By Why Did Galaxy Report An $85 Million Loss?
Galaxy Digital reported an $85 million net loss for the second quarter of 2026 as falling cryptocurrency prices reduced the value of its digital asset and investment holdings.
The company posted a loss of $0.09 per share on Wednesday, beating analyst expectations for a loss of $0.28 per share. Revenue declined 15% to $8.7 billion from $10.2 billion in the first quarter and came in about $300 million below the roughly $9 billion analyst consensus.
Galaxy shares fell more than 5% in premarket trading and were down 7.23% following the results, leaving investors focused on whether the company’s newer infrastructure operations can offset weaker crypto valuations.
The total cryptocurrency market capitalization declined during the quarter and stood at about $2.1 trillion on June 30. Galaxy’s treasury and corporate division recorded a $42 million adjusted gross loss, driven by unrealized losses on digital assets and investment holdings.
Adjusted EBITDA improved to a loss of $77 million from a loss of $188 million in the first quarter. Although that reduced the operating deficit, the headline net loss showed that Galaxy’s reported earnings remain sensitive to cryptocurrency prices.
Are Galaxy’s Operating Businesses Improving?
Galaxy’s operating divisions produced $86 million in adjusted gross profit and $1 million in adjusted EBITDA, both stronger than in the previous quarter.
The digital assets business generated $66 million in adjusted gross profit, an increase of 34% quarter over quarter. That improvement came despite the decline in the wider crypto market, supporting management’s argument that trading, asset management and institutional services can generate income during weaker market conditions.
Galaxy said the results reflected the “resilience of our business model and further demonstrates that our earnings are becoming less dependent on the direction of digital asset prices.”
The quarter nevertheless showed that the transition is incomplete. Operating businesses improved, but unrealized losses from Galaxy’s treasury and investments were still large enough to pull the company into a net loss.
Investors must therefore separate two parts of the results: the performance of Galaxy’s customer-facing businesses and the accounting impact of digital assets held on its balance sheet. A recovery in crypto prices could reverse some of those valuation losses, while another decline would continue to affect reported earnings even if operating activity remains stable.
Investor Takeaway
Galaxy’s crypto operations improved during a weak quarter, but the negative share reaction shows investors are not yet treating the company as insulated from digital asset prices. Helios must deliver recurring cash flow before the infrastructure business can materially reduce that exposure.
How Quickly Can Helios Change Galaxy’s Earnings?
Galaxy’s Helios AI data center generated revenue for the first time during the quarter, producing $20 million in adjusted gross profit and $11 million in adjusted EBITDA.
The result followed the phased delivery of 133 megawatts of information technology capacity under Galaxy’s long-term lease with CoreWeave. With the first phase fully online, Galaxy expects Helios to generate about $80 million in quarterly leasing revenue beginning in the third quarter.
The company expects its 15-year partnership with CoreWeave to produce more than $1.2 billion in average annual revenue once the contracted capacity is operating. That would give Galaxy a source of recurring income that is less directly tied to cryptocurrency prices, trading activity or investor demand for digital assets.
Galaxy said Helios began generating revenue during the quarter as Phase I capacity came online.
The first revenue contribution is important because Galaxy has invested heavily in converting Helios from a Bitcoin mining facility into an AI computing campus. Investors will now watch whether quarterly leasing revenue reaches management’s forecast and whether operating margins improve as more capacity is delivered.
What Should Galaxy Investors Watch Next?
Galaxy expanded its infrastructure pipeline after the quarter by acquiring three additional development sites in Texas. The additions increased its potential power capacity to more than 5.7 gigawatts, giving the company room to pursue further AI and high-performance computing agreements.
The company also completed a $3.5 billion private debt offering to finance construction of Helios’ second phase. That funding supports expansion but adds financing obligations, making timely construction and customer delivery important to the investment case.
The third quarter will provide the first clearer test of whether Helios can produce the expected $80 million in quarterly leasing revenue. Investors will also track CoreWeave’s capacity needs, construction progress and Galaxy’s ability to secure tenants for its additional Texas sites.
Crypto prices remain another major factor. A stronger market could improve treasury valuations and activity across Galaxy’s digital asset operations, while another downturn could offset infrastructure gains.
The quarter therefore presented two different versions of Galaxy. Its digital asset holdings generated an accounting loss, while its crypto operating businesses improved and Helios began producing cash flow. The stock’s reaction suggests investors need more evidence that the second trend can become large enough to outweigh the first.