Galaxy Q2 2026 Earnings: Reduced Losses Amid Data Center Expansion

Article by KarenZ, Foresight News

Galaxy's Q2 earnings report shows two business engines operating in different ways.

One track follows the fluctuations of the crypto market, with falling coin prices continuing to pressure financial performance; the other extends from the data center in Texas, with servers being deployed and power delivered, and rental income gradually recognized as capacity comes online.

On August 5, Galaxy Digital reported its second-quarter 2026 results. The company posted a net loss of $85 million for the quarter, a reduction of $131 million compared to the $216 million loss in the first quarter; adjusted gross profit was $43 million, compared to a loss of $88 million in the first quarter. Adjusted EBITDA was a loss of $77 million, compared to a loss of $188 million in the first quarter.

In simple terms, adjusted EBITDA is an operating metric derived from net income by excluding interest, taxes, depreciation and amortization, stock-based compensation, and certain one-time items, primarily used to compare business performance across different quarters.

Breaking down the business segments, the digital assets and data center operations together generated $86 million in adjusted gross profit and a combined adjusted EBITDA of $1 million. Specifically, the digital assets business achieved $66 million in adjusted gross profit, a 34% sequential increase, and an adjusted EBITDA loss of $11 million; the data center business generated $20 million in adjusted gross profit and $11 million in adjusted EBITDA.

The portion of Galaxy’s overall adjusted EBITDA that remains in the loss zone is primarily attributable to the company’s own investment portfolio. The financial statements classify this under the “Treasury & Corporate” segment. This can be understood as a basket of assets held by Galaxy using its own capital, including spot digital assets, derivatives, and ETFs, as well as publicly traded stocks, venture capital, private equity, and fund investments.

In the second quarter, the segment recorded an adjusted gross loss of $42 million and an adjusted EBITDA loss of $78 million. Galaxy attributed the primary cause to unrealized losses from its digital asset and investment positions. The combined digital asset and data center operations contributed $1 million in adjusted EBITDA; however, after including this segment, Galaxy’s overall adjusted EBITDA turned into a loss of $77 million.

As of June 30, the net exposure of this portfolio was $1.16 billion. The largest component was venture and fund investments at $606 million, followed by Bitcoin exposure at $400 million, other token exposure at $76 million, Solana exposure at $58 million, and other liquid investments at $19 million. The financial report specifically notes that the Bitcoin and Solana exposures include not only spot holdings but also derivatives, short positions, other hedging positions, wrapped tokens, and related investment instruments; therefore, the stated amounts should not be interpreted directly as spot token holdings.

On the balance sheet, as of June 30, Galaxy's total assets increased by 9% quarter-over-quarter to $10.844 billion from $9.992 billion; total equity decreased from $2.779 billion to $2.720 billion; and cash and stablecoins declined from $2.605 billion to $2.459 billion. During the same period, the net exposure to digital assets and investments decreased from $1.362 billion to $1.160 billion. These are end-of-period balance changes, which are distinct from the net loss for the quarter in terms of financial reporting口径.

An interesting contrast has also emerged within the digital asset business.

Gross profit from global market operations increased from $31 million to $49 million, a 58% sequential growth; the number of counterparties rose from 1,691 to 1,741, with average loan size remaining roughly flat at approximately $1.4 billion. The company disclosed that its trading volume declined by 7% sequentially and noted that industry-wide trading volumes fell by more than 10% during the same period. It can be confirmed that Galaxy maintained its relative market share amid weaker market conditions, but this alone does not indicate that long-term profitability has stabilized.

Data on asset management and infrastructure solutions is more affected by cryptocurrency prices. Galaxy disclosed that, as of the end of the second quarter, the combined total of assets under management and staked assets amounted to approximately $7.1 billion, a 12% sequential decline primarily due to falling digital asset prices. Of this, ETF-related assets totaled $1.805 billion, alternative assets amounted to $2.553 billion, and staked assets reached $2.79 billion.

133MW begins generating rental income; Helios moves from construction site to profit and loss statement.

The most substantial change in Q2 occurred in western Texas. Galaxy delivered the full 200 MW of power for Phase 1 of Helios to CoreWeave, corresponding to 133 MW of critical IT load, and completed the Phase 1 delivery as planned. Rental revenue was recognized progressively during Q2 as delivered capacity came online, marking the first quarter in which the data center segment became a revenue-generating operating business.

Aerial view of the Galaxy Helios data center campus

Upon completion, Galaxy expects Helios Phase 1 to generate approximately $80 million in quarterly rental income starting in the third quarter of 2026, with an adjusted EBITDA profit margin exceeding 90% at the project level. CoreWeave’s lease has a base term of 15 years; the total committed critical IT load across all three phases amounts to 526 MW.

The company expects average annual revenue from this lease portfolio to exceed $1.2 billion over the lease term, with an average lease-level adjusted EBITDA margin projected to exceed 90%.

This business also requires more capital. Data center capital expenditures in the second quarter amounted to $448 million, up from $354 million in the first quarter. By the end of the quarter, total liabilities classified under the data center business increased from $1.33 billion to $1.548 billion.

On July 28, a subsidiary of Galaxy completed a private placement of $3.5 billion in senior secured notes maturing in 2031, with proceeds to be used for the construction of Helios Phase 2. Phase 2 plans to add 260 MW of critical IT capacity, with the data hall expected to begin delivery in the second quarter of 2027.

Regarding the most prominent figure in the financial report—“over 5.7 GW”—it must be qualified: this refers to the potential power capacity available for Galaxy’s deployments in Texas, not capacity that is currently energized or under signed lease agreements. Helios currently has over 1.6 GW of approved power capacity, with two additional 1 GW load applications pending grid interconnection with ERCOT; the newly acquired Merlin, Caspian, and Selene sites have potential capacities of approximately 500 MW, 700 MW, and 900 MW respectively, with Merlin’s initial agreement supporting about 74 MW.

While Helios offers longer-term rental contracts, Galaxy’s digital assets business is working to turn its institutional services into reusable products.

In the second quarter and thereafter, Galaxy sequentially launched institutional over-the-counter prediction market trading, an on-chain financing rate product (GOFR), and Galaxy Curator.

Among these, the on-chain financing rate product GOFR aggregates variable interest rates from on-chain lending markets such as Aave, Morpho, Spark, and Kamino into a dynamically rebalanced financing rate. Customers interact directly with Galaxy, which handles wallet management, smart contract execution, and collateral monitoring. The company commits up to $100 million of its own capital as senior loss protection, subject to specific terms and conditions.

Galaxy Curator builds institutional treasury strategies on Morpho and distributes them via Fireblocks Earn, enabling institutions to access on-chain yield products within their existing approval, signing, and strategy control workflows. These enhancements expand Galaxy’s service offerings, but since they were not separately disclosed as revenue in this quarter’s financial report, a more accurate description is “expansion of product capabilities” rather than “growth trajectory validated.”

The compliance channel is also being advanced in parallel. In May, the New York State Department of Financial Services granted GalaxyOne Prime NY a BitLicense and money transmission license, enabling it to provide regulated digital asset trading and custody services to institutions in New York State.

In August, Galaxy announced a multi-year partnership with BNY Mellon to provide staking support for BNY’s digital asset custody platform and to collaborate on the design of the platform’s infrastructure.

In the same CEO letter, Mike Novogratz summarized Galaxy’s strategy as the convergence of two forces: the migration of financial activity on-chain, and the growing demand for power, land, and data centers driven by advancements in artificial intelligence. This represents management’s explanation of the company’s direction, not the actual financial results. The real information reflected in the second-quarter financial statements was more straightforward: cryptocurrency asset prices continue to significantly impact profitability; the resilience of the digital asset operations business has improved; and the data center segment generated positive adjusted EBITDA for the first time.

The challenges facing Galaxy have thus become more concrete. The on-chain products must convert institutional partnerships into sustained revenue, while the Texas campus needs to transform potential GW into billable MW, node by node. In the financial report, one side shows the still-volatile cryptocurrency price curve, while the other shows meters that have already begun to turn. The weight of the next phase depends on whether these meters can be lit up, one by one, on time and within budget.