Galaxy Digital Q2 FY2025 earnings call

• It's Galaxy's first earnings call as a U.S. public-listed company. July was the best month for Galaxy. Partnered with over 20 balance sheet companies, adding close to $2 billion of assets on platform. Executed a $9-plus billion Bitcoin trade. Data center company expanded with CoreWeave, buying 1 gigawatt of potential capacity around Helios site. Introduced adjusted EBITDA as a new profitability metric. Ended Q2 with $2.6 billion in equity capital, $1.2 billion in cash and stablecoins, and $2 billion in net digital assets and investments.

In the second quarter, the Digital Assets segment delivered $71 million in adjusted gross profit, up 10% quarter-over-quarter. The Treasury & Corporate segment generated $228 million in adjusted gross profit. The Data Center segment does not report financial results until Q1 2026. Firmwide adjusted EBITDA came in at $211 million. The balance sheet ended the quarter with $2.6 billion in equity capital, up over $700 million quarter-over-quarter, and $2 billion in net digital assets and investments on the balance sheet.

• Excited about looking forward to 2028, 2029, 2030. Methodical growth in data centers, focusing on building a base of high-quality assets and recurring revenue. Keeping Digital Assets and Data Center businesses under one roof for now, as long as 1 plus 1 equals more than 2.

Q: Hoping to touch on the outlook for growth of non-U.S. dollar stablecoins.

A: In the short run, no, but long-term potential is great as digital currencies replace traditional currencies and FX market moves digital.

Q: Update on expected financing cost range for project debt for Phases 1 and 2.

A: Phase 1 expected to be in line with past articulation, sub-10% stream rate, likely 10%-11% cost of capital. Phase 2 preliminary, goal is to get financed and earn right to lower cost as company produces results.

Q: Update on conversations with hyperscalers and other AI-adjacent companies.

A: CoreWeave executing the third option crystallizes opportunities. Other hyperscalers have reiterated and increased CapEx budgets, with demand extending through out years.

Q: Talk about traditional financial firms, asset managers, hedge funds and their engagement.

A: Almost every TradFi company preparing for tokenized world. TradFi hedge funds more comfortable in crypto with Bitcoin as macro asset, but still more comfortable in equities. Action in ETFs and balance sheet companies.

Q: Insight into how Galaxy was selected for the large Bitcoin mandate.

A: Built trust over years through relationships and hard work, focusing on trust with clients.

Q: Reason for slowdown in Solana Layer 1 activity and July activity.

A: Q2 was slowdown after aggressive memecoin activity, industry now focused on durable volumes tied to stablecoin payments, etc.

Q: Revenue lifecycle of treasury strategies for Galaxy.

A: Asset management fee of ~1%, staking opportunities, lending, with race to create value. Relationships span capital creation and ongoing asset management under multiyear contracts.

Q: Plan for data center growth and separating businesses.

A: Methodical growth, focusing on executing excellently and growing as a company. Keeping businesses under one roof for now as long as 1 plus 1 equals more than 2.

Q: Hurdles to convince hyperscalers to sign deals and diversification.

A: CoreWeave partnership was initial focus, but long-term plan includes diversification in end client and regional geography.

Q: Competitive environment and process of building relationships with treasury companies.

A: Tremendous opportunities, peak issuance of new companies, treasury companies bringing people into crypto tent.

Q: Meaning of investments in digital asset treasury companies.

A: Relatively small investments, primary focus is partnering with clients and using franchise to help them.

Q: Time line for ERCOT approval of additional capacity adjacent to Helios.

A: Somewhat on par with existing pipeline, layers into new switching station project.

Q: Galaxy's role in tokenization and investment banking.

A: Focused on infrastructure, hyper-focused on tokenization. Investment banking has high-quality pipeline of M&A opportunities, investing in talent and strategy for onchain capital markets.

Q: Mechanics and demand for the $9 billion notional Bitcoin trade.

A: Execution during high buying from balance sheet companies, macro story of economy and Fed supporting Bitcoin demand.