Galaxy Digital's Data Center Profit Measure Rises Sharply on Helios Rent

what happened

Galaxy Digital's data center division lifted adjusted EBITDA to $68.7 million in the third quarter from $11.5 million in the prior quarter, according to figures published by theenergymag.com from the company's financial supplement. Leasing revenue climbed to $79.1 million from $18.9 million, roughly in line with the company's earlier estimate of about $80 million a quarter. CoreWeave is the main tenant at the Helios site in Texas, which Galaxy bought from Argo Blockchain in December 2022 for $65 million when it was still a bitcoin mining operation.

The segment still posted a bottom-line loss. It recorded a net loss of $435,000, against a $31.2 million profit in the second quarter that had been helped by a tax benefit. Interest on notes rose to $75.4 million from $7.4 million, and depreciation and amortization reached $17.3 million. Capital spending hit $757 million in the quarter, up 69% from $448 million.

Galaxy describes the second phase of Helios I as fully financed and on schedule and budget. The project subsidiary issued about $3.5 billion of senior secured notes in July, carrying a 9.875% coupon and maturing in 2031. The company is also in talks with prospective tenants for 830 MW of approved power capacity at Helios II that has not yet been leased.

why it matters

For Galaxy, rent from AI computing tenants is gradually replacing its former mining model at the site, but higher interest costs and heavy construction spending still constrain cash flow and reported earnings.

market impact

Galaxy Digital shares: rising rent income is offset by higher interest costs and the segment's net loss

• ↔Galaxy Digital shares mixed — rising Helios rent offset by higher debt interest and the segment's net loss

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