Galaxy Digital signals Helios cash flow transformation by mid-2026 while eyeing tokenization expansion
Oct. 21, 2025 5:25 PM ET
AI-Generated Earnings Calls Insights
Earnings Call Insights: Galaxy Digital Inc. (GLXY) Q3 2025
Management View- CEO Michael Novogratz opened by stating, “we had a great quarter... There is a tremendous amount happening in the digital asset space right now. Opportunities, our clients are looking to do things. TradeFi are looking to do things. And so we are at the hunt for talent. We're looking at lots of opportunities. And so I couldn't be more excited.”
- Novogratz highlighted that Galaxy is actively seeking talent to fuel expansion and is prioritizing opportunities in both digital assets and traditional finance, noting the accelerated pace of integration.
- On strategic positioning, Novogratz said “we're hoping to announce some partnerships very soon with traditional TradeFi players, where we're partnering in those infrastructure pieces. And so we're both going to do our own infrastructure and then a lot of partnerships around that.”
- He emphasized the ongoing evolution in the tokenization of assets, with GK8 playing a core role in tokenization technology development and integration with AllUnity.
- Novogratz pointed to the data center business, Helios, as a growing driver, explaining that “the most exciting thing that will happen next year for Galaxy is that by the middle of the year, Helios starts cash flowing.” He projected that 18 months after initial cash flows, Helios could contribute "hundreds of millions of dollars per quarter."
Outlook- Management stated that Helios is expected to begin generating cash flow by the end of Q1 2026 and intends for this to ramp up significantly by year-end. Novogratz explained, “We start cash flowing probably end of the first quarter and -- by the end of the year, it's really cash flowing. And 18 months after that, it's hundreds of millions of dollars per quarter.”
- The company remains focused on building recurring revenue streams, with a goal to increase assets on platform across staking, asset management, and lending.
- Expansion of GalaxyOne into Canada is planned, but not within the next six months, as Zac Prince stated, "we will absolutely be expanding into Canada... but don't expect something there like in the next 6 months."
Financial Results- No new explicit financial metrics were disclosed in the Q3 2025 transcript.
- Management cited ongoing profitability in asset management, highlighting $40 million of fees from DAT activity over several quarters, with Novogratz stating, “we recorded $40 million of fees from our DAT activity over the past several quarters.”
- The CEO noted an increase in assets on platform as a key metric for recurring revenue growth but did not state specific figures.
Q&A- Vinyle asked about revaluation of VC holdings and L3 assets. Novogratz responded, “we have a pricing committee that meets monthly. And certainly quarterly before we put them out, they go through each asset on our balance sheet and they market -- I'd like to think conservatively, but they market what they think is a fair mark.”
- Victor inquired about risk focus and management priorities. Novogratz explained, “I spent a lot of my time thinking about what talent we need and how to recruit that talent... I spent a decent amount of my time telling the Galaxy story.” He also discussed macro and geopolitical risk, emphasizing ongoing vigilance regarding the data center and AI space.
- Tyler Michetti asked about Helios optimization and technology. Novogratz responded, “the interesting thing about being part of the ERCOT grid is you get to draw power from the grid... our applications have the best chance of being approved by them.” He also clarified the potential for tenant diversification once additional power approvals are secured.
- Nguyen Dinh Bao asked about GalaxyOne’s geographic expansion. Zac Prince answered, “we will absolutely be doing that... but don't expect something there like in the next 6 months.”
- Laser asked about DAT fee revenue outlook. Novogratz stated, “I think we were smart and moved fast to get a lot of long-term contracts to manage DAT money. And so that will keep our asset management business busy and profitable for a while.”
Sentiment Analysis- Analysts conveyed a positive and congratulatory tone, with questions focused on operational transparency and future growth, indicating investor optimism.
- Management’s tone was upbeat and confident, particularly regarding Helios and strategic partnerships. Novogratz’s language reflected confidence: “I couldn't be more excited.”
- Compared to the previous quarter, both analysts and management maintained an optimistic tone, but the current call featured more forward-looking excitement about cash flow generation and expansion.
Quarter-over-Quarter Comparison- The current quarter’s discussion centered on Helios’ future cash generation, while the previous quarter emphasized data center expansion and operational buildout.
- There was a shift from operational updates and construction milestones in Q2 to a focus on anticipated financial impact and recurring revenue in Q3.
- Management’s confidence appears to have grown, moving from “excited” about execution to “excited” for imminent transformation in business model with Helios.
- Analysts’ questions transitioned from operational and technical details to broader strategic risks and growth opportunities, reflecting increased confidence in execution.
Risks and Concerns- Novogratz discussed macro risks, including political polarization and the potential for a washout in the AI and data center investment cycle: “All this CapEx that's being spent isn't all going to make money. Some of it will make a ton of money and some of it won't.”
- He flagged ongoing uncertainty about the timing and magnitude of corrections in the data center and AI space, emphasizing the need for active risk management.
- The company is monitoring liquidity risks and is vigilant regarding changes in regulatory clarity, particularly for tokenization and asset management segments.
Final Takeaway
Management underscored that the coming year will be pivotal as Helios transitions to a major cash flow generator, potentially reshaping the company’s financial profile. The company is positioning itself to capitalize on the convergence of digital assets and traditional finance, with recurring revenues as a strategic goal. Talent acquisition, risk management, and infrastructure partnerships remain core to Galaxy Digital’s forward momentum as it navigates both macroeconomic uncertainty and industry evolution.
Read the full Earnings Call Transcript |
