Executive Summary / Key Takeaways

• Dual Growth Engines: Galaxy Digital is strategically positioned at the nexus of the evolving digital asset and artificial intelligence (AI) infrastructure markets, leveraging its expertise in both to drive long-term growth and diversify revenue streams.
• Record Digital Asset Performance: The Digital Assets segment achieved its strongest monthly performance in July 2025, marked by a significant $9+ billion Bitcoin trade and substantial growth in Assets Under Management (AUM) and Assets Under Stake (AUS), underscoring robust institutional adoption.
• AI/HPC Data Center Expansion: The Helios campus is undergoing a transformative conversion to a 3.5-gigawatt AI/High-Performance Computing (HPC) data center, with CoreWeave committing to the full 800 megawatts of initial capacity, signaling a future of predictable, high-margin revenue.
• Evolving Regulatory Clarity: Recent bipartisan legislative efforts in the U.S. Senate and SEC initiatives like "Project Crypto" are moving towards a clearer regulatory framework for digital assets, which is expected to foster innovation and institutional confidence, directly benefiting Galaxy's compliant-first strategy.
• Strong Financial Position & Outlook: Galaxy reported a net income of $505.10 million and adjusted EBITDA of $629.40 million for Q3 2025, with total equity reaching $3.20 billion, supported by strategic capital raises and a disciplined balance sheet approach.

Bridging Worlds: Galaxy Digital's Strategic Foundation

Galaxy Digital stands as a pivotal force in the convergence of traditional finance and the burgeoning digital economy. The company's overarching strategy is to build a comprehensive, institutional-grade financial services and infrastructure platform, uniquely positioned across two high-growth sectors: digital assets and AI-enabled high-performance computing (HPC). This dual focus, underpinned by a commitment to regulatory compliance and technological innovation, is designed to create a resilient and diversified business model. The recent listing on Nasdaq, following its domestication and reorganization in the U.S. in May 2025, marks a significant milestone in its journey to solidify its presence in global capital markets.

The regulatory landscape, while historically uncertain, is showing signs of maturation, which plays directly into Galaxy's strengths. Recent bipartisan efforts in the U.S. Senate, including a discussion draft released on November 11, 2025, aim to codify how digital assets are classified and overseen, granting the CFTC exclusive jurisdiction over digital commodities and reaffirming the SEC's role over digital asset securities. Concurrently, SEC Chairman Paul Atkins' "Project Crypto" initiative, further detailed on November 12, 2025, seeks to bring greater legal clarity through a formal token taxonomy and a refined application of the Howey investment-contract framework. These developments, alongside the GENIUS Act signed in July 2025, which regulates stablecoins, indicate a growing consensus among U.S. lawmakers for bespoke rules for crypto market structure. This evolving clarity is a significant tailwind for Galaxy, which has consistently prioritized operating within regulatory frameworks, distinguishing it from many less-regulated competitors.

Technological Edge: Fueling the Digital and AI Revolutions

Galaxy's competitive advantage is deeply rooted in its differentiated technology and infrastructure. In the digital asset realm, its GK8 self-custody technology provides secure, institutional-grade cold and hot wallet solutions with integrated tokenization capabilities. This technology offers tangible benefits by enabling institutions to self-custody assets with enhanced security and control, a critical factor for discerning clients. The integration of Galaxy's staking services with Fireblocks in Q2 2025 further expands institutional access to secure, scalable staking through a trusted custody framework, broadening distribution and driving organic growth in assets on platform.

The company's foray into the AI/HPC data center business, particularly the conversion of its Helios campus, showcases another layer of technological differentiation. AI workloads demand significantly more power and cooling capacity—5 to 10 times that of traditional data centers. Galaxy is addressing this with advanced cooling solutions, including chillers arriving in Q4 2025, and a modular approach to electrical systems, utilizing prefabricated electrical houses for accelerated deployment. The Helios campus is being equipped with backup generators to provide full backup power for critical mechanical systems. The integration of Nvidia (NVDA)'s Quantum-X Photonics InfiniBand COP networking switches by CoreWeave at Helios is also expected to contribute to energy savings and operational cost reductions. These technological investments are designed to meet the escalating demand for high-density compute, positioning Galaxy at the forefront of the rapidly expanding AI data center market, projected to reach $47.72 billion by 2029 for AI/HPC infrastructure and $60 billion for building improvements by 2033.

Digital Assets: A Foundation of Institutional Trust

Galaxy's Digital Assets segment demonstrated exceptional performance in the third quarter of 2025, with July marking the strongest monthly performance in the firm's history. This was significantly driven by a monumental $9+ billion Bitcoin trade executed on behalf of a client, described by management as "one of the largest Bitcoin trades in history," which the market absorbed smoothly, indicating robust demand. The company's crypto trading volumes were down 20% in Q2 2025, outperforming the industry's 30% decline, by capitalizing on market dislocations.

The Asset Management Infrastructure Solutions business saw its Assets Under Management (AUM) grow to $10.50 billion as of September 30, 2025, an 81% increase quarter-over-quarter and 126% year-over-year. Excluding opportunistic assets, AUM still increased 92% year-over-year to $8.10 billion. Assets Under Stake (AUS) also surged by over 30% to $3.10 billion in Q2 2025, despite a notable drop in onchain activity on networks like Solana. The Galaxy Ventures Fund I closed at an oversubscribed $178 million, focusing on early-stage companies building the onchain economy, with $70 million already deployed to support stablecoin adoption and tokenization.

Galaxy's strategic engagement with "balance sheet companies" – firms raising capital to deploy in crypto – has been a significant growth driver, with over 20 such partnerships bringing more than $1.5 billion in assets onto Galaxy's platform and over $2 billion in notional volumes traded since Q1 2025. These relationships are often structured under multi-year contracts, aiming for perpetual client engagement. The company also foresees a massive opportunity in tokenized funds, predicting a market capitalization of $1.9 trillion by 2030, a staggering 5,622% increase from early October 2025. This vision is further underscored by Galaxy's own initiative to tokenize its Class A common stock on the Solana blockchain in September 2025.

Data Centers: Building the AI Future

The Data Centers segment is rapidly transforming into a cornerstone of Galaxy's long-term strategy. The Helios campus in West Texas is being converted from a bitcoin mining facility into a world-class AI/HPC data center. CoreWeave has now exercised its third option, committing to the full 800 megawatts of gross power approved for Helios, which will be tailor-built for their AI and HPC operations. This commitment provides a strong foundation for predictable, recurring revenue, expected to commence in Q1 2026.

Construction at Helios is advancing, with the Phase 1 building fully demolished and preparations underway for the data center buildout. Backup generators are scheduled for delivery through Q1 2026, and chillers for advanced cooling are arriving from November 2025 into Q4 2025. Galaxy is on track to deliver the initial 133 megawatts of critical IT capacity for Phase 1 in tranches throughout the first half of 2026. The company has also acquired an additional 160 acres of adjacent land with a 1 gigawatt load interconnection request, expanding the total potential power capacity at Helios to 3.5 gigawatts, positioning it to become one of the largest AI data center campuses globally.

Financially, Galaxy is in the final stages of securing Phase 1 project-level debt financing, expected at a sub-10% stream rate, with an all-in cost of capital between 10% and 11%. Phase 1 CapEx is estimated at $11 million to $13 million per megawatt. The company is also exploring project-level equity financing for Phase 2 and aims to refinance at lower costs once projects are stabilized and generating revenue. The legacy Bitcoin mining operations are being wound down, with over half of the machines expected to be sold by the end of Q3 2025. The remaining machines, under a new hosting agreement, are anticipated to contribute over $30 million in annual revenue and be EBITDA positive by H1 2026.

Financial Performance and Capital Strength

Galaxy Digital reported a robust financial performance for the three and nine months ended September 30, 2025. Net income reached $505.10 million for Q3 2025, compared to a net loss of $33.30 million in Q3 2024. For the nine months ended September 30, 2025, net income was $240.30 million.

Adjusted EBITDA, a new profitability metric introduced by management, stood at $629.40 million for Q3 2025 and $551.10 million for the nine months ended September 30, 2025, reflecting strong operational performance. Total revenues for the three and nine months ended September 30, 2025, were $28.40 billion and $50.04 billion, respectively, primarily driven by a significant increase in digital asset sales.

The company's balance sheet demonstrates increasing strength, with total equity growing by $978 million to $3.17 billion as of September 30, 2025. This was bolstered by a public offering of shares in June 2025, which generated approximately $477.80 million in net proceeds, and a $460 million private strategic investment in October 2025. Cash and stablecoins remained strong at $1.14 billion. The issuance of $1.30 billion in 0.50% Exchangeable Senior Notes due 2031 in October 2025 further enhances capital for growth across core operating businesses and general corporate purposes. Management has indicated that Q2 2025 was the last quarter to be impacted by the negative mark-to-market adjustment on embedded derivatives, suggesting a clearer financial picture moving forward.

Competitive Dynamics and Strategic Positioning

Galaxy operates in a highly competitive landscape, facing both crypto-native firms and traditional financial institutions. In the digital asset space, competitors like Coinbase Global (COIN) offer broader retail access, while specialized miners such as Marathon Digital Holdings (MARA) and Riot Blockchain (RIOT) focus on scale in mining operations. MicroStrategy (MSTR) has carved a niche with its bitcoin treasury strategy. Galaxy differentiates itself through its integrated ecosystem approach, offering a full suite of institutional services from trading and asset management to staking and advisory. Its commitment to regulatory compliance, while sometimes leading to higher costs or limitations on certain offerings compared to less-regulated offshore competitors, is a key differentiator for institutional clients.

In the nascent AI/HPC data center market, Galaxy competes with traditional data center operators and cloud infrastructure providers. Its methodical growth strategy, focused on executing high-quality, large-scale projects like Helios, aims to build a base of recurring revenue. While currently reliant on CoreWeave for its initial capacity, Galaxy's long-term roadmap includes diversification of clients and geographical footprint to enhance valuation and financing capabilities. The company's ability to attract talent from leading hyperscalers like Microsoft (MSFT) and Meta (META) underscores its ambition and competitive drive in this new sector.

Risks and Challenges

Despite its strong position, Galaxy faces inherent risks. The digital asset market remains highly volatile, and fluctuations in cryptocurrency prices can significantly impact financial results. Regulatory uncertainty, though improving, still poses a risk, particularly regarding the classification of digital assets as securities and the evolving landscape of DeFi protocols. The reported transfer of over 2,800 BTC by Galaxy to Coinbase Prime in November 2025, coinciding with a Bitcoin price drop, highlights the ongoing market sensitivity to large institutional movements.

The AI/HPC data center expansion is capital-intensive and subject to risks such as financing availability, infrastructure development challenges, and reliance on a single major customer (CoreWeave) for initial revenue. Supply chain disruptions for specialized AI/HPC equipment and potential increases in electricity costs also present operational challenges. Furthermore, the company's dependence on its founder and CEO, Michael Novogratz, for strategic direction and key relationships, represents a key-man risk.

Conclusion

Galaxy Digital is charting an ambitious course, strategically leveraging its expertise in both digital assets and AI/HPC infrastructure to capitalize on the profound transformation of global financial markets. The company's robust Q3 2025 financial performance, marked by record digital asset trading volumes and significant growth in AUM, underscores the strength of its core digital asset businesses. Simultaneously, the methodical buildout of the Helios AI/HPC data center campus, backed by substantial financing and a clear roadmap for revenue generation, positions Galaxy as a key player in the burgeoning AI infrastructure market.

While the inherent volatility of digital assets and the evolving regulatory landscape present ongoing challenges, Galaxy's commitment to institutional-grade technology, strategic partnerships, and a compliant-first approach provides a compelling investment thesis. The company's ability to attract and service a growing institutional client base, coupled with its long-term vision for tokenization and onchain finance, suggests a strong trajectory. Investors should monitor the successful execution of the Helios data center project and the continued maturation of digital asset regulation as key indicators of Galaxy's sustained growth and market leadership.