Galaxy Digital Holdings Ltd. (TSX: GLXY) released financial results for the three months and nine months ended September 30, 2024, for both itself and Galaxy Digital Holdings.
Galaxy Digital has shared key Corporate and Business Updates:
- Financial Highlights: In the third quarter, Galaxy reported a net loss of $54 million, representing a significant narrowing of their net loss from the second quarter. They generated operating revenue growth of over 30% QoQ, despite industry spot trading volumes declining 15% and ether declining 24% in the quarter. For the nine months ended September 30, 2024, Galaxy reported net income of $191 million, driven by strong operating performance and positive digital asset markets. Galaxy’s equity capital was $2.1 billion as of September 30, 2024.
- Helios: Subsequent to quarter-end, Galaxy executed a non-binding term sheet with a U.S.-based hyperscaler to host high-performance computing at its Helios campus in West Texas. The term sheet includes options to allocate all of Helios’ 800 megawatts of currently approved power capacity to HPC hosting and support. The consummation of the transaction is subject to execution of definitive documents, customary due diligence and approvals of the parties.
- US Listing and Reorganization: Galaxy continues to work on completing its proposed reorganization and domestication to become a Delaware-incorporated company and subsequently list on the Nasdaq, upon completion of ongoing SEC review and subject to stock exchange, shareholder and applicable regulatory approvals of such transactions. On July 26, 2024, Galaxy filed an amendment to its registration statement responding to SEC comments, which is under review.
As noted in the update, Galaxy Global Markets (GGM) offers institutional-grade expertise and access to a range of digital asset products, “including digital asset spot and derivatives trading, financing, M&A advisory, and equity and debt capital markets services. GGM operates in two discrete business units – Trading and Investment Banking.
Trading reported counterparty trading revenue of “$54 million in the third quarter, a 117% increase quarter-over-quarter (QoQ), despite a 20% decrease in trading volumes, primarily driven by increased revenue from derivatives and lending activity.”
Galaxy’s average loan book size expanded to “$863 million, a 23% increase QoQ driven by increased demand from both new and existing counterparties, who relied on our lending desk to provide them with margin-based financing.”
Galaxy continues to onboard counterparties, including “large traditional asset managers and hedge funds, and ended the third quarter with 1,280 total trading counterparties.”
Investment Banking closed one deal subsequent to quarter-end, serving as the exclusive financial advisor to “an existing client on a small buyside acquisition. Galaxy is executing against a pipeline of mandates representing $2.4 billion in potential deal value.”
As covered, Galaxy Asset Management (GAM) provides investors access to the digital asset ecosystem via a “diverse suite of institutional-grade investment vehicles that span passive, active, and venture strategies.”
GAM management and performance fees were “$8.1 million in the third quarter, representing a 44% decrease QoQ, primarily driven by the nearing completion of an opportunistic mandate to unwind portfolios on behalf of the FTX estate.”
GAM reported AUM of approximately “$4.6 billion, a 2% increase QoQ, driven primarily by net inflows into GAM’s passive and active ETF strategies, which were offset by net market depreciation.”
In the quarter, GAM, in partnership with State Street Global Advisors, announced the launch of three “actively managed digital asset and disruptive technology focused ETFs that offer investors exposure to digital asset and disruptive technology equities, spot cryptocurrencies, derivatives, cash, and cash-like instruments (tickers: DECO, HECO, TEKX).”
