Galaxy Digital posts $216M Q1 loss; Novogratz eyes data centers

Galaxy Digital reported a $216 million net loss for the first quarter as the crypto-focused financial services firm continues to adjust to market conditions and invest in its infrastructure business.

In the quarterly filing, management said the company is shifting emphasis toward expanding its data center operations, which include facilities used for cryptocurrency mining and related services. Galaxy has been increasing capacity, replacing equipment and pursuing upgrades aimed at improving energy efficiency and hash-rate performance.

Company executives said the infrastructure push is intended to diversify revenue beyond trading and asset management by generating more recurring income from hosting and mining contracts for institutional clients. Management noted that these investments will affect short-term profitability while the company brings new capacity online.

The loss reflected swings in digital-asset prices, mining profitability and market liquidity, factors that have produced quarterly fluctuations for firms tied to crypto markets. Galaxy operates trading, asset management, principal investments and mining and data center units.

“It's a transition year,” Novogratz said in the earnings release. He added, “I'm bullish on growth in our data center business.” Investors and analysts will be watching how quickly new data center capacity reaches higher utilization and improves margins.

Galaxy Digital was founded to provide financial services and infrastructure to the digital-asset sector. The company has periodically shifted its focus among business lines as market and regulatory conditions have changed, and current strategy centers on expanding infrastructure to support longer-term revenue stability.