Galaxy Digital shares tanked 13% Wednesday after posting an $85 million net loss in the second quarter. The stock dropped to $18.97 before settling near $19.15. Yet buried inside the wreckage was something unexpected: the company's data center business just flipped to profitability for the first time, generating $11 million in adjusted EBITDA and pointing toward an $80 million quarterly revenue stream starting next quarter.
Michael Novogratz's crypto conglomerate reported $8.7 billion in gross revenue, with the loss driven primarily by digital asset depreciation. The company ended Q2 with $2.7 billion in total equity and $2.5 billion in cash and stablecoins. The net loss did narrow from $216 million in Q1, and adjusted gross profit swung to a $43 million gain from an $88 million loss. The stock market didn't care about that math.
Where the recovery is actually happening
Galaxy's Digital Assets and Data Centers businesses pulled in $86 million in combined adjusted gross profit. The Digital Assets segment alone produced $66 million in adjusted gross profit, up 34% quarter-over-quarter, though it still carried an $11 million EBITDA loss. Treasury and Corporate dragged things down with a $42 million adjusted gross loss, mostly from unrealized losses on holdings.
The Helios data center business is where the story shifts. Galaxy delivered all 133 megawatts of critical IT load from its first phase CoreWeave lease by quarter-end, hitting a major milestone on a 15-year contract. The Data Centers segment posted $20 million in adjusted gross profit and that $11 million EBITDA gain. Starting Q3, Galaxy expects this first phase to generate roughly $80 million in quarterly leasing revenue, with project-level adjusted EBITDA margins targeting above 90%.
The expansion nobody's talking about
The company already started construction on phase two of Helios, adding 260 megawatts of capacity with initial deliveries scheduled for Q2 2027. Galaxy closed a $3.5 billion private debt offering in July to fund the expansion and acquired three more development sites in Texas. The math gets interesting fast. If phase two hits similar margins, Galaxy could be looking at a very different financial picture by 2027.
For now, investors are fixated on the quarterly loss and asset depreciation. But the data center play, which looked speculative just quarters ago, is now generating real revenue and pulling toward margins that would make traditional infrastructure operators jealous. The stock reaction suggests the market hasn't quite connected those dots yet.
This article is informational only and does not constitute financial advice. Cryptocurrency and digital asset investments carry significant risk.
