Texas Data Centers Offset Crypto Losses as Helios Generates First Revenue

Woofun AI reports that Galaxy Digital's operational divergence has crystallized, with Texas-based data center infrastructure generating tangible revenue while cryptocurrency market volatility continues to weigh on financial performance. This strategic bifurcation, highlighted in the company's recent earnings disclosure by KarenZ for Foresight News, reveals a firm pivoting from pure asset speculation to heavy industrial capital deployment. The core tension lies in balancing the erratic returns of digital assets against the steady, lease-driven income of physical infrastructure.

The financial trajectory for the second quarter of 2026, released on August 5, demonstrates a marked improvement in loss containment. Galaxy Digital recorded a net loss of $85 million, a significant reduction of $131 million compared to the $216 million loss incurred in the first quarter. Adjusted gross profit swung from a loss of $88 million to a positive $43 million. Similarly, Adjusted EBITDA improved from a loss of $188 million to a loss of $77 million, indicating that operational efficiencies and new revenue streams are beginning to offset broader market headwinds.

Disaggregating the results by segment reveals the source of this stabilization. The combined digital assets and data centers segments generated $86 million in adjusted gross profit and $1 million in adjusted EBITDA. Within this grouping, the digital assets business achieved $66 million in adjusted gross profit, representing a 34% increase, yet it still posted an adjusted EBITDA loss of $11 million. In contrast, the data centers segment contributed $20 million in adjusted gross profit and a robust $11 million in adjusted EBITDA, effectively neutralizing the digital assets' operational deficit.

The primary drag on overall profitability remains the Treasury & Corporate segment, which holds the company's proprietary investment portfolio. This basket includes spot digital assets, derivatives, ETFs, venture capital, private equity, and various funds. During the second quarter, this segment recorded an adjusted gross loss of $42 million and an adjusted EBITDA loss of $78 million. Galaxy attributed these figures primarily to unrealized losses on its digital asset holdings and investment positions, which overwhelmed the operational gains from its core businesses.

As of June 30, the net exposure of this investment portfolio stood at $1.16 billion. The largest component was venture capital and fund investments, totaling approximately $606 million. Bitcoin exposure accounted for $400 million, while other tokens represented $76 million. SOL exposure was valued at $58 million, and other liquid assets totaled $19 million. The report clarifies that these exposure figures include spot holdings, derivatives, short positions, wrapped tokens, and other hedging strategies, meaning they do not reflect pure spot inventory levels.

Woofun AI data shows, Balance sheet metrics further illustrate the company's shifting capital structure. Total assets increased by 9%, rising from $9.992 billion to $10.844 billion. Conversely, total equity decreased slightly from $2.779 billion to $2.720 billion. Cash and stablecoin reserves dropped from $2.605 billion to $2.459 billion, reflecting capital deployment into infrastructure.

Meanwhile, the net exposure from digital assets and investments decreased from $1.362 billion to $1.160 billion, signaling a deliberate reduction in speculative risk exposure.

Within the digital assets business, a counterintuitive trend emerged: trading volume declined while profitability rose. Global market operations saw adjusted gross profit jump from $31 million to $49 million, a 58% rise, even as trading volume fell by 7%. The number of counterparties increased from 1,691 to 1,741, and the average loan size remained steady at $1.4 billion. Asset management scale, however, contracted by 12% to $7.1 billion, comprising ETF-related assets of $1.805 billion, alternative assets of $2.553 billion, and staked assets of $2.790 billion.

The most transformative development occurred in western Texas, where Phase 1 of the Helios data center project delivered 200MW of power to CoreWeave, covering 133MW of critical IT load. This delivery initiated rent revenue, marking the first time the data center division became a profit-generating unit. Galaxy projects that Phase 1 will generate approximately $80 million in rental income per quarter starting in the third quarter of 2026, with an adjusted EBITDA margin of over 90%. The core lease term with CoreWeave is 15 years, contracting for 526MW of critical IT load across Phase 3, with estimated annual lease income exceeding $1.2 billion. Data center capital expenditures rose to $448 million from $354 million, and total liabilities for the segment increased from $1.330 billion to $1.548 billion.

To fund future expansion, a Galaxy-affiliated project company completed a private placement of senior secured notes worth $3.5 billion on July 28, due in 2031. These proceeds will finance Phase 2 of Helios, adding 260MW of critical IT capacity expected to begin service in the second quarter of 2027. Galaxy's potential power infrastructure in Texas exceeds 5.7GW, though only 1.6GW is currently approved. Two additional 1GW applications are pending under ERCOT, while newly acquired complexes Merlin, Caspian, and Selene hold potential capacities of 500MW, 700MW, and 900MW respectively, with Merlin initially supported by a 74MW agreement.

Strategically, Galaxy is expanding its product suite beyond infrastructure. New offerings include institutional OTC prediction market trading, GOFR (an on-chain financing interest rate product integrating Aave, Morpho, Spark, and Kamino), and Galaxy Curator, distributed via Fireblocks Earn. The company pledged up to $100 million in capital for priority loss protection on GOFR. Compliance milestones include the May issuance of a BitLicense to GalaxyOne Prime NY by the New York State Department of Financial Services, and an August partnership with BNY for staking support. CEO Mike Novogratz framed this dual strategy around the convergence of on-chain finance and artificial intelligence-driven power demand.