Q2 2025 Galaxy Digital Holdings Earnings Call
Good morning and welcome to the Galaxy. Digital second quarter 2025 earnings call.
Today's call is being recorded.
After today's presentation, there will be an opportunity to ask questions.
To ask a question, you may press star and 1 on your telephone.
withdraw your question, please press star and 2
at this time, I would like to turn the conference over to Jonathan kordovsky head of investor relations. Please go ahead sir.
Good morning and welcome to galaxies second quarter 2025 earnings call.
Before we begin, please note that our remarks including answers to your questions. May include forward-looking statements.
actual results could differ materially from those described in these statements as a result of various factors, including those identified in the disclaimers, in our earnings release or other filings, which have been filed with the US Securities and Exchange Commission and on Cedar Plus
Forward-looking statements speak only as of today and will not be updated.
Additionally, we may discuss references to non-gaap metrics, the reconciliations of which can also be found in our earnings release.
Finally none of the information on this call constitutes a recommendation solicitation or offer by Galaxy or its Affiliates to buy or sell any securities.
With that, I'll turn it over to Mike, noverr founder, and CEO of galaxy.
Yeah, good morning everyone. Um
I don't really give a weather report and this pretty darn nice here in New York. Uh, listen, this is our first earnings call after, uh, you know, being a US public listed company. So,
That's exciting. Um, Tony and Chris are going to go through the second quarter in pretty good detail. You know, I think of these things as a little strange in that.
We're always looking backwards, talking about what we did, and, you know, my job is to look forward, not just to Q3, Q4, but to 2028, 2029, 2030. From that perch,
Uh, I couldn't be more excited. Uh, July was by all accounts. The best month we've had at Galaxy, uh, all our businesses, uh, are starting to fire on full cylinders right in the asset management space. Uh,
This phenomena of balance sheet companies, you know companies raising capital in the public markets to deploy in crypto. Um
Has exploded. We've taken an approach to to be to want to service those. And so, you know we're we're partnered with over 20 of those companies uh with between Capital execution Asset Management. It is probably added close to 2 billion dollars of
Of assets on platform, right? You know recurring income you know that will go on and on and hopefully grow. Uh just literally just in the the the last short period of time.
it was fun because it
Yelled loud. And clear that there's a group of people that really trust our brand and Trust, our our discretion or execution Services, uh, we did it smoothly. Uh, the market took it it tells you how strong the market is right now. Um, that's a tremendous amount of
Of Bitcoin that the market absorbed. Um,
You know, on the data center company. I told you before I see both the data center business and the crypto business has growth businesses, uh,
We actually executed uh, and bought another 1 gigawatt. Uh,
Of potential capacity Around The Helio site. That would make that a 3 and a half gigawatt site, got to be 1 of the top 5, data centers in the world. If we get that fully built out, that's exciting. We also announced core weave executed the third option. And so now that entire 800 megawatt site, uh, will be tailor tailor built, uh, for core weave in their clients. Um,
And so again firing all cylinders I, you know, the Trump Administration is doing some amazing things for crypto.
Uh, if you have an, I would tell everyone to look at the sec's. SEC chair. Paul Atkins is speech on.
You know, putting the US financial markets in Global Financial markets on chain, that really is the big challenge for all crypto companies including Galaxy. And so, you know, when I say we're building to 2028 2029 and 2030, uh, those kind of projects really will Define us, uh, you know, in that next decade. And so we got a lot more to talk about. I think next quarter, uh, we got a lot in store, uh, but I couldn't be more bullish, uh, finally. And last I want to welcome Doug decent to our board. Uh,
You know, Doug dieson has Decades of experience across Financial Services, real estate and public markets. Uh, but most importantly for me, he's a true Texan. Uh, we have a huge investment in Texas, and Texas is going to be a big part of galaxies future, uh, Doug is well connected. Uh, his family has been there a long time, uh, and he's going to help us really navigate. Uh, any potholes in Opportunities down in Texas, as well as in DC. And so I couldn't be more excited. Uh,
It's also nice to get someone who's a little bit older than me on the board. Uh and so he's now our senior spokesman with Adam and hand it over to to Tony to talk about uh the quarter.
Great. Uh thanks Mike. And thanks everyone for joining the call today.
Is Mike mentioned, Q2 was a pivotal quarter for Galaxy and Q3 is already off to an exciting start which Chris and I will touch on a little bit more detail in a few minutes.
During Q2 we completed our domestication and reorganization in the US we listed on the on the NASDAQ. We raised nearly million dollars in common Equity capital and so I'll continue to progress on building out our operating businesses across digital assets and data centers.
From a financial perspective, we made strong progress across the business in the second quarter, generating $299 million in adjusted gross profit and saw a healthy increase in our capital and overall balance sheet.
In our operating segments, digital assets, delivered, 71 million in adjusted gross profit up. 10% quarter over quarter, reflecting continued, momentum across the core operating units.
Treasury and corporate generated 228 million in adjusted gross profit driven, primarily by Mark tomarket, gains on the digital assets and investment positions held on our balance sheet.
As a reminder.
In the data center segment. We do not expect to report Financial results until q1 of 2026. When we begin recognizing revenue from the core weave from core weave, under Phase 1 of our lease agreement, until then all expenditures are being capitalized as they directly support the preparation of the facility for operational readiness.
Also, beginning this quarter, we're introducing a new profitability metric called adjusted ebitda.
We believe this offers a clear representation of the business performance, uh, and our operating segments going forward as a reminder adjusted ebit da is a non-gaap measure and should be thought of as complimentary, not a replacement of our gaap financial metrics, a Reconciliation to gaap. Net, income is available in our earnings release for Q2, firmwide adjusted ebitda came in at 211 million.
Our total operating expenses excluding grossed up transaction costs and digital asset impairments were 133 million in Q2.
And we recorded a negative in Q2, we recorded a negative, Mark to Market, adjustment of 125 million on the embedded derivative associated with our exchangeable notes, which was driven by galaxies second quarter, stock price performance up until the date of our reorganization in mid-may.
Successful reorganization and consolidation of our reporting structure Q2 will be the last quarter that we will be impacted by this mark-to-market adjustment.
Our Q2, gaap net income was 31, 31 million.
Uh, which included this mark-to-market adjustment and Q2 Gap, operating income was 166 million.
Turning to the balance sheet, we ended the quarter with 2.6 billion in equity Capital up more than 700 million quarter over quarter.
This increase was driven by the primary Capital raise in May which generated approximately 480 million in net proceeds appreciation, and our digital assets and balance sheet Investments, and a 1-time increase of 292 million in equity Capital due to the consolidation of our corporate structure as part of the reorganization.
In accordance with accounting treatment, for reverse Acquisitions. This 292 million had no impact on net income or adjusted Evita during the quarter. But instead was credited directly to equity capital,
Cash and stable coins remain relatively flat at 1.2 billion, with cash proceeds from the May Equity, raise being used to help fund, capex related to our Helios data center build out as well as continuing to grow our balance sheet in digital assets.
We ended Q2 with approximately 2 billion dollars in net, digital assets and Investments, on our balance sheet.
As we move forward, we will continue to run our balance sheet with fortress-like principles, managing risk, with discipline and ensuring. We have enough Capital liquidity, and access to financial resources as we continue on a growth agenda across both digital assets and data centers.
now, turning to our operating business results, starting with digital assets,
our Global markets business generated, 555 million of adjusted gross profit in the quarter up from 433 million in q1,
While industry-wide spot crypto trading volumes decline by approximately 30%.
From q1, our crypto trading volumes were down 20% and the business was able to capitalize on market, dislocations and outperform the overall Market.
We continue to see increased engagement from traditional financial institutions. And today, we are tracking 1 of the strongest, institutional onboarding pipelines. We have seen today,
On the lending side, our average loan book balance exceeded 1 billion dollars for the first time passing, an important growth Milestone and we ended the quarter with roughly 1.4 billion in total loans outstanding.
From a net, interest margin perspective. We saw modest compression during the quarter and coupled with a mixed shift towards lower margin lending. Products are overall lending Revenue was down slightly quarter over quarter.
And an advisory Robin Hood's acquisition of bitstamp officially closed, which Galaxy served as the exclusive adviser to bitstamp on this transaction.
Now, turning to asset management and infrastructure solutions.
We ended the quarter with nearly 9 billion in total assets under management and assets under stake reflecting Market, appreciation and organic growth in our asset management business.
This business generated 16 million dollars in adjusted gross profit down 6 million from q1 driven by more muted revenue on the staking side, which I'll speak to in just a minute.
Asset Management saw approximately 175 million of net inflows. This quarter.
Driven by our Venture fund and treasury Management Solutions partially offset by certain ETF net, outflows amid. The market volatility early in the quarter,
On the venture side, we announced the final close of Galaxies Ventures Fund with $178 million, which will be focused on early-stage companies.
Building the infrastructure and applications powering the onchain economy. The fund, exceeded, its original Target size and has already deployed roughly 70 million dollars with several Investments supporting the growth of stablecoin, adoption and tokenization.
In infrastructure Solutions, our assets under stake, increased by more than 30% to 3.1 billion dollars in Q2.
However, this aggregate staking Revenue decline in the second quarter amid a notable drop in onchain activity across the major protocol. Ecosystems. We support
The slowdown in activity was especially pronounced on the salana network in Q2 or Galaxy is 1 of the largest infrastructure providers by stake weight.
From a distribution standpoint. We announced our integration with fireblocks in Q2
Galaxy staking services are now natively accessible to more. To more than 2,000 of the world's largest financial institutions. Making secure scalable staking available directly through a trusted custody framework. This was the third major integration in 2025 and reflects our continued. Focus on Partner Integrations to broaden, access expand distribution and open new channels from our for our customers, helping to drive organic growth in our assets on platform.
Of all sizes looking to engage in the digital asset ecosystem.
1 of these areas is me. Mike mentioned is the digital asset treasury companies, the recent pickup and activity in this space represents a cross-platform opportunity for Galaxy. Drawing on the strengths of our trading Asset Management advisory and staking businesses to deliver Integrated end-to-end Solutions.
Since kicking off our work with digital asset. Treasury companies, we've evaluated more than 100 different management opportunities. And as Mike mentioned, we are actively supporting over 20 of the most prominent players providing them with capital infrastructure, asset management and trading services.
These companies are coming together, Galaxy, because we are a trusted brand and because they see the value of working with the partner that is built for scale.
This has begun to play out in a results with more than 1.5 billion dollars in assets, brought on platform.
And over 2 billion in notional, volumes traded since the first quarter of this year.
We are focused on long-term strategic relationships to serve clients help Drive thoughtful Innovation. The in the industry and generate high-quality and sustainable business for Galaxy.
Additionally, last week, all Unity formed formerly launched their Euro stablecoin to the market. As a reminder, this project has been developed in partnership with DWS and flow Traders. And helps physician Galaxy to capitalize on this increasingly important segment of the overall digital asset Market.
Stepping back, we believe we're at a pivotal moment in the evolution of capital markets.
With the passage of the genius act and hopefully more legislation coming. We are seeing real integration between traditional finance and onchain infrastructure. As this convergence accelerates, clients will need unified platforms to access deploy and optimize their assets across both environments which will create entirely New Market opportunities.
At Galaxy, we're continuing to invest in technology research and product innovation to bring on-chain and off-chain ecosystems. You will continue to see us add products, services, and new capabilities in the quarters to come.
Before I turn it over to Chris, I want to touch on a quick a quick Q3 update.
As Mike mentioned, digital asset prices continue their upward momentum to start the quarter with Bitcoin, reaching new all-time highs in July, and ether, and salana posting strong gains in the last few weeks.
July marked the strongest monthly performance for our digital asset, operating business in the firm's history.
And as Mike mentioned, we completed the sale of over 80,000 Bitcoin on a client representing one of the largest notional Bitcoin transactions in history.
And asset management. We saw Strong net inflows and organic growth in staking assets during July.
And importantly in digital uh data centers core. We've ex has exercised its final option on phase 3 at our Helios campus. And we recently signed a purchase agreement to acquire acquire 160 Acres of adjacent land which could provide an additional 1. Gigawatt of increased power capacity, at Helios in the future with that. Let me turn it over to Chris.
Thanks Tony.
Focusing on our data center business. I'm pleased to announce that subsequent to quarter end. We expanded our partnership with core weave who exercised, its final option to access an additional 1333, megawatts of critical it load for its Ai and HPC operations at our Helios data center campus.
With this expansion core. We has now committed to the full 800 megawatts of gross power. Currently approved for at Helios
This additional capacity will be structured on terms similar to those outlined for both phases 1 and 2.
Throughout the second quarter, the team was laser focused on execution. As we continue transforming, the Helios campus into a world-class Ai and HPC campus. We're now, squarely in the build phase and I couldn't be more pleased with the pace and precision we're delivering at the site level.
From a construction perspective, we have made, meaningful progress, in retrofitting the existing building and campus.
the interior Phase 1 building has been fully demolished in preparation for the buildout of the data center, including the removal of Legacy infrastructure, including immersion, cooling systems, and the former Bitcoin mining machines
We are finalizing the agreement to sell over half of our Legacy, Bitcoin, mining machines. And that sale is expected to close by the end of Q3.
For the remaining machines, we have now signed a new hosting agreement.
Upon energization with our new hosting provider, uh, beginning in late, 2025, and into the first half of 2026 and combined with our East Texas Bitcoin mining site. We anticipate a total mining capacity of approximately 1.8 XA, hash per second.
At today's Bitcoin prices and network difficulty, we expect our mining operations to generate more than 30 million dollars in annual revenue and be an ibida positive contributor to the business.
At the Helios campus. We're working to complete the earthwork and concrete foundations for our new electrical mechanical and backup generator infrastructure.
Keeping us on track for energization.
These backup generators are a key part of our, electrical infrastructure and are designed to provide full backup power for all critical and mechanical systems for the data center.
On the electrical front, we've taken a modular approach to accelerate the deployment and commissioning of the systems by prefabrik houses, electrical houses off-site.
These electrical houses or E houses are self-contained units that house switchboards UPS systems batteries Transformers and other distribution gear.
These are being assembled off-site and multiple fabrication facilities, the first units are expected to ship later this month to the Helios campus for installation and integration with the on-site electrical infrastructure.
Our chillers begin arriving this month and will continue into Q4. These chillers will operate as part of our broader mechanical cooling infrastructure, providing chilled water to cool. The gpus
together with our coolant distribution units. The chillers provide a Next Generation cooling solution for critical. AI infrastructure,
In order to bring all these components together and execute the build. We are partnering with clayco as our general contractor operating under construction management scope for the phase 1 Project.
Cleco brings deep expertise in Mission critical infrastructure, and a strong track record that includes more than 12.7 billion dollars in advanced technology projects.
Hose expertise gives us High conviction in their ability to deliver large complex infrastructure projects, requiring tight coordination on aggressive timelines, which is exactly what we're building at the Helios campus.
They have a team of over 100 subcontractors and trade Partners who are boots on the ground at Helios. Now as we speak driving progress forward.
The combination of earthwork electrical and mechanical contractors are coming together as planned. And we remain confident in our ability to hit key delivery and construction. Milestones in the second half of 2025 and first half of 2026,
This keeps us firmly on track to deliver the 133, megawatts of critical, it capacity for Phase 1 in various tranches throughout the first half of 2026 aligned with core weeds deployment timeline.
With Phase 1 advancing towards energization. We're preparing to seamlessly transition into phase 2 Construction.
Let's shift to Capital and financing where we've made equally important progress.
We are in the very final stages of securing Phase 1 Project level debt financing.
Project level debt financing agreements for large-scale data. Center developments are inherently complex. Requiring, extensive due diligence, bespoke structuring and lengthening processes.
As such these transactions often take considerable time to finalize. Even when counterparties are highly engaged. That said, based on the strength of the asset and the structure we've developed we believe we're well positioned to close this financing imminently.
as a reminder, the equity portion of phase 1 has already been funded through our existing Equity capital
Once we have secured the project-level debt financing, we will have the capital necessary to fund the anticipated capex for Phase 1 of approximately $11 million to $13 million per megawatt.
For Phase 2. We are still finalizing the design and Engineering specifications, but expect the total project capex to be slightly higher than the phase 1 on a per megawatt basis.
We have already commenced work on Project level. Debt financing for the phase 2 project.
Throughout the phase, 1 financing processes. We've established strong relationships with a wide range of Banks and private credit managers who are active in the space and I have confidence in our ability to secure debt financing for Phase 2 in the coming months.
On the equity side, we are exploring supplementing. Our parent company Equity with project. Level Equity, financing particularly from infrastructure focused and private Equity style funds, that are actively seeking exposure to Ai and HPC data center projects.
As always our approach to Capital is opportunistic and disciplined. Once these projects are stabilized and generating Revenue, we'll look to refinance at lower cost of capital.
This opportunity is expected to unlock, uh, unlock committed Equity, allowing us to recycle Capital into future buildout while keeping our Capital stack Nimble and optimized for growth.
Finally shifting to power, we developed a healthy, origination pipeline focused on land powered land, powered, shells and built to suit data centers.
This pipeline remains a critical part of how we scale in a disciplined and capital efficient way.
Since last quarter, we've narrowed our pipeline from over 40 sites to a select set of high-quality opportunities, rigorously evaluated based on development stage, power capacity and energization timelines. We are highly selective when it comes to power land and ensuring that any project we pursue meaningfully expands our data center footprint and advances our position as a multi-asset owner and developer
we've already begun to execute on our growth objectives. Subsequent to quarter end, we entered into a definitive purchase and sale agreement to acquire 16060 acres, and a 1. Gigawatt load in your connection request, adjacent to the Helios campus.
To 3.5 gigawatts giving it the potential to become 1 of the largest AI data center campuses in the world.
It also provides us with an important plot of land adjacent to what will be 2 of the largest switching stations in Texas. Strengthening our long-term presence in the region.
With 2.7 gigawatts of total power capacity. Now, under various stages of study, we're working very closely with OT, a wet and other stakeholders to finalize, studies and approvals.
The load interconnection process for the original 1.7. Gigawatts. We submitted in 2024 has taken longer than initially anticipated. Largely due to Ott's to clean up a backlog of speculative and inactive projects that have congested the load interconnection queue.
As a result Urka and the transmission utility companies are applying greater scrutiny to new load, interconnection requests, to ensure that near-term development is anchored in real execution from our perspective. That's a positive shift and 1 that ultimately benefits. Well, capitalized credible developers like Galaxy.
We expect to have clear visibility in the back half of this year.
We have also been actively building out our data center. Team hiring key talent with deep industry expertise, including engineering and construction team members with experience at leading hyperscalers like Microsoft and Meta.
We're Full Speed Ahead on Phase 1 with construction advancing in line with our delivery schedule.
Phase 2 is ramping with both infrastructure planning lease, finalization and capital formation progressing. Well
And we'll share more on phase 3 at decisions take as decisions. Take shape. I'm incredibly encouraged by the momentum of this team has built. We've made real progress, this quarter and we're going to stay focused disciplined and execution driven, as we enter into the second half of this year. Now, back to the operator for questions. Thank you.
Thank you very much. We will now begin the question and answer session.
Anywhere wishes to ask a question, may press star and 1 on your telephone.
If you are using a speaker-phone, please pick up your handset before asking a question.
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Our first question comes from James Sierra and kma sax. Please go ahead.
For uh, taking the question. I was hoping you might be able to to touch a little bit on the outlook. For growth of non US dollar stable coins. This has been quite limited non US dollar, stable coin, growth so far. And a material portion of the US stable. US dollar stable coins are as customers want access to Dollars. Um do you expect these non US dollar stable coins to to to resemble the size of the of the, of the dollar ones? And perhaps why
You know, in the short run, most stablecoins uh,
Right now are used for liquidity in markets and that is still mostly denominated in dollars. Um, but over time, I think you're going to see the Euro stable coin and other stable coins from separate countries pick up as digital currencies start replacing you know, traditional currencies and the FX Market moves to a more digital uh place that's going to also happen with payments, you know, European payments with
1 Aiello.
I I would guess in the short run, know it's they're not going to be nearly as big, but I think long term potential is is really great.
That's really helpful. Thank you. Um, and then maybe just turning to the data centers. We've seen tightening credit spreads over the past few months. Maybe just any update on the expected financing costs range for the project debt for phases 1 and 2?
Yeah. Hey James, good morning. Thank you. Um so you know, I I think the uh, our expectation on where we where we land on Phase 1 is in line with with what we've articulated in the past. It it will it will come out at a, at a, a sub 10% stream rate. But when you take into account, sort of, you know, upfront fees and potential breakage, depending on, when you assume we'd have a refund,
We get financing closed and we start building, then we sort of earn the right to um to achieve larger financing at lower cost. And so um our goal on Phase 2 is going to be sort of twofold 1. It's for sure going to be a a larger project. Um, and so just getting that Finance, I think is, is the primary goal but also um uh the profile of our company. Both now as a public US public company, larger Equity Capital base, um uh clear line of sight to delivering stabilization on Phase 1. Um, our expectation is that should lead uh, lenders to also give us, uh, give us positive treatment on that front.
The next question comes from Patrick moldy, with Pipers Handler, please go ahead.
Yes, good morning, thanks for taking the question. I was hoping, you could just update us on your just, general conversations with hyperscalers and other AI adjacent companies. It seems like you know, with the decision to expand the footprint at Helios those conversations must be going pretty well. Um, demand seems like it remains strong across the board but any color that you can give on on how those conversations have been going to be great. Thanks.
Sure. Um, I'll I'll start so the, you know, the
The most recent, um, National, which we put out with regards to core weave ex executing the third option I think is is is the most important sign. Um, that they, you know, they signaled, their intent from the beginning to ultimately be, you know, the single Bill to suit tenant for our existing 800 megawatts. They had the option to step into that relationship over basically over the past year. And this final execution, I think, just just crystallizes at least from their end, their the opportunity said, they're seeing with their clients, um, in terms of on the demand side, um, in with, with other hyperscalers, um, obviously, we're we're not, um, continuing to acquire a pipeline of potential, uh, energy for no reason. I think the, um, uh, our partnership with core we is going to take up the vast majority of our attention over the next few years. That being said, um, the the hypers, the other hyperscalers out there are, um, uh, equally committed to Growing. I think, if you
See in their guidance, and their numbers on the capex perspective. They've, they've all, uh, not only, um, uh, reiterated, their expected cap, a capex budgets, but actually have have started to increase them as well. And so, I, I think what you're seeing publicly in terms of their announcements is very consistent with, um, with the conversations that that we're having, uh, with them. Um, and so, the other thing, you're, you're, we, we are seeing which which is what we expected to see, which was, um, uh, all of those potential clients focused on power. Um, when, when
We started this journey, um, uh, over a year ago was on near-term power 2026 2027, deliveries. And as time as time ticks on, um, their interest in power deliveries that are now 272829, um, they've just rolled that interest forward and so I I think the we're we're seeing continued demand, extending through, um, out years now which fits nicely with with basically the asset and the energy capacity that we're that we're recruiting in Texas.
Okay, that's great color. And then just as a follow-up, switching over to the digital asset business, you mentioned the strong institutional client pipeline and called out some of the Bitcoin treasury companies that you're working with. Could you maybe just talk a little bit about, you know, traditional financial firms, active managers, and hedge funds? You know, how has that base of clients looked? Are you seeing a big uptick there? And how are these, you know, potential new customers engaging you on the traditional finance side? Thanks.
Well, I think 1, you know you can answer it from a few different angles 1 angle. We're seeing is that
Almost every trade by.
Company is preparing or starting to prepare for a world where things move from accounts to wallets where stocks you know, equities are tokenized, where funds are tokenized or stable coins, become a much bigger part of payment systems and so on the infrastructure. So,
Side. We're engaged in lots of conversations um with both asset managers and and and and and Banks.
Um,
you know, on the sales and trading side, uh,
we have trade by hedge funds that are far more comfortable.
Hurdles of approval. Um, they still feel more comfortable in equities than crypto. Um, and so you're seeing a lot of
in, you know, ETFs and and um,
And these, these balance sheet companies um, that will change in time. Some of that is financing, right? It's the ETFs are easier to finance the same Prime Brokers. Um, but I think you're going to see kind of a merger of both on Shane crypto and and and trade fee stuff over the next few years.
Our next question comes from Brett, knobloch with counterfeit girls, please go ahead.
Hi guys. This is, uh, Thomas shinsky on for Brett. Thank you for taking my question. Um, just 1 from me, I guess regarding the recent sale of over 80,000 Bitcoin on behalf of a, you know, Satoshi era client, I guess, can you just share any insight into how galaxies is selected for this mandate? Um, was there a formal RFP process and and what do you think differentiated Galaxy from other potential counterparties for this um you know, client looking to offload his Bitcoin?
as a start, 1 of the reasons, we
got that trade and and many others is that we are
really religious about not speaking about why clients do things or their motivations. Uh I would say we've worked really hard since 20 really 2016207. He'd even free Galaxy at building up a network of people that care about this community and this was, you know, our our relationships that have
have gone back many years now of just building trust and you know in lots of ways as much as this is a
A.
Digital platform.
You know, technology. Uh, there's a still a whole lot of hand to hand combat in trust. And, you know, we we we do that every single day and you know, we hammer it into our our employees that. That's all we have right, you know? And so
I mean, I think that's that, that's a
Maybe it doesn't answer exactly what you want but that's the answer. I'm going to give you.
No worries. Thanks Mike.
The next question comes from Greg Lewis with PT. Please go ahead.
Yeah, thank you and uh, good morning everybody. And thanks for taking my questions. Um, you know, I was hoping you could talk a little bit more, um, you know, you mentioned in Q2, um, about, you know, the slowdown in activity on on the salana, uh, layer 1, um, kind of curious, um, you know, at a high level maybe what was driving that. And then and then as we look at July, um, you know, it it seems like a lot of things are, you know, improving along in terms of activity along the crypto ecosystem kind of curious, what you're seeing on on the salon and network in in July, if you're able to comment on that at this point,
Uh, yeah, sure. Um, morning Greg, I I'll start. Yeah, I think we, what, what? We saw pretty much through the first half of this year, um, was a, was a, a coming off of, um, a pretty aggressive, like localized, uh, volume on salana, for, for things like memecoin launches and things like that. And so, it really Q Q2 was, was more of the same, um, after that activity in Prior quarters, um, in the prior year, uh, had slowed down and leveled off. Um, I I, I could tell you that, um, salana, um, as well as, um, some of the other, you know, non- Bitcoin, layer ones. Um, the teams all around those ecosystems. Whether it's the foundations or, um, or or app Builders, and things like that, um, who are committed to, uh,
To those networks are pretty aggressively focused on how do we now, build functionality, so that onchain volumes are not flash in the pan, memecoin type volumes and instead are enduring volumes to either support things like stable, coin, payments, uh, and money movements. Um, actual consumer apps and things like that. So that takes time to like to layer into, to, to the layer ones and no pun intended, um, and actually have working technology. But but that, that is the focus of the industry, now is bringing durable, growing volumes onchain. Um, just where we're at now, is a is, at least on a specifically was a, a kink following, a pretty aggressive. Um, uh, onchain volume run up from meme coins.
you know, galaxies working hard, you, you you called out the the 20, you know, customers that you brought on as as you think of the revenue life cycle of of that opportunity for Galaxy the the initial
you know, Acquisitions of of of, of the
of the
crypt of the cryptocurrencies is important, um, in a revenue driver, but then, you know, could you talk a little bit beyond, you know, once they're, you know, I guess on the platform, you know, how we're thinking about
You know, there's other opportunities in terms of the asset management and the staking and potentially, The Lending, kind of like how how you think that that kind of plays out in in terms of a revenue opportunity.
Sure. So there's an asset management fee that we're getting in most of these for managing the assets, which, you know, roughly is about a percent. Um, there is a staking, you know, opportunity, uh, in most of these, uh, not the Bitcoin versions, of course, but the, the non Bitcoin uh, versions, uh, and so our assets under stake are going up and there's of course staking Revenue that comes with that. And, you know, the
The push for all of these companies is going to be to say, hey, we can do something that an ETF doesn't do, uh, to drive extra return and so you're going to see. Lending, uh, you're going to see on chain
Uh, activity, uh, and there's in in essence a race to create.
The most value.
Right again, Michael Saylor uh, pioneered this idea and you know, he was able to create value in micro strategy, uh, by a being first and providing access. Uh,
to bitcoin when a lot of people didn't have that access, uh, and created this
Almost machine. Um, and hasn't had to do much more than just buy the Bitcoin and provide leverage, and he's doing it with all kinds of different preferred structures that first converts now, preferred Equity preferred debt, um, I think you're going to see the other companies have to go once step further and and we're seeing that and those are the services we're trying to provide
Yeah. And the the only thing I'll add, if I met Mike is um, I think it's important that. So our relationship with these companies spends, the the capital creation as Mike said, sort of, you know, on the way in, as well as the ongoing management of the assets. Uh, in the in the companies that in in a lot of cases, those are actually being um done under multi-year contracts. Um and then if you think about the vehicles with different about these vehicles um is they're really, they're really closed in Perpetual vehicles. And so our goal is to do a really good job, um, to help the management teams and and the shareholders of these companies,
Um, make sure they have hardened infrastructure that they're managing their assets. Well that they're that they're growing their asset base in, in, in the underlying currency as most efficiently as they can. And that should set us up for having basically a Perpetual relationship with them because these vehicles, you know, don't have Redemption, they're not ETFs and so once the capital is in, it's there forever. Um, and so it's just our job to do a great job forever.
The next question comes from Chris Barnard with frozen B Securities, please go ahead.
Uh, I sent my questions. Congratulations to the results and also appreciate the additional disclosure. Um, I'm going to train right now. So I'm going to ask my 2-part question all at once. Um, the first question is on the data center business and how much you want to lean into this business? You know, if you're already sort of building the pipeline of 28 now but uh I know you're actively looking for for additional sites um that you're expanding Helios site, but also looking for additional sites, you know, is there a plan to, you know, potentially add a lot more capacity before the end of the decade, or is this going to be more methodical? So that the future growth will be like, 2029 or 2030 and that, that kind of thing. And then the second part of the question is, um, you know, how big do you want this data center business to be? It's kind of a different business than that of visual assets business. And there's your updated thoughts on on separating the 2 at some point, would be great. Thanks so much.
That I think the world may like has ever seen, but it's still pretty nent and so, um, and then there's also a practical component which is these are very large scale long-term development projects, that take a lot of capital. And so, the, our ability to grow, um, into the opportunity is sort of wholly dependent on 2 things. 1 US, executing excellently, but then also 2 growing and getting bigger as a company so that we can actually support the growth. So, um, you know, meaning like it would be totally imprudent for us to to now, take on, in parallel, for example, like another 10 billion dollar bill because that requires a capital base and, you know, the attention and resources that we're just not built out for today. So I think the idea is to methodically build a base of really high quality assets and high recurring Revenue, which then allows us to then accelerate growth from there as we see the opportunity to develop. So that that that's the way we're approaching it.
Um, yeah, in terms of how large we want, in terms of, we have 2 businesses under 1 roof, uh there are a lot of great companies with multiple businesses under 1 roof, I think of Amazon, you know, with a retail business, an entertainment business and Cloud business. Um,
We're going to keep them under 1 roof for a while and as long as 1 plus 1 equals more than 2. Uh we'll probably, you know, keep this this this setup if it
If the markets at 1 Point, tell us hey you're going to get more value by splitting them, then we're pretty rational guys. Uh, I do think
You know, to highlight what Chris said, this next...
12 months is really important because we go from putting out a lot of money to having a an asset that starts spitting out cash.
And, you know, once
12 months from now, 24 months from now, Helios becomes a big cash generator for us. It allows, uh,
It allows a lot more flexibility in how we deploy Capital, right? Right now, in some ways, we're sharing Capital, uh, because while the leases are mostly under in, uh, I'm sorry with the, the financing is mostly underwritten by this wonderful lease. Uh, they're still a parent guarantee and parent Equity. Uh,
Um, requirements. And so we're, we're we're having the best of both worlds, in lots of ways. Um, we're going to kind of run that until, uh,
Until we think there's a, a more acreditable uh, path forward.
Our next question comes from John Peterson with Jeffries. Please go ahead.
Oh great, thank you, good morning guys. Uh turn maybe just to come back just to stick with data centers and I'm curious for more commentary on hyperscalers, you know, you talked about it earlier but I'm curious. What hurdles you think that galaxies might still need to cross to convince hyperscalers to, um, you know, to sign a deal with galaxies? Are they waiting to see a finished product with, uh, with the core weave data centers? Um, or is it more about, uh, you know, proving that you have funding capacity or, or something else?
Yeah, um, uh, morning, John. So yeah, I think practically speaking the...
Other hyperscalers, evaluating Galaxy as a partner. You the the reality was is that we dedicated um our first 800 megawatts of available capacity to core weep and so you know I do think it is true that the the bigger more established hyperscaler companies do care a whole lot about who their counterparties are. Have they have they built data centers for the last 10 years, what's their track record, Etc? Which of course up until now we haven't had and so I I do think that they, they will care about it, but we also, we also, you know, once we made the decision to
Partner with core weave, we really didn't have anything to sell them.
To be to be totally candid. So I I think it's it's less about it's been less about us being evaluated as a new um upstart from a data center development perspective and and more about just literal practical availability. Um so I think for us the the setup for us was let's partner with Corey with execute on our existing 800 megawatt project which is a very large project and is going to spend multiple years. Um, and along the way, let's make sure we build up a pipeline of additional capacity that we are. Um, going to get approved for over time and as that capacity comes on, we'll, we'll have demonstrated our ability to deliver and sort of check that box off for the hyperscaler. So slightly different characterization than I think the, you know, you would think. But that that's that's been the reality.
I guess when we, I, I know we're thinking ahead past the 800 megawatts, but would it be a priority to diversify and, and bring in, um, a different customer or are you comfortable, um, with, uh, you know, being, you know, building solely for Coors,
yeah, I I think that um,
We we have definitely become. We have definitely uh, gotten comfortable, you know?
Taking on pretty significant exposure to core we've relative to to the size of our business. So I think that that's sort of, that can't be debated based on on the size of the Mandate that we committed to them, um, on a go forward basis. Um, I think it would be natural for anyone who had an opportunity in front of them, to build a portfolio of data centers to think about diversification, um, in terms of and client in terms of, uh, Regional geography, Etc. I think, generally speaking, you know, from a real estate or or uh portfolio perspective that kind of diversification, usually leads to premium valuation, usually leads to ability to finance things, more effectively. And so that's definitely on our long-term road map. I, I don't want to um, undersell though. Um, you know, a how good a partner Corey has been and B as their business grows and their successful uh and their success grows and their credit quality um, improves which would be our expectation over time. Um, that you know,
It certainly doesn't preclude us from wanting to continue to do business with them as a result. So we're going to keep an eye on it. I think it would be natural for all businesses to think about, um, uh, broader diversification to build the best and most durable business over time. So we'll we'll we'll definitely going to look, look at that.
The next question comes from Matthew galeno and Maxim group, please go ahead.
Hey, good morning. Thanks for taking my question. I guess, going back to the treasury companies. I'm curious if you can, uh, maybe talk about the competitive environment and the process of, um, sort of building those relationships and winning them. And if you have a pulse on, maybe, um, you know what, we should expect to see in, you know, a second half, 25, and at the 2026. As far as, uh, maybe new players coming into the
The treasury space and sort of how. Um, you know, I don't know if you could offer a number like, what percentage? You feel like you're you're touching before they're announcing and and and engaging or you know how how you know you feel about the Outreach and and getting to them before they come up to anybody else? Thank you.
yeah, listen, we are, um,
Seeing a tremendous amount of opportunities, there it will slow. You know, at 1 Point, the market gets saturated, um, most of them are offering similar product and so you'll see them in different tokens or or different mixes of tokens. Um, but I think we're probably, we've probably gone through Peak treasury company issuance uh of new companies.
Uh, what will be most interesting is which of the existing companies...
Become monsters. Right? I mean you think about the impact that micro strategy has had on the entire Bitcoin ecosystem? You know, it's probably the single most important player in the Bitcoin ecosystem.
The most coins. It's because of that has this huge, uh, marketing.
Piece to it. Um we've seen that in ethereum, there are, you know, 2 leaders and a in a in a few coming up uh
That all of a sudden ethereum from having having zero treasury companies. Um,
You know, 8 weeks ago, 10 weeks ago, uh now the biggest buyers of eth uh are you know, sharp link uh you know which is Joe lupin's company uh or or we're we're participating uh and and uh Tom Lee's company. Uh and so I I think you're going to continue to see those companies grow
and I'm, I think the new companies in those in those
Ecosystems will have a harder time getting oxygen, but there'll be new companies and new ecosystems as we go go forward. Um,
What I think we learned in this.
and it's a great lesson for me, was
How much bigger the equity Market investor base is than the traditional crypto Market investor base. And so if you think about
From the very start as as a Bitcoin prosizer, you're trying to bring people into the tent, right. The job was to orange pill people and explain how this worked and bring them into the community. Uh
These treasury companies have done an amazing job of bringing people into the crypto tent. And I think, uh,
They're going to continue to play a pretty important part.
The next question comes from. Edward angle with compass point, please go ahead.
Um, hi. Thanks for taking my question. Just wanted to follow up on some of the digital asset treasury companies. Um, I do see galaxies has been on some of the pipe dealers for some of these. I just wondering, are these meaningful Investments for your balance sheet or kind of just smaller contributions just kind of invest alongside some of your clients. Um, thanks.
Hey, thanks. Good morning. Yeah, I I think generally speaking these, These are relatively small Investments for us. Um, uh, our, our primary focus has been uh,
how can we, um, how can we put our franchise forward and partner with people who actually value our franchise and the skills? And the, the experience you bring to the table to help them make their company better ra, rather than, you know, I'll characterize as buying your way in. So we, we definitely, we definitely write checks. We we do that generally in, in general course of business, um, through a lot of different sleeves at galaxies, through our Venture fund, through our opportunistic, fun uh, pockets of capital but our, our commitment from a capital perspective. On these is really is really a 1 of support. Um, with our, our business and reputation and services very much front and center as the goal.
Um, great. And then, just to squeeze one more in, for the additional capacity that you're purchasing adjacent to Helios, I'm curious just if the timeline for Aura approval is any different than your existing pipeline?
Yeah. So um I I would, I would think about the additional uh, 1 gigawatt of interconnect request, um, at the at at the land, we are acquiring to, to be somewhat on par with our existing 1.7, uh, in the backlog. And so, um, uh, so think about 1.7 sort of going to 2.7 in terms of timeline to be to be a little more specific. Um, this, this this new, uh, property, um, interconnect is largely focused on, uh, on the new, um, Pitchfork switching station that's being built and delivered. And so, um, our existing 1.7, you know, effectively was was parsed between our existing tie line into into the cotton with switching station, which, which has up to 1.6. Gigawatts today approved, the, the the, which would be an incremental 800, from what we already have. Um, and so this this sort of layers into, uh, the new cap, Edge project that's already been approved and and is in Flight in, in our cut for the
The new switching station, which, which now we are, we we own significant amount of the land. Uh all surrounding that new project.
Our next question comes from David Ryan with citizens, please go ahead.
Hey, thanks. Uh, good morning. Um, just want to come back to the theme of tokenization and as we get closer and market structure for clarity. Uh, because just getting an update on how you see Galaxy as a player trying to find consensus on-chain. And essentially, if you see yourself as helping make sure tokenization happens. So, can I ask, do you raise primary capital? Do you have interest in providing creative traditional assets like tokenized stocks and bonds? And do you really just want to think about where you want to play or are there other areas where you don't want to participate? And then just one of the resources, you need to add to get where you want to be. Thanks.
Yeah, that's the 64,000 question for where crypto is going. Uh, and I think everybody in this industry including Galaxy is is trying to figure out
Where where we best? Uh, what role we best play? Listen, we we have a tokenization engine. We have, uh, a wallet, uh,
you know, business and gk8, uh,
We are doing a lot of staking and so we put that together as an infrastructure package and we're going to certainly uh look to be part of the solution for people on infrastructure. Um, it's unclear where these are going to trade still. Um, we will certainly be trading once they're trading and debating, you know, do you team up?
With people to, to be part of that exchange or platform. But it hasn't, you know, the
The road map is not necessarily written there yet. Some of that is uh, a lot of that is regulatory. Um, and so if we tokenize,
You know, Apple stock, for instance, you know, where, where is the liquidity of that going to going to going going to exist? Um,
and so,
Is is really important.
Got it. Uh thank you and just a quick follow up. Maybe shorter term just um you know the outlook for the investment banking team is the crypto Market through, obviously companies come in public here. Um you know there's a lot of m&a and I think we might be a lot more m&a. Um, in space um I know sorry necessarily a core driver like can drive
And a quarter. So just um any sense of like the opportunity from here in any way, you can frame maybe the incremental revenues that that you see from that
Yep. Um so the on the investment banking side, I would say our um where we've really shined over the years is focusing on Boutique m&a opportunities, where our expertise on both the buy and the sell side specifically to to crypto crypto companies, where they sit in the ecosystem, what their value added is really shines. That that pipeline has is the highest quality and largest in terms of dollar numbers and
and live transactions then we've ever seen before. And what's important about it is historically, if you remember, we we we had a pipeline in that business, um, that was pretty large and there were, there were some really chunky very large transactions in there. Now we have we have numerous, um, 9-figure. Um,
M&a proposed transactions that we're pursuing all at once. And so, we have like, we have higher number and, and a lot broader and durable pipeline of opportunities that are all very high quality companies that will very likely get bought and sold. And so, um, that part of the business, um, we're actually pretty excited about, um, it it, it's, you know, given the size of that market and those opportunities relative to the rest of our business. It's it's for the for the foreseeable near-term. It's going to be a relatively smaller contributor but nonetheless, an important growing 1 that, that is, uh, that's important to the not just the earnings of the business, but also the the knowledge base and continuing to build our reputation, um, as being 1 of the smartest players in the space. So that's what we're most excited about their, what, what the team is also focused on outside of that, which are, which are really near-term deals. We are transacting in is a little bit, what, Mike said, which was, um, investing in Talent, some lensure around, um, traditional
Broker dealer, um, uh, uh abilities, um, and thinking about what an on-chain Capital markets business would look like. I think what we what we know knew all along was we're unlikely to to to unlikely to be smart to compete against the large banks for traditional Capital markets deals. Um, but I'm not sure that that we agree that that should be applied to the new onchain, uh, economy that's growing. And so what we are investing in early stages is thinking about
Our strategy around Capital raising on chain, whether that be in in security token form or non-security other token form depending on where Market structure comes out. And so that that's that's our R&D phase today, right now.
The next question comes from, Joseph AI with Kona court, please go ahead.
Hey guys, good morning, um, great progress on that. Uh, everything a lot of questions been answered or asked. So just ask a quick 1 just really curious on this 9 billion dollar notional trade. Um, you know, it feels like the market absorbed that trade really well. Um, so a congratulations on that execution, but just kind of, you know, peeling a layer of the onion off the mechanics of it. Um, were you surprised to see, um, that trade, it felt like the the, you know, Bitcoin Market only dropped, you know, a very small amount on such a large trade. So just, you know, you know, any color on the mechanics and, um, you know, demand you saw, um, for that block. Thanks.
Yeah, I mean I I I'll give you some public info. Uh you can just because Michael Saylor, you know, puts out what he bought each.
you know, puts out what he buys each week, uh,
Call it Grace. Call it lock, call it Fortune, call it timing, uh, cam combination of all the butt.
You know, the, the execution happened when there was a tremendous amount of buying and that buying is coming, mostly from these balance sheet companies, not just Michael Saylor but Trump uh the the truth social the Trump trump version, you know, lots of them happen to be buying in that same.
And that's public information, and so you know, supply met demand or demand met supply. Um,
And we continue to see.
You know, big buying of crypto from balance sheet companies.
you know, the ethereum
Companies are buying, you know, a couple hundred million dollars, uh, each a week.
At least. And so I think as long as that continues crypto prices are going to look pretty good, you know, there's a backdrop that this all happens in, right? We've got
uh,
The economy finally showed a big drop in jobs in the revisions to jobs last Friday. We're now pricing in an 80% chance of a cut in September. The president is becoming more and more vocal about a new Fed chief, and he fundamentally believes Chairman Powell is making a mistake by not having cut rates.
Uh sooner. Um but 1 you know, the executive gets involved with the central bank and fires the head of the BLS.
Um, all of that.
plays into the Bitcoin narrative uh, plays into oh heck, we're going to have to inflate our way out of this giant debt trap and so
The macro story for Bitcoin and crypto is increasing, not decreasing.
and so I I think you're going to continue to see
um,
Decent demand for uh, for people wanting Bitcoin as part of their portfolio.
Right. Thanks for that caller mic.
ladies and gentlemen, in the interest of time, this conclude your question and answer session
I would like to order the conference back over to Mike Novogratz, founder and CEO of Galaxy Digital Holdings Ltd, for any closing remarks.
Guys, thanks, thanks a ton. We do notice that, uh, we had more demand than spots for the conference call for the earnings call, and, uh, you could call that a rookie mistake as our first.
Our first, you know us listed uh earnings call we promise next time we won't make that mistake. Uh
We are.
Working hard. We're excited over here. I said that earlier you know July was the best month we've had there. A tremendous amount that we didn't talk about uh Happening Here. We have 615 employees that are coming to work with a big smiles every day and I bet you by the time we speak to you next time. That number is bigger anyway. Thanks a lot and uh look forward to talking to you next next quarter.
Ladies and gentlemen, the conference has now concluded. Thank you for attending today's presentation. You may now disconnect