Galaxy Digital swings to $323 million Q3 profit, authorizes new $200 million buyback

Galaxy Digital (Nasdaq: GLXY) posted third-quarter net income of $323 million, swinging back to a profit from an $85 million net loss in the second quarter. In an earnings release filed with the U.S. Securities and Exchange Commission on Oct. 27, the company said its board on Oct. 26 authorized the repurchase of up to $200 million more of its Class A common stock.

The result still fell short of the $505.1 million Galaxy earned in the same quarter last year. Net income for the first nine months was $21.1 million, compared with $240.3 million a year earlier. Adjusted earnings per share were $0.83 and diluted EPS was $0.66. Cash, stablecoins and U.S. Treasuries totaled $4.9 billion at the end of September, nearly double the level three months earlier, including $812 million in stablecoins. Total assets rose 51% to $16.4 billion from $10.8 billion in the second quarter, and total equity grew 10% to $3.0 billion.

Gains on holdings drove the swing to profit

Most of the profit came from the Treasury & Corporate segment, which manages the company's own capital. Its adjusted gross profit was $419 million, a sharp turnaround from a $42 million loss in the second quarter. Galaxy cited significant appreciation across its investments portfolio. The segment holds spot bitcoin, ether and SOL, as well as derivatives, a stake in Solana treasury company Forward Industries and private investments. Its net digital asset and investment exposure rose 48% to $1.7 billion from $1.2 billion in the second quarter.

The Digital Assets segment, which handles trading and lending, generated adjusted gross profit of $71 million but posted an adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss of $9 million. Galaxy said its trading volumes grew 12% even as broader spot market volumes declined. It had 1,763 trading counterparties, 22 more than in the second quarter. The average loan book grew 27% to $1.8 billion. The company attributed the increase to demand for its Galaxy Onchain Financing Rate (GOFR) product, alongside broader demand for financing as market conditions improved.

Combined assets under management and assets under stake reached $10.4 billion, up 46% from the prior quarter. Assets under stake alone rose 64% to $4.6 billion, while ETF assets in Galaxy-sponsored and sub-advised funds stood at $2.5 billion and alternatives at $3.3 billion. The end-of-quarter launch of the Galaxy Sharplink Onchain Yield Fund, a DeFi yield fund, brought in more than $160 million of net inflows. Galaxy also entered a multi-year agreement with BNY, which oversees more than $60 trillion in assets under custody, to support staking on BNY's Digital Asset Custody platform.

"Our strategy is centered on two significant opportunities in the global economy: the modernization of financial markets through digital assets and the expansion of AI infrastructure."

Mike Novogratz, Founder and CEO

Data center gross profit nearly quadrupled in a quarter

The Data Centers segment's adjusted gross profit reached $79 million, roughly four times the $20 million it earned in the second quarter. Adjusted EBITDA was $69 million. The quarter was the first full quarter of revenue from the lease of the 133 MW Phase I of the Helios campus in Texas to cloud provider CoreWeave. Phase II is fully financed and under construction, with data hall deliveries scheduled to begin in the second quarter of 2027. Galaxy completed a $3.5 billion offering of senior secured notes to fund its construction.

As construction continued, the segment's total assets grew to $6.8 billion from $2.5 billion in the second quarter, and its total liabilities to $5.3 billion from $1.5 billion. Quarterly capital expenditure was $757 million, and the total gross power pipeline exceeds 5.7 GW. Galaxy said it is in discussions with prospective tenants for the 830 MW of approved capacity at Helios II that is not yet under lease. Of its $3.0 billion in equity capital, about 48% is allocated to Data Centers and 33% to Digital Assets.

Another $200 million after a 9.8 million-share buyback

On Oct. 15, Galaxy completed the $200 million share repurchase program it announced in February, buying back about 9.8 million shares. The company said this year's repurchases more than offset dilution from equity-based compensation. The new authorization has no fixed expiration date, may be suspended at any time and does not obligate the company to buy the full $200 million. Purchases may be made in the open market, through privately negotiated transactions or under trading plans intended to qualify under Rule 10b5-1.