Q3 2025 Galaxy Digital Holdings Earnings Call

October 21, 2025

Speaker #1: Good morning, and welcome to the Galaxy Digital Q3 2025 earnings call. Today's call is being recorded. After today's presentation, there will be an opportunity to ask questions.

Speaker #1: To ask a question, you may press star, then one, on your telephone keypad. To withdraw your question, please press star, then two. At this time, I would like to turn the conference over to Jonathan Goldowsky, head of Investor Relations.

Speaker #1: Please go ahead, sir.

Speaker #2: Good morning and welcome to Galaxy's Q3 2025 earnings call. Before we begin, please note that our remarks, including answers to your questions, may include forward-looking statements. 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 U.S.

Speaker #2: Good morning and welcome to Galaxy's 3rd Quarter 2025 earnings call. Before we begin, please note that our remarks, including answers to your questions, may include forward-looking statements.

Speaker #2: updated. Additionally, we may discuss references to non-GAAP metrics that 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.

Speaker #2: With that, I'll

Speaker #3: Sure, our story gets out there, and anyone who wants to hear can hear. And so, thanks for following us. Listen, Q3 was the best quarter in Galaxy's history.

Speaker #3: And so, I I show up today with a grin. probably about running a company is that grin lasts probably for the length of this call.

Speaker #3: And that my face gets stern and we start grinding. you know, what happened? Listen, we have for eight years been trying to build a brand of confidence and trust.

Speaker #3: And Q3, it felt like that all kind of came together, right? We did a gigantic spot crypto trade, which came to us because there are guys in the community that trusted us to move $9 billion of their Bitcoin into cash.

Speaker #3: that didn't come overnight. That comes from a long time of relationship building and and and liquidity building, quite frankly. we also, you know, helped launch the largest Solana dApp.

Speaker #3: Again, raising $1.7 billion or $1.65 billion to invest in the Solana ecosystem. In doing it quickly, it comes from having built up trust with lots of people.

Speaker #3: And so, that's kind of the story. We've been working hard for eight years. We didn't do a great job telling our story originally, and we're really focused on that.

Speaker #3: Part of that was not being here. We're six months now in the U.S., Nasdaq company gives us a lot more ability to tell our story.

Speaker #3: And so, part of my job is out there making sure people understand what Galaxy is, what we're doing, and what we're thinking about. I'll just hit you with a few quick highlights, and then I'm going to pass this to Tony and Chris.

Speaker #3: But one, we generated over $500 million in net income. That's just a lot. Our assets on platform reached $17 billion. That's by far a record for us.

Speaker #3: That's strong organic growth and asset management and staking. you know, asset management, we we did a great job of understanding when all these treasury companies were starting.

Speaker #3: That we could play a role in helping them manage those assets and stake. And so, that was $4 billion plus of new assets. Added to the platform, and those are high-fee-paying assets that'll be with us for a long time.

Speaker #3: trading side outside of that $80,000 Bitcoin order, we saw record volumes. and that, you know, hopefully continues to grow each quarter. those are the businesses that we keep investing in.

Speaker #3: thinking about in the long run, give Galaxy great ballast. our lending book, you know, which had spent years roughly in that $900 to $1.2 billion, is is on the move.

Speaker #3: We were $1.8 billion and growing. And so, we talked a lot about credit needing to be a key part of the Galaxy growth story. We are focused on making it so.

Speaker #3: excitingly, we launched Galaxy One, it's our you know, opening opening for to get individual investors into the Galaxy universe. we're going to take the knowledge and institutional profile that we've built at Galaxy and and and open the window to to more and more people.

Speaker #3: it's a new business. We're going to give you updates. but it's going to take us a little while to get that really up and running.

Speaker #3: And so, let's think of that as a Q2 '26 big update. You know, data centers, which I always think of, we're half a data center company and half a digital assets company.

Speaker #3: We are grinding in the data center business. You know, there are two sides to this. There's the 800 megawatts that we have and building that out for CoreWeave.

Speaker #3: that's building on time. that's building on cost. That's getting it financed. All of those things, Chris is going to talk on, I'm feeling great about.

Speaker #3: And then it's, you know, we're we're in Q with a bunch of people for more power in Texas. And we'll know a lot more about that in the foreseeable future.

Speaker #3: But we feel pretty good that $800 million is not going to be our total footprint. And finally, listen, last week we did a PIPE deal, $460 million, from a large institutional investor.

Speaker #3: Couldn't be more excited about having them as a partner and investor in us. That money is going to be used to help build out a world-class company and a world-class data center.

Speaker #3: And with that, guys, like I said, couldn't be more excited. I'm going to pass it to Tony. Great. Thanks, Mike. And thank you, everyone, for joining the call today.

Speaker #3: That's with last quarter. I'll provide a summary of Galaxy's overall performance in Q3. Then I'll dive into some more of the details on the digital asset business.

Speaker #3: And then I will turn it over to Chris to provide a more detailed update on data centers. As Mike mentioned, Q3 was a standout quarter for Galaxy, with record performance across the digital asset segment and continued operational progress.

Speaker #3: As we scale our core businesses, GAAP net income for the quarter came in at $505 million, on record adjusted gross profit of $728 million, underscoring the strength of our diversified model and ability to execute in a dynamic market environment.

Speaker #3: This performance was driven by outsized contributions from both our digital asset segment and our treasury and corporate investment portfolio. In digital assets, we delivered a record adjusted gross profit of $388 million, reflecting strong momentum across trading, investment banking, asset management, and staking.

Speaker #3: Our platform continues to benefit from increased institutional engagement, broader client activity, and rising demand for sophisticated investment and advisory solutions. In treasury and corporate, we delivered adjusted gross profit of $408 million, primarily driven by gains across our digital asset and investment portfolios.

Speaker #3: Within our private investments book, we saw sizable unrealized gains from our investments in Ripple Labs and from Bullish, which went public during Q3. As a reminder, we've transitioned the majority of our venture investing activity from our balance sheet into our venture franchise within the asset management business, which allows our institutional LPs to invest alongside Galaxy while enabling us to generate long-term management fees for overseeing these investments.

Speaker #3: In data centers, as mentioned previously, we expect financial results in this segment to be de minimis until the first half of 2026, when we plan to begin recognizing revenue under phase one of our CoreWeave lease agreement.

Speaker #3: Until then, all major capital expenditures associated with our data center buildout are being capitalized, including the interest associated with the $1.4 billion project-level loan we secured during the quarter.

Speaker #3: Firm-wide adjusted EBITDA came in at $629 million, up from $211 million in Q2, a clear reflection of the increased scale and profitability across the enterprise.

Speaker #3: Total operating expenses excluding grossed-up transaction costs were $184 million in Q3. The increase from Q2 was driven by a $38 million one-time impairment related to our legacy mining infrastructure, and an increase in compensation expense.

Speaker #3: Looking forward, we do not expect any material further material impairments to our remaining mining equipment, which is now held on our balance sheet in an aggregate value of less than $50 million.

Speaker #3: Turning to the balance sheet, we ended Q3 with $1.9 billion of cash and stablecoins, up roughly $700 million from Q2, primarily reflecting the net sale of certain digital assets and investments during the quarter, as well as deposits received from CoreWeave following the exercise of their phase two and three options.

Speaker #3: Within our treasury and corporate segment, we held approximately $2.1 billion in net digital assets and investments at quarter end, reflecting the continued strategic allocation of capital towards high conviction investment opportunities.

Speaker #3: We ended Q3 with $3.2 billion in equity capital, up more than 20% quarter over quarter, with roughly $65% allocated to our operating businesses. Over time, we expect the amount of capital allocated to our operating businesses to continue to increase as we scale across both digital assets and data centers.

Speaker #3: As Mike mentioned earlier this month, one of the world's largest and most respected names in global asset management made a $460 million investment in Galaxy.

Speaker #3: The $325 million in net proceeds to the company will help drive the buildout of our Helios data center campus, which Chris will speak to shortly.

Speaker #3: We feel good about our overall capital position and will look to optimize our sources of funding as we continue building across two major growth businesses.

Speaker #3: As mentioned last quarter, we will continue to manage our balance sheet with Fortress Principles, demonstrating disciplined risk management and maintaining sufficient capital and liquidity to support sustained growth over the long term.

Speaker #3: Now, turning to our operating results, starting with digital assets. On last quarter's earnings call, we highlighted that July marked the strongest monthly performance for our digital assets business, and that momentum carried through the remainder of Q3.

Speaker #3: We had record results in global markets, generating approximately $295 million of adjusted gross profit, driven by healthy trading activity and continued growth across our client base.

Speaker #3: Industry-wide crypto trading volumes improved meaningfully during the quarter, reflecting higher prices, strong market sentiment, and increased engagement, and Galaxy outperformed that backdrop, delivering record crypto trading volumes that were up 140% from Q2.

Speaker #3: As Mike mentioned, this included the sale of over $9 billion of Bitcoin on behalf of a single client, and one of the largest notional Bitcoin transactions ever completed, underscoring our ability to deliver complex transactions at scale with limited market impact.

Speaker #3: In our lending business, as Mike mentioned, our average loan book grew to over $1.8 billion in Q3, driven by new clients and market appreciation.

Speaker #3: A shift in mix caused some net interest margin compression during the quarter, and as the crypto lending market evolves, we will continue to maintain prudent risk standards and explore strategies to efficiently fund this business with a focus on supporting long-term scalability.

Speaker #3: On the advisory front, Galaxy closed two deals during the quarter, including serving as a co-placement agent and financial advisor to Forward Industries on the $1.65 billion private placement, and this deal highlights the strength of our advisory franchise and our growing role as a trusted partner for institutional clients navigating this market.

Speaker #3: It also marks the first step in a broader partnership with Forward Industries that extends across our platform, which I'll speak to in a moment.

Speaker #3: Shifting to asset management and infrastructure solutions, we ended the quarter with more than $15 billion in total assets under management and assets under stake, nearly doubling from last quarter. We generated $23 million in adjusted gross profit, reflecting strong growth across both businesses.

Speaker #3: Assets under management grew to approximately $9 billion this quarter, reflecting strong net inflows of roughly $2 billion across both ETF and alternative strategies. This momentum was driven by continued adoption of our digital asset treasury solutions, which, with Galaxy being selected as the manager of choice by several companies in the space.

Speaker #3: Winning these mandates reflects our deep experience managing across market cycles and navigating volatility to deliver strong, risk-adjusted returns reinforcing our position as a trusted partner.

Speaker #3: These mandates also represent a meaningful shift in the profile of our asset management business to more strategic, long-term capital that generates recurring durable revenue streams.

Speaker #3: The asset management business is now firmly run rate profitable, giving us a solid foundation to continue investing in order to expand the platform and broaden our reach.

Speaker #3: Turning to infrastructure solutions, our assets under stake more than doubled quarter over quarter to approximately $7 billion with growth being driven largely by digital asset treasuries and our custodian integration strategy.

Speaker #3: Through these integrations with leaders across the custody space, including the custodian for the majority of U.S. crypto ETFs, we've positioned ourselves to serve institutional clients at scale, and enable our staking services to reach a much broader audience.

Speaker #3: Stepping back, Q3 served as a sort of activation of the flywheel across our multiple digital asset businesses. This is an exciting development and notable marker of the continued maturation in Galaxy's business model.

Speaker #3: A clear example of this flywheel is our work with digital asset treasury companies. What began as an emerging opportunity earlier in the year has evolved into a multi-channel business line with mandates across some of the largest publicly traded holders of digital assets.

Speaker #3: This includes supporting clients with initial capital raised through our advisory business, then leveraging our network to provide operational support and connectivity to key service providers to ensure a successful launch.

Speaker #3: It also includes working closely with treasury teams to implement institutional-grade yield strategies aligned with their objectives, spanning staking, lending, trade execution, asset management, and other on-chain opportunities, all within a disciplined, risk-managed framework.

Speaker #3: Our partnership with Forward Industries is a case in point. In Q3, we announced a strategic investment alongside MultiCoin Capital and Jump Crypto, in Forward Solana-based treasury initiative the largest of its kind to date.

Speaker #3: We supported Forward's private placement through our advisory business, assisted them with execution and deployment of the proceeds, became the sole asset manager of all their treasury assets, and helped launch their validator on the Solana blockchain.

Speaker #3: Collectively, our digital asset treasury mandates have added more than $4.5 billion in AUM and AUS to Galaxy, and at current market prices, we expect the annual recurring fee revenue associated with these mandates to be more than $40 million.

Speaker #3: This is exactly the kind of institutional-grade solution Galaxy is uniquely positioned to deliver, leveraging our expertise to build long-term partnerships and generate durable, recurring revenue for the franchise.

Speaker #3: Shifting to innovation, a couple of things to highlight. As part of our broader mission to connect traditional finance with blockchain infrastructure, last quarter we partnered with Superstate, one of our venture portfolio companies, to tokenize Galaxy's Class A common stock, on the Solana blockchain.

Speaker #3: As noted in our press release from September, these on-chain shares are not a synthetic representation of ownership. They're fully SEC-registered securities with the same legal and economic rights as our traditional shares.

Speaker #3: We believe this event marks a meaningful step towards modernizing capital markets, serves as a proof point for how traditional markets and on-chain infrastructure can connect, and positions Galaxy as at the forefront of that evolution.

Speaker #3: We will continue to work with regulatory agencies and leading financial institutions to explore new opportunities, to broaden and expand tokenization in the coming quarters.

Speaker #3: On artificial intelligence, we're not just building one of the newest, largest, and most advanced data centers in the world. We have bought into the promise of AI and the impact it can have on our overall company.

Speaker #3: Over the past year, we've integrated AI across nearly every function at Galaxy, from engineering and technology to finance and operations to trading and risk.

Speaker #3: Our employees are now using AI tools on a regular basis and productivity gains are materializing. In particular, areas like agentic coding are seeing step-change improvements giving us the confidence that continued investment in these tools will have compounding productivity benefits down the road.

Speaker #3: Looking forward, AI won't just streamline how we operate; it will redefine how we serve clients, innovate faster, and compete at scale. Last but not least, as Mike mentioned two weeks ago, we launched Galaxy One, our first direct-to-consumer product offering with an exciting growth opportunity for the franchise.

Speaker #3: Galaxy One gives U.S.-based individual investors access to high-yield cash, crypto, and equities trading, all through one single unified platform. Unlike many mass-market retail platforms, Galaxy One offers clients a seamless way to manage assets across both traditional and digital finance, supported by Galaxy's institutional expertise, operational rigor, and disciplined risk management.

Speaker #3: Galaxy One also opens up new opportunities for cross-platform collaboration and integration across our trading, asset management, and staking businesses. The premium yield product is a good example.

Speaker #3: Over time, we expect this product to broaden and diversify our sources of funding, which will help drive efficiency and profitability in our digital assets business overall.

Speaker #3: And while it's still early, we are encouraged by Galaxy One's initial traction. We are already seeing adoption from clients who closely align with our target market: mass affluent investors, who have historically been underserved by traditional platforms. This early engagement reinforces our conviction in the opportunity ahead.

Speaker #3: As Mike mentioned, we have an ambitious roadmap for this for Galaxy One, and we look forward to updating you on progress in the coming quarters.

Speaker #3: Wrapping up, Q3 was a breakout quarter for Galaxy, and our businesses are building momentum. We're heading into year-end with a strong foundation, clear priorities, and a long-term vision.

Speaker #3: With that, I'll turn it over to Chris.

Speaker #2: Thanks, Tony. Turning to our data center business, it was just one year ago on our third quarter earnings call that we announced the signing of a term sheet to support AI and HPC infrastructure at our Helios campus.

Speaker #2: In the 12 short months since, the progress has been extraordinary. CoreWeave has now committed to the full 800 megawatts of approved capacity. We've secured project financing for Phase One, and construction is advancing at an impressive pace.

Speaker #2: After laying the groundwork in the first half of the year, we carried significant momentum into the third quarter. We executed relentlessly and successfully, rapidly developing the phase one portion of the Helios campus on budget and on schedule.

Speaker #2: Some updates on our construction progress: approximately 70% of our civil and concrete work is now complete, and equipment deliveries and installations are well underway.

Speaker #2: We are now placing chillers and putting together the piping system that will form the backbone of our advanced liquid cooling design, an essential component to support next-gen GPUs at industry-leading cabinet densities.

Speaker #2: Our e-houses, which contain the critical electrical infrastructure, have started to ship from the integrators, and medium voltage switchgear and transformers are already being set on their pads.

Speaker #2: The building for phase one is on track to be fully dried in, or sealed from weather, within the next few weeks, an important step that protects the mechanical and electrical equipment from inclement weather and allows interior trade work to proceed regardless of outdoor conditions.

Speaker #2: We've already logged more than 500,000 hours worked with over 700 construction team members on site daily, an extraordinary effort that underscores the efficiency, precision, and discipline of the design and construction teams supporting the project.

Speaker #2: The next major construction milestone for us is the powering on of the first data hall, which is scheduled in early December. Following that milestone, we'll begin commissioning activities with our third-party commissioning agent, vendors, and contractors in preparation for making the first data hall ready for service.

Speaker #2: Importantly, we remain on schedule with construction. A testament to our growing data center team, the contractors, and subcontractors working on the project, and the thousands of hours of coordination required for complex projects like this one to be successful.

Speaker #2: At the same time, we're scaling the supporting infrastructure at Helios campus for both the first and second phase of construction. Our on-site workforce development hub, constructed on 90 acres, we own adjacent to the main Helios campus, has been open for nearly a month now in support of construction and operation activities.

Speaker #2: As we look ahead to our phase two and three projects at the Helios campus, we're applying lessons learned from phase one to optimize the design for scalability and constructability, while also enhancing the efficiency of our power and cooling systems.

Speaker #2: We are proactively securing long lead time items like backup diesel generators and medium voltage switchgear early, locking in cost certainty and delivery timelines. We've transitioned from planning and preparation to full-scale execution, as the Helios campus rapidly evolves from a construction project into what we expect will become one of the largest AI and high-performance computing campuses in the world.

Speaker #2: On financing, we achieved a major milestone in August with the closing of a $1.4 billion project financing facility with Deutsche Bank for phase one of Helios, covering 200 megawatts of utility power.

Speaker #2: This deal underscores our ability to execute on efficient capital structures and provides a signal of the market's confidence in our execution capabilities. The value of Helios and the long-term economics of our lease.

Speaker #2: The facility is structured at 80% loan-to-cost, and Galaxy has already funded the equity for the phase one development. It's a three-year loan secured by all Helios phase one assets, priced at SOFR plus 475 basis points, plus ancillary fees, bringing the all-in cost to approximately 10 to 11% if held to maturity.

Speaker #2: As a reminder, once phase one is stabilized and generating revenue, our plan is to refinance the construction loan at a lower cost of capital.

Speaker #2: Doing so will likely unlock equity, enabling us to recycle capital into future phases and additional developments, keeping our balance sheet flexible, our capital structure efficient, and our growth momentum strong.

Speaker #2: The success of this financing validates our capital strategy, discipline leverage, flexible terms, partnership with top-tier institutions, and an unwavering focus on execution. Shifting to power, as we spoke about last quarter, ERCOT's interim process and the level of scrutiny applied to large loads requesting to interconnect to the system has led to delays and additional capacity approvals across the state of Texas.

Speaker #2: Despite the longer-than-expected timeline, we remain convicted in our ability to work through the existing process and contract additional interconnection capacity at the Helios campus.

Speaker #2: Based on recent feedback, we believe that we are well positioned to receive approval for a portion of the requested capacity that we've studied and submitted for review.

Speaker #2: We view this additional capacity as a transformational, long-term growth opportunity for the Helios campus as we prepare for the next phase of AI and high-performance compute demand.

Speaker #2: As we shared last quarter, during Q3, we acquired 160 acres of additional land along with an additional one gigawatt low interconnect study adjacent to the Helios campus.

Speaker #2: With this addition, the Helios campus spans over 1,500 contiguous acres under Galaxy's direct control. Our Helios campus is strategically positioned to become among the largest AI data center campuses in the world.

Speaker #2: In a power market with exponential generation and battery storage growth, Helios stands as a flagship development for both Galaxy and the AI data center industry writ large.

Speaker #2: We were also encouraged to see wet break ground on the new pitchfork 345 kilovolt substation, which is expected to deliver an additional three gigawatts of power capacity with two synchronous condensers adjacent to the Helios campus, starting in 2028.

Uh, it's certainly not there yet but it will get there. Uh, our target audience uh is consumers. Uh, it's really the high-end consumers.

The FBI insured, you know, checking account. Uh, that pays a a darn darn, darn good. Uh, the highest interest that we can find in the market, uh, and then the 8%, uh, you know, Galaxy, uh, you know, offering and so that's that's attracting clients. We're pretty excited to see the uptake, uh, we also have stock trading crypto trading. We have a really ambitious roadmap over the next 6 to 18 months to roll out and really, you know, turn that that wallet into a 1-stop, you know, 1, Stop, sir, all wallet. Uh, it's certainly not there yet but it will get there. Uh, our target audience, uh, is consumers. Uh, it's really the high-end consumers.

Uh, that, that people, that want that same touch that Galaxy gives, uh, to our institutional clients, the same knowledge. Uh, but we don't want to just limit it to that. Uh, so we built it with the high-end consumer in mind, but, you know, the crypto ethos is everyone should get the same access to investing. And so, I, I would

You know, I kick myself if I didn't hope, uh, that at one point, we're serving a whole lot more customers than just the high-end consumer.

You know, I kick myself if if I didn't hope uh, that at 1 point, we're serving a whole lot more customers than just the high-end consumer.

Okay, the couple quick things I'll add I mean the the ethos behind launching Galaxy 1 on the, on the consumer side is meant to capture the entirety of a consumer's wallet from an Investment Portfolio perspective. And so what, what we're going to aim to do, what we started to do, we're going to aim to do, um, is add products that help broaden out, uh, where a where a high net worth consumer can invest their wealth, hold it and store it, see it every day, um, and as frictionally as possible reallocate and move it around across traditional Investments, equities, bonds, newer Investments digital assets, um, and cash management. Um, by the way, that that, that's a long-term roadmap for us, on the institutional side, as well. And so, when we think about where galaxies business are at large, on the digital asset side is going to go, the, the plan is to little by little, so start with digital

The couple quick things I'll add I mean the the ethos behind launching Galaxy 1 on the, on the consumer side is meant to capture the entirety of a consumer's wallet from an Investment Portfolio perspective. And so what, what we're going to aim to do, what we started to do, we're going to aim to do, um, is add products that help broaden out, uh, where a where a high net worth consumer can invest their wealth, hold it and store it, see it every day, um, and as frictionally as possible reallocate and move it around across traditional Investments, equities, bonds, newer Investments digital assets, um, and cash management. Um, by the way, that that, that's a long-term roadmap for us, on the institutional side, as well. And so, when we think about where galaxies business are at large, on the digital asset side is going to go. The, the plan is to little by little, so start with digital assets but little by little encroach upon um, all traditional Financial Services where we can all in 1 Place, give clients access

Assets. But little by little encroach upon, um, all traditional Financial Services where we can all in 1 Place. Give clients access, um, uh, to all the assets they own. Um, the as Mike said, the the target, uh, user base on Galaxy 1 is definitely different than what we served historically. So it's a tam expanding, uh, opportunity for us, um, early traction, uh, for us. Uh, seems to be hitting the mark, with the kind of the kind of customer that we want, um, some quick stats. The, uh, the average network of galaxies users on board today, um, is a little over $2 million average annual income, uh, is about 340,000 and so, um, we're we're not today targeting. Um, uh, what I'd say low low dollar, balances High leverage. Um, uh, short duration, option, trading short-term, day trading. We're we're really trying to Target a, uh, a customer base that has historically been underserved but has traditionally been the the highest profitable customer segments of most consumer platforms.

Customer base that historically been underserved. But has traditionally been the the highest profitable customer segments of most consumer platforms, consumers, that earn money have wealth and want to store and allocate it?

Informs consumers that earn money have wealth and want to store and allocate it.

Extremely helpful answers. Thank you so much.

The next question comes from, Patrick moly with Piper Sandler, please go ahead.

Yes, good morning, thanks for taking the question. So shifting to the data center business uh and the 2.7 gigabytes, that's currently waiting approval. You said that you expect um to get approval for that somewhat soon. I think any update on the timing there and how large you know any tranche that were to get approved would be and then

Yes, good morning, thanks for taking the question. So shifting to the data center business uh and the 2.7 gigawatts, that's currently awaiting approval. You said that you expect um to get approval for that somewhat soon. I think any update on the timing there and how large you know any tracks that were to get approved would be and then

you know just generally curious what sort of inbounds you've been getting on the potential for that incremental power. How is demand been there 1 of those conversations been like

You know, just generally curious, what sort of inbounds you've been getting on the potential for that incremental power. How has demand been there? What have those conversations been like?

Thanks.

I'm I'm I'm looking at Chris and he's looking at v um, you know, these are uh, tricky questions. Uh,

I'm looking at Chris, and he's looking at me. Um, you know, these are, uh, tricky questions. Uh,

We're not going to know until we get approval, as that is the honest answer. Uh, we.

We see lots of good signs. Um,

that that point to to,

To an optimistic outcome and but, you know, predicting the date. Uh,

Is probably a Fool's game because if we're wrong we're going to look foolish. And, you know, if you're right, you're going to like so they already told us that um,

You know, Texas got a little overwhelmed, uh, in the last 12 months with how many people have.

You know, Texas got a little overwhelmed uh, in the last 12 months with how many people have put in for approval. Um, there were stats out today uh that are kind of shocking at how money, how many applications went in. Now, a lot of those applications didn't have studies and didn't have they weren't really,

Put in for approval. Um, there were stats out today that are kind of shocking at how many applications went in. Now, a lot of those applications didn't have studies and didn't have— they weren't really.

threats to, to, to short-term approval, um,

But again, I, I, I, I, I say the...

But again, I, I, I, I say the...

you know, in the in the near future uh you can Define that however you want, um, but

You know, again I wish I could give you a better answer but that's that's where we're at.

Yeah. The the couple things I'd add the the um, what gives us High comp higher confidence, these days is uh, all the major constituents, um, and stakeholders who we are partnered with down there, in terms of, uh, getting approval, but implementing interconnect. And so, it's, it's not just urot, it's wet, it's also AEP, uh, our utility partner there. Um, all 3 are extremely active with us specifically today. Um, uh, finalized

Our utility partner there. Um, all 3 are extremely active with us specifically today. Um, uh, finalized approving finalizing. The the studies that have been in place for us, uh, uh, for over 18 months now, um, and things are progressing, um, at a faster Pace today than they, than they had been earlier in the year. So those are, those are the data points that give us. Um, some pretty, pretty good Comfort. Um, but as Mike said, you know, or cut and Texas are going to are going to take the the requisite time to make sure that they're not taking on, uh, loads that are going to destabilize the grid. And frankly there's, there's, um, a really, really large number of ill thought out not planned, not studied loads that have tried to get into the queue that that the good thing is, they're very focused on weeding that out. And and uh working with the folks who have demonstrated that they actually are going to deliver capacity when they say, they're going to deliver that that's operating in at a low that they say they're going to to hit your other question, really quickly. Um, what do we see on the on the demand side? Um,

Approving finalizing. The, the studies that have been in place for us, uh, uh, for over 18 months now, um, and things are progressing, um, at a faster Pace today than they, than they had been earlier in the year. So those are, those are the data points that give us, um, some pretty, pretty good Comfort. Um, but as Mike said, you know, or cut and Texas are going to are going to take the the requisite time to make sure that they're not taking on, uh, loads that are going to destabilize the grid. And frankly there's, there's, um, a really, really large number of ill thought out not planned, not studied loads that have tried to get into the queue that that the good thing is, they're very focused on weeding that out. And and uh, working with the folks who have demonstrated that they actually are going to deliver capacity when they say, they're going to deliver that that's operating in at a low that they say they're going to to hit your other question really quickly. Um, what do we see on the on the demand side? Um, I would say uh positive traction on that front. Um uh they're they're they're are increasing. Um, proactive Reach Out.

I would say, uh, positive traction on that front. Um, uh, there there there are increasing, um, proactive reach outs to us, um, from uh, very large customers. Um, in addition to our current partner core, we've who all want to know, um, when are we getting approval for how much and over what time period and that that is a um that is a very helpful thing to see. Um, when thinking about very long-term uh, big product decisions on potential incremental, capacity, that would be coming.

To us, um, from, uh, very large customers. Um, in addition to our current partner core, we've who all want to know, um, when are we getting approval for how much, and over what time period. And that is a, um, that is a very helpful thing to see. Um, when thinking about very long-term, uh, big product decisions on potentially incremental capacity that would be coming on in late 2028, 2029 and forward. So I think that the demand profile for, uh, our power has continued to, to

To remain there and grow, um, which is really good sign. As we're getting towards the point where we feel like, you know, something's really going to happen.

Um, in in late 20 in 2028 2029 and forward. So I think that the demand profile for, uh, our power has continued to, to remain there and grow, um, which is really good sign. As we're getting towards the point where we feel like, you know, something's really going to happen.

Okay. Thanks that uh that's great color and then just to follow up Chris, you mentioned the plans to eventually refinance, uh, and that would unlock some Capital. Any idea how much Capital the refinance could unlock. They could potentially go to Future um build outs, just wondering how to think about that and our model.

Okay, thanks. That, uh, that's great color. And then just to follow up, Chris, you mentioned the plans to eventually refinance, and that would unlock some capital. Any idea how much capital the refinance could unlock? It could potentially go to future build-out; just wondering how to think about that in our model.

Yeah, so, um, uh, we we do have we do have a pretty strong expectation that there will be an opportunities. Um, once we hit stabilization stabilization, meaning we've delivered 100% of the data Halls ready for service and they're, they're up and running and Corey was paying rent. Um, uh, we do believe there's going to be, uh, opportunities to relook at the financing structure at that subsidiary, for for Phase 1, um, and do something kind of cool. The, the, the, the, the way to think about it. Um, today and and look the, the specifics on what that's going to look like, on the forward here. So, think about that. Q3 Q4 of 2026 is, is it's a little unknown, because the market is pretty Dynamic and changing, right? The, the views of the AI boom, and its sustainability, um, are changing every day, the views of core weaves credit.

Is paying rent. Um, uh, we do believe there's going to be, uh, opportunities to relook at the financing structure at that subsidiary, for for Phase 1, um, and do something kind of cool. The, the, the, the, the way to think about it. Um, today and and look the, the specifics on what that's going to look like, on the forward here. So, think about that. Q3 Q4 of 2026 is, is it's a little unknown, because the market is pretty Dynamic and changing, right? The, the views of the AI boom and its sustainability, um, are changing every day, the views of core weaves credit profile, which in which lenders are very focused on. In addition, to galaxies credit profile, um, are changing, uh, and and getting better by the day on both fronts. And so, the ultimate outcome is, is really going to be a function of where, where we and core weave and the markets are then. But but the framework to think about is on a stabilized basis, um, there there are a bunch of, um, different examples.

Of stabilized cap rates that um 1 1 could look at and apply to come up with what sort of phase 1. Uh um the value would be in a stabilized basis. We we think about that today. Um, in the high single digits, I don't want to be too specific because I think there's there's, you know, if we in core we've continued to be successful, my guess is that number is going to try and lower, not higher, depending on where our long-term interest rates are. Um, but if you think about a, a high single digit cap rate as as value,

Profile, which in which lenders are very focused on. In addition, to galaxies credit profile, um, are changing, uh, and and getting better by the day on both fronts. And so, the ultimate outcome is, is really going to be a function of where, where we and core weave and the markets are then. But but the framework to think about is on a stabilized basis, um, there there are a bunch of um, different examples of stabilized cap rates that um 1 1 could look at and apply to come up with what sort of phase 1. Uh um the value would be in a stabilized basis. We we think about that today. Um, in the high single digits, I don't want to be too specific because I think there's there's, you know, if we in core, we've continued to be successful, my guess is that number is going to try and lower, not higher, depending on where our long-term interest rates are. Um, but if you think about a, a high single digit cap rate as as value, um, which is different than cost significantly. In our case, given that the economic associated, with the lease then, um, we

You, um, which is different than cost significantly in our case, given that the economic associated with the lease then um we we think about applying like a loan to value as opposed to a loan to cost and that refinancing situation and that will imply a pretty significant um opportunity to to refinance at bigger numbers, which should unlock, you know, multi hundreds of millions of dollars of equity.

we think about applying like a loan to value as opposed to a loan to cost and that refinancing situation and that will imply a pretty significant um opportunity to to refinance at bigger numbers, which should unlock, you know, multi hundreds of millions of dollars of equity.

Okay, great. Thanks for that, and congrats on on the strong quarter.

Okay, great. Thanks for that, and congrats on the strong quarter.

Thank you.

The next question comes from John. Peterson with Jeffrey's. Please go ahead.

Oh, great. Thanks. Uh, maybe just stick with some data center questions. Uh, so the 1.4 billion construction financing, can you give us uh, some guidance on the kind of the Cadence of when you'll pull that down because I don't think you pulled it all down at once, right?

Oh great. Thanks. Uh, maybe to stick with some data center questions. Uh, so the 1.4 billion construction financing, can you give us uh, some guidance on the kind of the Cadence of when you'll pull that down because I don't think you pulled it all down at once, right?

Yeah, no. We we we have not, we we are not pulling it down all at once we, um, we actually pre-funded, um, the equity uh, on our end. Because as we were bringing the financing together, you know, the project project needed to continue, um, which is, which is how we think about capitalizing Galaxy just to step back. Real quick is ensuring that we we have adequate capitalization to not only support the projects at their, um, at their stabilization, but adequate capitalization early so that we can lean in to build on time on budget and use that to, to get the best kind of financing. So we pre-funded Equity, um, uh, at closing, we we had a, we had a relatively small draw to to

Which is, which is how we think about capitalizing Galaxy just to step back. Real quick is ensuring that we, we have adequate capitalization to not only support the projects at their, um, at their stabilization, but adequate capitalization early so that we can lean in build on time on budget and use that to, to get the best kind of financing. So we pre-funded Equity, um, uh, at closing we we had a, we had a relatively small draw to, to reset our Equity back to, um, the the intended 20% Equity versus 80% debt on around the cost basis and then the Cadence of draw, um, it really follows the project budget, but I would think about it as as like, relatively straight line on a twice monthly basis, um, through the construction project. And so, as you can imagine, since we closed in August now, sitting here, in, in October, we've had, we've had a number, a number of, uh, of, um, semi-monthly drawers. Um, and so, you know, we're, we're, we're, we're drawing pretty regularly and we're drawing.

A pretty pretty straight line basis.

Reset our Equity back to, um, the the intended 20% Equity versus 80% debt on a, on the cost basis and then the Cadence of draw. Um, it really follows the project budget, but I would think about it as as like, relatively straight line on a twice monthly basis, um, through the construction project. And so, as you can imagine, since we closed in August now, sitting here, in, in October, we've had, we've had a number, a number of, uh, of, um, semi-monthly drawers. Um, and so, you know, we're we're, we're, we're drawn pretty regularly. And we're drawing a pretty pretty straight line basis.

That's really I'll just add go ahead. Yeah, I'll just add at at the end of the quarter John, we've drawn about, um, you know, about 430 million from the uh, 1.4 billion loan facility. So you'll see in total notes, payable, on the balance sheet about 1.15 billion, that comprises both the draw and that construction Finance as well as our outstanding convertibles.

Okay. All right. I'll just add go ahead. Yeah, I'll just add at at the end of the quarter John, we've drawn about, um, you know, about 430 million from the uh, 1.4 billion dollar loan facility. So you'll see in total notes, payable, on the balance sheet about 1.15 billion, that comprises both the draw and that construction Finance as well as our outstanding convertibles.

Okay, great, that's helpful. And then I was curious. If you had just some thoughts on your competitive positioning in the market from a data center perspective, you you probably saw the IPO of fur me. Uh, recently that's building in Amarillo which isn't too far away from the Helios campus and they're also talking about building many gigawatts. Just how do you think about the competitive nature of of that region um and just I guess more thoughts on that overall.

Okay, great. That's helpful. And I was curious, if you had just some thoughts on your competitive positioning in the market from a data center perspective, you you probably saw the IPO affirm me, uh, recently that's building an amarillo, which isn't too far away from the Helios campus and they're also talking about building many gigawatts. Just how do you think about the competitive nature of of that region um, and just, I guess more thoughts on that overall.

It's a great question. Um, listen, there's multiple facets to it, right? There's the market, um, data, you know, I think probably 2 earnings calls ago. We talked about a, a pipeline of things we were looking at potentially buy, uh, or or, or

Develop. Uh, that's all got far more expensive than it was right. Uh, markets for some of these companies. Uh,

optimism and so that feeds through to, you know, the price of projects and so um,

Without contracts, without without customers. Uh, the market is pricing in a tremendous amount of optimism. And so that feeds through to, you know, the price of projects and so um,

you know, in the short run, I don't think you're going to see us reaching out in in in buying a whole lot, more more power at

You know, in the short run, I don't think you're going to see us reaching out in in in buying a whole lot, more more power at, you know, at these prices. What's unique about

you know, at these prices, what's unique about

The Helio site is like it's an application process. We already own the land and, and all the infrastructure is built close.

Um,

We'll see, you know, there's a lot of speculative. Like I said, a lot of speculative money in this stuff, I'm sure some of those projects will get built. Uh, but many won't, uh, and so we're really just laser focused on, you know,

we'll see, you know, there's a lot of speculative. Like I said, a lot of speculative money in this stuff. Uh, I'm sure some of those projects will get built. Uh, but many won't, uh, and so we're really just laser focused on, you know,

Getting our project built.

Finance the, uh, and, and getting the, the new land, uh, and new power approved. So we can do that same process again. Um, we're in the market every day, looking at things talking to people you to try and understand the landscape. Um,

Finance, uh, uh, and getting the new land, uh, and new power approved. So we can do that same process again. Um, we're in the market every day, looking at things, talking to people; you try and understand the landscape. Um,

but,

You know there's a Gold Rush going on and so you got to be very careful during gold rushes that you build in smart places at the right price.

You know there's a Gold Rush going on and see you got to be very careful during gold rushes that you build in smart places at the right price.

Yeah. And the, the the other thing about that is, I think, I think the thing that we think the thing that's underrated, uh, heavily in the market today, um or undervalued is actual execution, right? And so you know we it's it's relatively easy to um sign and pass piece of paper with big numbers on them. Um uh and sign deals with big numbers on them. I think the most important thing uh for us. Um and for long term, actual customer demand is um,

Not only can you, uh, acquire access to power and acquire land. Um, but can you actually build on time and on budget. And I think that that's, that's, that's pretty under underrated and pretty underappreciated today in the market. Um, and as we think about the future, as um, companies like core weave, and also Microsoft and meta and Google, and you, you name them like their emphasis on. Can you actually do what you say you're going to do? Because we need the power. When we think we're going to have it um leads us to like to to focus. Squarely on do we have an excellent team? Do we have excellent Partners in the construction side and are we

Delivering on time and on budget. So that we prove the right to win the next contract. And I think that we're pretty far ahead of the of the pack when it comes to that relative to um, to the competitors.

Great, very helpful. Thank you very much.

The next question comes from Ed angle with compass point.

Please go ahead.

Hey, thanks for taking the question, congrats on, on great quarter. Um, 2 questions, the first was on Helios, other ones on more kind of operating um crypto business um, on Helios, you talked about that being uh potentially a multi-tenant site. Um just kind of curious how you're thinking about the puts and takes for financing when it comes to partnering with the nio cloud like corewave or or maybe even hyperscaler. Um thanks

Hey, thanks for taking the question, congrats on, on great quarter. Um, 2 questions, the first was on Helios, other ones on more kind of operating. Um, the crypto business, um, on Helios, you talked about that being uh potentially multi-tenant site. Um, just kind of curious how you're thinking about the puts and takes for financing when it comes to partnering with the nio cloud. Like Corey or or maybe, even hyperscaler. Um thanks

Speaker #2: It's great to see both wet and ERCOT investing in critical infrastructure in the region, reinforcing their commitment to reliability and the long-term growth potential of Helios and the broader data center ecosystem.

Speaker #2: Across our data center business, we're continuing to thoughtfully and strategically add world-class talent with proven expertise in engineering, construction, and operations to our data center business.

Speaker #2: In the last few months, we've made key hires from some of the largest hyperscalers in the world across the engineering, construction, and operations verticals of the business.

Yep. So um, uh, yeah, we're we're we're not sure long term, um, what the composition of tenant base is going to be, as we, as we built the Helios campus. The we we've been. As I've as we've said before, you know, over and over again. We mean it, like the, the partnership with core weave has been excellent. Um, they are, they are a great partner up and down, not just, not just on signing a commercial agreement. But in in design, in understanding the difficulties, uh, that come along with procuring equipment, timelines, um, teams Etc. The the, um, they're going through a transition period, um, and, and everyone should be, you know, should should talk to them on, on their earnings call. They're going through a period where the Market's trying to understand. You know, what core we use credit quality is today and what it should be on the forward. And that's going to be a big, big determinant of, you know, their ability to get better lease rates their ability to get

Speaker #2: The caliber this team gives me tremendous confidence in our ability to execute with precision across all three phases at Helios, and to deliver on the ambitious long-term vision we have for the business.

Speaker #2: The Helios campus represents more than just a single project. It's the cornerstone of Galaxy's next-generation infrastructure strategy and the blueprint for a multi-campus, multi-tenant, multi-gigawatt platform built to power the future of AI and high-performance computing.

Speaker #2: We continue to evaluate additional power and land opportunities across the region and nationally, leveraging the blueprint and expertise developed here to replicate the Helios model.

Speaker #2: Efficient, scalable, and AI-ready infrastructure built for the next generation of compute demand. It's been a transformative year for the business, and I couldn't be more proud of how our data center business continues to build momentum and strengthen its position with each passing quarter.

Financing ability for us as the as the landlord to, uh, to finance our projects. And so, um, uh, where that goes, you know, how the market evolves, its thinking on core weave is something we're very focused on and something that's a little unknown today, as we think about the trade-offs, um, uh, for capacity. Not not yet least for us. Um, there there's a real decision to be made as to whether, you know, on a on a net economic basis, whether a, um, lower yielding lease from a higher. Uh, credit quality tenant. Net balances out to a better economic equation for us as we think about broadening the portfolio. Like we're we're as we are as investors. We're we're big Believers in generally in in diversity and risk management and so

Speaker #2: Thank you all. Now, back to the operator for questions.

Speaker #1: We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys.

the, the customer base is just something that's like

For us as the as the landlord to, uh, to finance our projects. And so, um, uh, where that goes, you know, how the market evolves, its thinking on core weave is something we're very focused on and something that's a little unknown today, as we think about the trade-offs, um, uh, for capacity. Not not yet least for us. Um, there there's a real decision to be made as to whether, you know, on a on a net economic basis, whether a, um, lower yielding lease from a higher. Uh, credit quality tenant. Net balances out to a better economic equation for us as we think about broadening the portfolio. Like we're we're as we are as investors. We're we're big Believers in generally in in diversity and risk management and so economics aside um as we build the data center business over time diversifying, the the customer base is just something that's like

Speaker #1: If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster.

Course is the course sensibility for us as a as capital allocators and investors. Um, so I I think we we're biased to want to do that over time anyway, economic Society. Um, whether the economics pin out obviously better or not, it it's really going to be a function of like where the markets are at a point in time and where you know Corey is credit credit risk, perceived credit risk is relative to um some of the investment grade tenants

Course is a core sensibility for us as a as capital allocators and investors. Um so I I think we we're biased to want to do that over time anyway, economic Society. Um, whether the economics pin out obviously better or not, it it's really going to be a function of like where the markets are at a point in time and where, you know core we use credit credit risk, perceived credit risk is relative to um some of the investment grade tenants

Speaker #1: The first question comes from James Yarrow, with Goldman Sachs. Please go ahead.

Speaker #4: Good morning, and thanks for taking my questions. Congrats on the good quarter. I wanted to just touch first on the impacts of the forced liquidations we've seen across the crypto ecosystem.

Um, great thanks for the color and then, um, just kind of a bit more of a bigger computer question, but, um, in the past few months we've seen Galaxy get more involved in the equity space, whether it's the debts Investment Banking advisory, or even now the Galaxy 1 for, um, for retail. Um, have you think about the opportunities within institutional equities? Um, now that blockchain and and Wall Street are are converging more.

Um, great thanks for the color, and then, um, just kind of a bit more of a bigger picture question, but, um, in the past few months we've seen Galaxy get more involved in the equity space, whether it's the debts Investment Banking advisory, or even now the Galaxy 1 for, um, for retail. Um, have you think about the opportunities within institutional equities? Um, now that blockchain and and Wall Street are are converging more.

Speaker #4: Has that had ramifications on market structure and your client franchise? Maybe on which customers and, you know, maybe you could just summarize what the overall ramifications could be?

Yeah. Listen, if you ask me, my like, 5 year View and and Chris alluded to this early or

Yeah. Listen, if you ask me, my like 5 year View and Chris alluded to this early or

you're going to see so much tokenization of

Speaker #5: Yeah, so you know, first of all, Galaxy did spectacularly well during that liquidation. And so I wanted to shout out our trading desk. You know, we were quick to move.

Real-world assets of equities, fixed income, and commodities that...

real world assets of equities of fixed income of Commodities that

Speaker #5: We didn't have any credit losses. You know, we were all over our customer base, and it didn't hit us where it hits everybody else, right?

wallets and companies that that are engaging. You're going to see this blending of what we call digital assets. Are we all crypto right now and we call real world, you know, uh, traditional finance. And so is that blending happens? I think you're going to

wallets and companies that that are engaging. You're going to see this blending of what we call digital assets. Are we all crypto right now? And we call real world, you know, the traditional finance. And so is that blending happens? I think you're going to

Speaker #5: So who got hurt in that? First and foremost, market makers. You know, market makers that were market making on DeFi platforms like Hyperliquid or cross-market makers that were market making on Binance Plus others.

Speaker #5: And so I, you know, some estimates are as high as 25% of those guys got put out of business, which is significant. And so, what does that mean?

They're going to see crypto customers who traditionally have all wanted to shoot the moon, uh, as they mature slowly look for more conservative product, but the big buyers of conservative product of of, if it's tokenized credit will most likely be uh, people that were buyers of credit Just In traditional, you know, Finance side. And so like, what does that mean? It means if you're a traditional

You're going to see crypto customers who traditionally have all wanted to shoot the moon, uh, as they mature slowly look for more conservative product. But the big buyers of conservative product, if it's tokenized credit, will most likely be people that were buyers of credit just in traditional, you know, finance side. And so, like, what does that mean? It means if you're a traditional.

Speaker #5: It means you have a little less liquidity, you have a little wider bid-ass ass spreads, probably means there's lots of talent available to hire.

Speaker #5: But certainly not great for the ecosystem in the short run. Who else got hurt was retail. Lots of retail especially, overseas retail trades crypto very leveraged.

Finance Company bank or Finance Company. You know, this is coming. And so, you're trying to figure out a, how to develop your own, domain expertise how to partner with people, uh, how to buy

Finance Company, Banker Finance Company. You know that this is coming. And so you're trying to figure out a, how to develop your own domain expertise, how to partner with people how to buy. Uh,

Buy it to to get ahead of some of that. And so I think both from our advisory business but our our, our our

Buy it to get ahead of some of that. And so I think both from our advisory business but our ...

our Core Business is partnering, you know, we've got a real good 3 year, uh,

Speaker #5: And I've always scratched my head. I was like, we got a 40 to 80-ball asset. I'm not sure you really need two to three times the leverage on it, let alone 30 times of leverage.

our, our Core Business is partnering, you know, we've got a real good 3 year, uh, 3 year, uh,

3 year, uh,

Highway of.

Of of working with the big financial institutions as partners as advisor. Uh,

and I just don't see that slowing down. We see that every day. You know, Steve Kerr's, uh,

uh,

Literally, we have a meeting a day, it seems, with somebody who's looking at a way to partner with us. Um, and so hopefully we're going to announce some of those soon.

Literally, we have a meeting a day, it seems, with somebody who's looking at a way to partner with us. Um, and so hopefully we're going to announce some of those soon. Um, but.

And so, I'm really kind of bullish. What does that mean for Equity prices uh in some of these companies listen like in anything I mean it's hard to determine is, is our Equity Market overvalued fairly valued or undervalued, uh,

So, I'm really kind of bullish. What does that mean for Equity prices uh in some of these companies listen like in anything. I mean it's hard to determine is, is our Equity Market overvalued fairly valued or undervalued, uh,

You know, multiples are relatively High. Uh, in general, there's lots of liquidity, that's driving this thing up. There is the beginnings of some AI bubble, how long it goes. Is everyone's guess and everything gets pulled up with that. Um, I think you're going to see more and more crypto companies that are public. And so there's going to be more differentiation between companies that actually make money and companies that are just a story, um, or companies that are a story that are going to make money versus companies that are a story that aren't going to make money. Uh, you're going to see a consolidation. Uh, there are a lot of sub-scale crypto companies that have okay. Businesses, that might do, you know, 75 million 100 million in revenue and 20 million or even uh, that don't don't have the capacity to go public, but, but might be takeout candidates right now. Everyone seems to think they're worth too much. Um, uh, because we have this Euphoria, uh, and so you probably don't really see the, the shares reshuffle until there's a setback.

But this is going to be an ongoing story for the next 3 years. This merging of, you know, the crypto infrastructure with traditional Finance.

Was a follow-up, Mr. Angle.

Was there a follow-up Mr. Angle.

Um no, yes, thank you.

The next question comes from Devin. Ryan with citizens, please go ahead.

Very selective here. Um, and then also appreciate it's going to be lumpy, but just want to get a sense of how sustainable you think this trajectory is. Um, and just as you think about kind of the, the bigger picture for Galaxy, how much, uh, larger could it be just as some of these dabs and you probably raise, you know, tens of billions of dollars of capital potentially in the coming years. Thanks.

Hey, uh, thanks so much. And good morning, everyone. I appreciate you taking the questions here. Um, I just want to touch on the digital asset treasury opportunity. Um, you know, Galaxy just is uniquely positioned here with both a combination of your expertise, but also just the breadth of services across capital raising, asset management, and trading. So let me just get a little more sense of the demand you're seeing right now from groups that want to launch a strategy. Um, you know, how much you want to be a part of that? I suspect you're being still very selective here. Um, and then also appreciate it's going to be lumpy, but just want to get a sense of how sustainable you think this trajectory is. Um, and just as you think about kind of the bigger picture for Galaxy, how much larger could it be just as some of these dabs—and you probably raise, you know, tens of billions of dollars of capital potentially in the coming years. Thanks.

Listen, I think we're on the tail end of issuing.

Or coming down the pipeline but, you know, most of the bigger ecosystems have.

Listen, I think we're on the tail end of issuance. There's a few more coming down the pipeline but, you know, most of the bigger ecosystems have.

Have established themselves, right? You've got

Have established themselves, right? You've got.

A few big, salana dats. You've got a few big, ethereum, dats. You've got a bunch of Bitcoin dats. There doesn't seem to be a lot more room in those at least in those 3 tokens. Uh, which are the 3 biggest tokens in the ecosystem for more? There's a hyperlapse hasn't officially started trading yet but has been raised.

Um and so I think we we're on the tail end. Um,

the large question is, how big can some of these things grow, right? We saw micro strategy and hats off to Michael Saylor uh, grow.

The large question is, how big can some of these things grow, right? We saw MicroStrategy, and hats off to Michael Saylor, grow.

Far, far bigger than everyone ever expected. Um,

You know.

Uh, bit minor right now, uh, the ethereum debt that, Tom Lee. Uh, spearheads is having that same kind of excitement and growth and, you know, I think I looked at it this morning, it was still 145% premium raising Equity every day, buying ethereum. And so,

Uh, bit minor right now, uh the ethereum data, that Tom Lee. Uh, spearheads is having that same kind of excitement and growth and, you know, I think I looked at it this morning, it was still 145% premium raising Equity every day, buying ethereum. And so,

we'll see. Uh,

some of these are going to trade at discounts and there'll be some consolidation, uh, net net. They're very good for the ecosystem, in general, they brought a whole lot of new investors into crypto. Um,

We'll see. Uh, some of these are going to trade at discounts and there'll be some consolidation, uh, net net. They're very good for the ecosystem, in general, they brought a whole lot of new investors into crypto. Um,

and I think they will evolve to be big investors, uh, you know, if it's

And I think they will evolve to be big investors, uh, you know, if it's.

You know, staking assets or even investing in Venture, uh, you know, platform companies around their major, uh, their major, you know, token and so in some ways there are supplement or even replacement of the traditional Foundation, which got set up over in Switzerland because of the regulatory reasons.

And you know, we'll it's it's a little too early to see exactly what they become, but I think that's the the optimistic View.

Got it. Thank you. Um, just a quick follow-up here on the lending book. Um, you know, as you mentioned it's it's on the Move 1.8 billion dollars now. Uh, and, and I know it's important for, for a number of your clients, can you, you talked about where the demand is coming from right now? And then, just how you think about capacity for growing that from here.

Uh, and I know it's important for a number of your clients. Can you talk about where the demand is coming from right now? And then, just how you think about capacity for growing that from here.

Yeah, so the, you know, I, the demand, um, I would say is pretty broad-based and pretty similar to what it's been historically. Like for us, we sit in the middle of the institutional market. Um, we have both end customers who are, uh, borrowing cash and crypto largely to, um, to.

Make their, uh, positions more Capital efficient. So putting on putting on reasonable leverage, um, uh, into their positions. We also sit, uh, face, we'll call market makers and so uh, participants who borrow coin and cash for working capital effectively to make markets and then and then finally, there, there's an inner dealer Market. Um, where where the dealers, uh,

Uh, borrow from 1 another to fill their, their customer demand. That 1 is, is a steady state of piece of business but like less interesting to us. Um, so what, what, what we have always been focused on and what we just have started nailing, uh, with uh, with lower cost of capital and therefore, ability to provide uh better uh structures uh for clients.

Uh, borrow from 1, another to fulfill their, their customer demand that 1 is, is a steady state of piece of business but like less interesting to us. Um, so what, what we have always been focused on and what we just have started nailing, uh, with uh, with lower cost of capital and therefore, ability to provide uh better uh structures. Uh, for clients is really delivering. Um uh Len borrow and locate of assets for our institutional trading clients of the firm. Um, who want to, uh,

Is really delivering. Um, uh, Len borrow and locate of assets for our institutional trading clients of the firm, um, who want to, uh, um, augment their trading on on what? Historically been really a fully funded basis in crypto, historically. So that that's that's that's the pride. Focus of the business. That that's where I think it goes. The, you know, we have we have been focused on in the market is still lacking, um, a uh more automated margin based financing, sort of prime brokerage system that allows institutions to um uh

Um, augment their trading on on, what? Historically been really a fully funded basis in crypto, historically. So that that's that's, that's the Prime Focus of the business. That that's where I think it goes. The, you know, we have we have been focused on in the market is still lacking, um a uh more automated margin based financing, sort of prime brokerage system that allows institutions to um uh

And so that's what I think longer term. We're building out that. That's a big, uh, will be a big driver of a very fast growth of the loan book, assuming the financing is there for it. Um, but that's how we think about the lending business today. The one area that I didn't hit on and you don't really see in the numbers at all today that we think is very interesting, though, is our business. Historically has really been off-chain with clients and um, there are nent.

In a more automated fashion Access Capital as they trade um with leverage, constraints, Etc. We we are we have been building that we have actually rolled it out on a preliminary basis to to a small number of clients. Um, and we're going to do that very slowly because inherent in that is a ton of risk um, on the system side uh on the price action side that. Um, we're just not going to take in size until we're comfortable with it until the market uh is ready to have it. And so that's what I think longer term we're building at that. That that's a big uh will be a big driver of of of very fast growth of the loan book, assuming the financing is there for it. Um but that's how we think about the lending business today. The 1 area that that I didn't hit on and you don't really see in the numbers at all today that we think is very interesting though is our business. Historically has really been off-chain with clients and um there are nent

Um pools uh being built on chain for um for financing secured financing. And in some cases uh under secured or unsecured financing on chain, um, we we take that that market is very nent. We take that opportunity very seriously though and so I I could see a future where, um,

Our financing and lending presence, doesn't manifest itself purely in our loan book growth growth. But also manifests itself in, um, our infrastructure and Technology Building, uh, where we provide access to a much broader base, um, of onchain financing, um, that will uh that will be a pretty serious player in. So we're very focused on that as an opportunity.

That's great. Thanks for all the color, appreciate it.

The final question will come from Martin toner with ATB Capital markets. Please go ahead.

Thanks so much. Uh, good morning everyone. Um,

so if I, if I take your performance in digital assets this quarter by annualized, and I put a multiple on it, it implies it's worth a lot. Um, how sustainable are these results in your view?

so if I, if I take your performance in digital assets this quarter my annualized, it I put a multiple on it and implies it's worth a lot. Um, how sustainable are these results in your view?

Listen, crypto is a really volatile asset class. And I think you're going to continue to see, uh, at least part of our results trade with that volatility, right? Our balance sheet, we we try to maneuver our balance sheet to have less of it. When we think the Market's going down and more of it when the Market's going up. Uh, that's a difficult game. We, we do it better than most but we're certainly not perfect at it.

Listen, crypto is a really volatile asset class. And I think you're going to continue to see, uh, at least part of our results trade with that volatility, right? Our balance sheet, we try to maneuver our balance sheet to have less of it when we think the market's going down and more of it when the market's going up. Uh, that's a difficult game. We do it better than most, but we're certainly not perfect at it.

So I think you'll see a correlation of our of our treasury or our balance sheet assets, you know, with the market itself. Um, and

The digital assets business side, right? The the Enterprise business.

The digital assets business side right? The the Enterprise business still have some correlation because if the price of crypto goes down, the fees we make in lots of our asset management. Projects will go down often volumes go down and so crypto is not

Mature enough yet.

that you'll have a

That you'll have a, you know, if the S&P up or down, it doesn't really stop.

You know, if the S&P up or down, it doesn't really stop.

Morgan Stanley or Goldman Sachs from having good quarters or bad quarters. We're still going to be a little bit correlated to crypto. Uh our goal, of course, is to break that correlation and with each quarter, we're doing better at it and so looking at things like assets on platform. Uh,

Much more, you know the more assets on the platform, the more stable our business is going to be. Um, and so that's, you know, that is a North Star for, you know, Chris, Tony, Aaron, all of us here, uh, Jason, Steve, you know?

Much more, you know the more assets on platform the more stable our business is going to be. Um and so that's you know that is a a Northstar for you know, Chris Tony. Aaron all of us here. Uh Jason Steve, you know?

Our Senior Management constantly looks at that: okay, how do we get more assets on platform? How do we stack more assets on platform? Um,

And we're getting there. Uh, we're not there yet. And so, uh, unfortunately, I don't think you should annualize, unless you really think you're going to continue to have this kind of great inflow, uh, into the crypto markets quarter after quarter, we still are bullish over the medium term. Uh,

Our, our Senior Management constantly looks at that, okay, how do we get more assets on platform? How do we stack more assets on platform? Um, and we're getting there. Uh, we're not there yet. And so, uh, unfortunately, I don't think you should annualize, unless you really think you're going to continue to have this kind of great inflow, uh, into the crypto markets quarter after quarter, we still are bullish over the medium term. Uh,

I, I still think.

given the sad state of fiscal Affairs in the world that

Bitcoin at a million dollars is going to make sense 1 day.

Given the sad state of fiscal affairs in the world, that Bitcoin will reach a million dollars is going to make sense one day.

I've always said this publicly, I hope it doesn't happen next year because some real s*** had been happening in the US economy. Uh, that wouldn't be good for any of us, um, but I think we are going to see a slow debasement of Fiat currencies, which is going to benefit the space that we're in. And so,

I, I guess.

You know, that's that's the the the real just straight up honest answer. Uh, we try every quarter to make this business better and we're going to keep grinding away at that.

You know, that's that's the the real just straight up honest answer. Uh, we try every quarter to make this business better and we're going to keep grinding away at that.

That's great. Thanks Mike. Um can I select if I can give you 1 more?

That's great. Thanks, Mike. Um, can I select if I can give you one more?

Do you think, uh, you can do GPU as a service at Helios with some of the capacity? And are you thinking about it?

Sure. So um I think technically the answer is yes, we could do that.

Um, uh, are we thinking about it? The answer is no. Um, and the the, the, the, the 2 reasons why our 1, um, I think there are really good companies, like our partner core weave who have built layers and layers of technology and Nvidia themselves who have built layers and layers of Technology on top of. Um, just owning raw chips, that are really value, add, and really get the most out of what are increasingly complex, GPU clusters, that, that, that expertise. Um, we have not invested in yet we don't have in-house and I, I think it's, it would be nice to think. We would just start doing that by buying gpus the the

The other thing given that the other just just, you know, um, uh, math lesson for us, is the, you know, we're not.

Really good companies, like our partner core weave who have built layers and layers of technology and Nvidia themselves who have built layers and layers of Technology on top of. Um, just owning raw chips, that are really value, add, and really get the most out of what are increasingly complex, GPU clusters, that, that, that expertise. Um, we have not invested in yet we don't have in-house. And I, I think it's, it would be nice to think. We would just start doing that by buying gpus, the, the, the other thing given that the other just just, you know, um, uh, math lesson for us, is the, you know, we're not,

We're not confident in what useful life of gpus are ultimately going to be and the cycles of GPU efficiency. You know are pretty naive and still. And so we we like very much investing in Long lived infrastructure that that we understand useful life of and we don't quite yet understand what the useful life of gpus are. And so the business model around return on Capital, um, on gpus particularly if you're not you haven't added real expertise in real value ads. I think is a really challenging thing to, uh, to decide to do so. We're, we're, we're not thinking about it.

We're not confident in what useful life of gpus are ultimately going to be and the cycles of GPU. Um, efficiency, you know, are pretty Nason still. And so we we like very much investing in Long lived infrastructure that that we understand useful life of and we don't quite yet understand what useful life of gpus are. And so the business model around return on Capital, um, gpus, particularly if you're not you haven't added real expertise in real value ads. I think is a really challenging thing to, uh, to decide to do so. We're, we're, we're not thinking about it.

Great. Thanks for taking the question.

that concludes our

yeah, that concludes our

thank you. This concludes our question and answer session, I would like to turn the conference back over to Mike Nova, grants founder, and CEO of Galaxy digital for any closing remarks.

Thank you. This concludes our question and answer session. I would like to turn the conference back over to Mike Novogratz, Grants Founder and CEO of Galaxy Digital, for any closing remarks.

Guys, uh, thanks for spending an hour with us this morning. I hope you hear from the tone. We're excited about the opportunity ahead of us.

uh, we're charged up about our third quarter but we're already a month into the fourth and so uh,

Guys, uh, thanks for spending an hour with us this morning. I hope you hear from the tone, we're excited about the opportunity ahead of us. Uh, we're charged up about our third quarter, but we're already a month into the fourth, and so, uh,

We understand our job here. Uh, and we're going to

We understand our job here, and we're going to.

You know, work hard for you guys. So stay tuned.

The conference has now concluded, thank you for attending today's presentation. You may now disconnect

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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