Galaxy Digital’s data center business generated $79 million in lease revenue and $68.7 million in adjusted EBITDA in its first full quarter of operations, but still recorded a $435,000 segment net loss. The results show a substantial operating contribution from the Helios I lease, while interest, depreciation and other adjustments meant that revenue had not yet translated into a net profit. Galaxy’s overall third-quarter earnings were driven mainly by its Treasury & Corporate segment.
Helios I records its first full quarter of lease revenue
The quarter ended Sept. 30 was the first reporting period in which Galaxy recognized a full quarter of revenue under the CoreWeave lease for the first phase of Helios I. All 133 megawatts of critical IT load for that phase had been delivered by the end of the second quarter. Data center lease revenue reached $79 million, compared with the company’s earlier quarterly guidance of about $80 million.
The data center segment posted adjusted EBITDA of $68.746 million and a net loss of $435,000. The measures capture different aspects of performance: adjusted EBITDA excludes financing costs and certain accounting items, so it can help show operating results, but it is neither free cash flow nor the segment’s final profit after relevant costs.
Interest and other adjustments shape reported earnings
Galaxy’s reconciliation from the data center segment’s net loss to adjusted EBITDA included its largest adjustment: $75.439 million for “note interest and other expenses.” This is an accounting adjustment in the reconciliation, not a separately disclosed amount of cash interest paid by the company. The table also included $17.325 million in depreciation and amortization and $785,000 in stock-based compensation and related expenses. Depreciation and stock-based awards are non-cash accounting items.
The reconciliation also showed negative $24.344 million in “other adjustments.” Galaxy’s footnote groups non-operating income and expenses, along with certain items not considered part of ongoing operations, under this heading. It did not provide a separate breakdown of the data center segment’s components. Interest expense alone therefore does not fully explain the difference between adjusted EBITDA and the segment’s net loss.
Galaxy reported third-quarter net income of $322.77 million. Treasury & Corporate contributed $347.935 million in net income, while Digital Assets posted a net loss of $24.728 million and the data center segment lost $435,000. On an adjusted EBITDA basis, the group reported $454.749 million: $395.025 million from Treasury & Corporate, $68.746 million from data centers and a negative $9.022 million from Digital Assets.
In the second quarter, adjusted EBITDA was negative $78 million for Treasury & Corporate, $11 million for data centers and negative $11 million for Digital Assets. The largest quarter-to-quarter change at group level came from Treasury & Corporate. At the same time, the data center business made a markedly larger contribution with a full quarter of lease operations.
Treasury & Corporate houses Galaxy’s digital asset and investment exposures, including spot holdings, derivatives, exchange-traded funds, equities and private investments. At the end of the third quarter, the company held about $1.7 billion in digital assets and investments, up from $1.2 billion at the end of the second quarter. Lease revenue added another source of operating income, but group results remained exposed to fluctuations in investment and digital asset-related activities.
Helios Phase II remains under construction
Beyond the 133-megawatt lease project already in operation, Galaxy is advancing a larger build-out. The company reported $757 million in data center capital expenditure for the third quarter. It said Helios I Phase II was fully financed and under construction, with the first data halls scheduled for delivery in the second quarter of 2027.
The financing includes $3.507 billion of senior secured notes issued by Galaxy Helios Data Centers II LLC, carrying a 9.875% coupon. Galaxy confirmed in its third-quarter results that the issuance had been completed. Proceeds are intended to partly fund two buildings containing eight data halls, as well as a debt service reserve. The project is planned to provide 400 megawatts of utility capacity and 260 megawatts of critical IT capacity. Those figures relate to the future expansion and should not be conflated with the 133 megawatts already delivered.
Cash interest on the notes is payable semiannually, with the first payment scheduled for Feb. 1, 2027. Principal is scheduled to be repaid at 4% of the original amount each year, subject to possible adjustments, with the first repayment due at least 10 months after project completion. The notes mature on Aug. 1, 2031. A direct subsidiary of the issuer, Galaxy Helios II LLC, guarantees the notes, which are secured by first-priority liens on relevant assets and the issuer’s equity, subject to specified exceptions. The offering terms identify the project company as an obligor and do not list Galaxy Digital Inc. as a guarantor.
CoreWeave’s contracts and financial position
CoreWeave’s business growth is relevant to commercial demand at the Helios campus, while the tenant’s operating and financing position is also a factor in assessing the durability of lease revenue. CoreWeave reported second-quarter revenue of $2.575 billion, a net loss of $626 million and net interest expense of $640 million. As of June 30, it had $25.170 billion in non-current recourse debt and $2.385 billion in non-current non-recourse debt.
CoreWeave also disclosed about $104 billion in backlog, a measure that includes remaining performance obligations and other expected future revenue under committed contracts. Realization depends on delivery and service availability. In an update on Sept. 17, the company said it had added more than $25 billion in net commitments early in the third quarter, not included in its backlog figure as of the end of June. It also cited pricing of about $40 million per megawatt for compute contracts with terms of three to six months. That is a metric for CoreWeave’s compute business, not a yield on Galaxy’s data center leases.
Key points to watch are whether lease revenue can support a net profit for the data center segment after financing and other costs, and whether Helios Phase II begins deliveries as scheduled in the second quarter of 2027. Galaxy’s current disclosures do not break out standalone net income for the Phase I project.