Galaxy Digital shares fell 5% after Q2 results beat earnings estimates but lacked a new data-center lease. The Helios campus began generating revenue, and total debt topped $6 billion.
Galaxy Digital (GLXY) shares dropped more than 5% in pre-market trading Tuesday after the crypto financial services firm reported second-quarter results that beat analyst estimates for the bottom line but lacked a new data-center lease investors had been waiting for.
The company posted a net loss of $85 million, narrowing from $216 million in the first quarter. On a diluted and adjusted basis, the loss came to $0.09 per share, narrower than the $0.28 loss analysts had expected.
Revenue from Galaxy's digital assets operation generated $66 million in adjusted gross profit, up 34% from the prior quarter, even as trading volume slipped 7%.
The firm's data center business posted revenue for the first time in the quarter, after completing the initial phase of its Helios campus in West Texas. The segment produced $20 million in adjusted gross profit and $11 million in adjusted EBITDA, reversing a $900,000 adjusted EBITDA loss in the first quarter. Galaxy delivered 200 megawatts of gross power, representing 133 megawatts of critical IT capacity, to CoreWeave under a 15-year lease agreement.
What may have disappointed some investors was the absence of a new data-center customer or lease announcement. Galaxy said it remains in discussions with prospective tenants for another 830 megawatts of approved capacity at Helios. CEO Mike Novogratz had said earlier this year that he expected the remaining capacity of the 1.6-gigawatt Texas site to be leased by the end of the summer.
Galaxy did announce it acquired three new sites in Texas for future data centers. The company also closed a $3.5 billion private offering of senior secured notes due 2031 on July 28, through its subsidiary Galaxy Helios Data Centers II LLC, to fund construction of Helios Phase II. That pushed total debt to over $6 billion.
The selloff in Galaxy shares reflects a market that had priced in a lease announcement that did not materialize, traders said. The stock had rallied in recent weeks on expectations of further data-center deals.
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