Revenue and gains from operations fell 3.8% year-to-year to $8.71bn, missing Bloomberg analysts' estimate of $11.65bn. Diluted earnings per share swung to a loss of $0.09 from earnings of $0.08 a year earlier. For the third quarter, its West Texas lease alone is expected to produce roughly $80mn in quarterly revenue at a project-level adjusted EBITDA margin above 90%. The loss belongs to the balance sheet Galaxy is winding down.
Where the loss actually came from
The damage sat almost entirely in treasury and corporate, the segment holding Galaxy's own crypto and investment positions, which posted a $42mn adjusted gross loss as net digital asset exposure fell 15% quarter-on-quarter to $1.2bn.
The trading and asset management businesses moved the other way: digital assets adjusted gross profit rose 34% quarter-on-quarter to $66mn even as industry-wide trading volumes fell by double digits, with Galaxy's own volumes down only around 7%, pointing to market share gains in a shrinking market. "Crypto bear markets are the best time to build," founder and CEO Mike Novogratz told analysts.
Around 72% of Galaxy's $2.7bn in equity is now allocated to its operating businesses rather than its treasury, a quiet restructuring that has been under way for a year and shows up plainly in this quarter's split.
The quarter the rent started arriving
Data centres produced their first real operating results: $20mn in adjusted gross profit, up from $3mn, and $11mn in adjusted EBITDA. One caveat the headline numbers skip: the segment's $31mn net income leaned on a $32mn tax benefit, Galaxy's share of a roughly $65mn clean-electricity investment credit. The cleaner test of recurring economics will come in the third quarter, the first full period of contracted rental income.
The buildout behind it is funded. Galaxy closed a $3.5bn offering of senior secured notes on 28 Jul, the largest financing in its history, covering the remainder of Phase II's 260 MW expansion, with deliveries expected from the second quarter of 2027. Three new Texas sites acquired since quarter end, Merlin, Caspian and Selene, take the development pipeline past 5.7 GW.
The institutional roster behind the pivot
Novogratz made the same case in a CEO letter published alongside the results, framing the quarter as evidence of a broader thesis: onchain finance and AI's hunger for compute, he argued, are not two stories but one.
He backed it with partners rather than projections. BNY, custodian to tens of trillions of dollars in institutional assets, is adding staking to its custody platform with Galaxy and named the company a design partner for its next-generation digital-asset infrastructure. With State Street, Galaxy runs SWEEP, a tokenized fund for institutional cash management the two firms first brought onchain in December. Eligible Morgan Stanley Wealth Management clients can lend crypto to Galaxy through a referral arrangement and receive shares of spot crypto exchange-traded products in return, while Invesco's bitcoin, Ether and Solana ETFs all carry the Invesco Galaxy name and BlackRock works with Galaxy across its own crypto ETF range, from bitcoin fund liquidity to Ethereum fund validation.
The letter also put a bigger number on the anchor lease than the earnings call did: an average of more than $1bn a year in revenue across its full 15-year term, well above the $80mn quarterly figure guided for the third quarter.
None of it shows up in this quarter's numbers. It's the argument for why Novogratz thinks they will look different in future ones.
The Texas audit lands on Galaxy too
Governor Greg Abbott's directive ordering regulators to audit every data centre project seeking grid connection, the same review that has reshuffled how investors price Bitcoin miners chasing AI revenue, reaches Galaxy at a delicate moment: the company expects no imminent word on which of its expansion sites clear review.
Galaxy has posted $50mn in financial security for the 1 GW Helios III request, $45mn for Selene, and completed the interconnection milestones that make Caspian eligible for the most advanced approval category.
What to watch
Three things decide whether this quarter marks the turn Galaxy says it does. Whether third-quarter results show the promised $80mn in Phase I rent flowing through at the stated margin.
Second, whether the 830 MW of approved, unleased capacity at Helios signs a tenant, something Galaxy says it is deliberately unhurried about as new credit-wrap structures widen the pool of tenants it would accept. And third, whether Helios III, Caspian and Selene clear their audits intact. If those land, the treasury swings that produced this quarter's headline loss become the least important line in the company's results.
