H.C. Wainwright has increased its price target for Galaxy Digital (BRPHF, Financial) from C$30 to C$39, while maintaining a Buy rating for the stock. The analyst emphasizes that the company's imminent growth potential and plans for a Nasdaq listing outweigh the somewhat disappointing first-quarter performance. Galaxy Digital is seen as providing unique access to a major institutional cryptocurrency platform, offering valuable opportunities for investors.
BRPHF Key Business Developments
Release Date: May 13, 2025
- Net Loss: $295 million for Q1, primarily due to reduced value of digital asset holdings.
- Operating Expenses: $188 million, down approximately $143 million quarter over quarter.
- Equity Capital: $1.9 billion as of March 31st, including $1.1 billion in cash and net stablecoins.
- Non-Current Investments: $740 million, primarily in fund, private equity, and venture investments.
- Digital Assets Segment Adjusted Gross Profit: $65 million.
- Digital Assets Segment Operating Income: $3.5 million.
- Average Loan Book: $870 million in Q1, with net interest revenue of $23 million, up 25% quarter over quarter.
- Assets Under Management and Stake: $7 billion, a 29% decline quarter over quarter.
- Asset Management and Infrastructure Solutions Adjusted Gross Profit: $22 million, down 8% from the prior quarter.
- Data Center Segment Operating Loss: $3 million in Q1.
- Treasury and Corporate Segment Loss: $392 million, due to digital asset price decline and impairment charge.
- Net Digital Asset Exposure: $900 million, consisting of $520 million in Bitcoin, $150 million in Ether, and $240 million in other tokens.
- Q2 Preliminary Operating Income: Between $160 and $170 million as of May 12.
- Total Equity Capital as of May 12: Approximately $2.2 billion, including a one-time increase of $290 million.
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.
