eToro.
- The company has restructured its financial reporting to provide clearer visibility into its digital assets and data center segments, enhancing transparency for investors.
- Galaxy Digital Holdings Ltd (BRPHF) reported a strong equity capital position of $1.9 billion as of March 31st, including $1.1 billion in cash and net stablecoins.
- The digital assets segment generated approximately $65 million in adjusted gross profit and $3.5 million in operating income in Q1, with a stable lending business contributing significantly.
- Galaxy Digital Holdings Ltd (BRPHF) has secured key regulatory licenses, including a US swap dealer registration and UK FCA approval, expanding its global reach and institutional capabilities.
Negative Points
- Galaxy Digital Holdings Ltd (BRPHF) reported a net loss of $295 million for Q1, primarily due to the reduced value of its balance sheet digital asset holdings.
- The company experienced a significant decline in digital asset prices, with Bitcoin down 12% and Ether and Solana down between 30% and 50% during the quarter.
- Operating expenses, excluding gross debt transaction costs, were $188 million for the quarter, with a one-time $57 million impairment charge tied to the wind down of mining operations at Helios.
- The asset management and infrastructure solutions segment saw a 29% decline in assets under management and assets under stake, reflecting the pullback in crypto prices.
- Galaxy Digital Holdings Ltd (BRPHF) faces challenges in the regulatory environment, with ongoing gridlock in Washington around crypto legislation, impacting industry clarity.
Q & A Highlights
Q: Can you provide more details on the data center opportunity and potential project sizes?
A: The focus is on executing phase one and two at Helios with CoreWeave. The US is a prime location due to energy costs and land availability. While Helios is unique with potential up to 2.5 gigawatts, other projects are being considered, averaging around 500 megawatts. (Unidentified Company Representative)
Q: How does Galaxy fit into the staking market, and what is the potential for growth?
A: The staking market is fragmented, and Galaxy sits in the middle with a few billion dollars in assets under stake. The focus is on building technology and partnerships to offer staking services, with an emphasis on capital efficiency for clients. (Unidentified Company Representative)
Q: How does the NASDAQ listing benefit Galaxy's business?
A: The NASDAQ listing increases Galaxy's profile and provides access to capital markets, which is crucial for growth. It allows Galaxy to tap into the largest capital market, facilitating faster growth and enhancing counterparty confidence. (Michael Novogratz, CEO)
Q: What are Galaxy's plans for the loan business, and how do you manage risk?
A: Galaxy has a strong credit focus and aims to significantly grow the loan business. The approach involves disciplined risk management and leveraging credit expertise to extend credit to counterparties. (Michael Novogratz, CEO)
Q: Can you update us on the 1.7 gigawatts of power under study at Helios?
A: The 1.7 gigawatts are under study by ERCOT, with approvals expected in the short term. The first tranche of 800 megawatts fits into the existing grid timeline, while the rest requires additional infrastructure. (Unidentified Company Representative)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
