Galaxy Digital (GLXY) Q1 FY26 earnings call: guidance and Q&A

Are tightening spreads for stabilized assets and strained syndicate financing for large deals impacting Galaxy's go-forward financing strategy for data centers?

Chris Ferraro confirmed tightening spreads for stabilized assets. He noted a shift from bank syndicates to the high-yield bond market, which offers a more distributed investor base and flexible capital. He expressed constructive views on financing opportunities due to tightened spreads and rating agencies recognizing the long-lived nature of their infrastructure.

“We've pretty much seen -- things could change, but we've pretty much seen spreads tighten across the board, and that's come from a peak of sort of concern around build-outs, CapEx budgets, credit quality. And spreads have come in pretty significantly.”

asked by Peter Christiansen · answered by Christopher Ferraro

Is the 830MW capacity for separate tenants, not an extension of the CoreWeave agreement?

Mike Novogratz clarified that his earlier comments about deals getting done referred to new projects outside Helios, not the 830MW. Chris Ferraro added that while they always talk to CoreWeave, they are focused on a multi-tenant strategy for the 830MW to diversify their client base.

“I think you missed -- either I misspoke or you misheard me. What I was saying is on the 830, we're engaged in lots of conversations. And then on new projects outside of [ Helios ], we are -- as Chris said in his remarks, we're LOI stage.”

asked by Patrick Moley · answered by Michael Novogratz

What is the risk appetite among crypto trading clients, and when is it expected to stabilize or inflect given recent price appreciation?

Mike Novogratz noted that overall crypto trading volumes were down 25% last quarter, but Galaxy was flat. He sees a transition from old holders selling to broad retail buying (via ETFs) and some sovereign funds. He believes catalysts like the "Clarity Act" and Fed rate cuts are needed for broader crypto excitement, but the infrastructure itself is being used to trade other assets.

“I think what we're seeing is this transition from people that held crypto for 5, 10, 15 years. taking some profit, selling some of theirs, and that's being replaced by a broad retail buying base.”

asked by James Yaro · answered by Michael Novogratz

Clarification on whether the 830MW is subject to the new ERCOT batch process, and assessment of gaining incremental approvals for additional capacity.

Chris Ferraro confirmed that the original 100MW and the 830MW capacity are not at risk from the new regulatory landscape, as they meet the criteria for "baseload" projects not subject to re-study. The additional 1.8 gigawatts is what's in question regarding timing, with ERCOT still working through specifics of the new batch process.

“Next, the [ 830 ] megawatts approved earlier this year, we're equally confident in that. I think in my comments, we talked a little bit about the draft [ PGR 145 role ] which sets baseload category for projects that are not subject to [ reset ], not subject to looking at.”

asked by James Faucette · answered by Christopher Ferraro

How will lease economics for the 830MW compare to the CoreWeave deal, and should we expect similar headline metrics?

Chris Ferraro explained that credit quality of the tenant is a key factor. While the CoreWeave deal's headline rent was a standout, the net economics (after financing costs) for new deals are expected to be equally attractive on a risk-adjusted basis, considering the value of Helios and the importance of a diversified client base.

“While a headline dollars per kW per month rent rate is an important metric, sort of the net after financing cost spread capture of any deal we signed for us is probably more -- is more important.”

asked by Bill Papanastasiou · answered by Christopher Ferraro

Why did the lending book decline, and how is it being managed in the current environment?

Chris Ferraro attributed the 20% decline to digital asset price depreciation (as a percentage of the book is crypto-denominated), client de-risking, and the natural roll-off of a few large, low-risk loans. He emphasized the priority of not losing money and rebuilding the book smartly with a more diverse client base, seeing wide open opportunities in on-chain lending.

“I think the #1 KPI is that we don't lose money, we don't lose our money, we don't lose shareholder money, we don't lose client money, counterparty money.”

asked by Christopher Brendler · answered by Christopher Ferraro

Are parent guarantees from hyperscalers being considered for financing Phase 1/2, and any updated thoughts on splitting the data center business?

Chris Ferraro stated that "all options are on the table" for financing, acknowledging the value of such guarantees. He reiterated that the end tenant for Phase 1 is a multi-trillion dollar IG public company, providing comfort. On splitting the business, he said there's no update, but management recognizes the different capital structures and earnings potential, suggesting it's "more of a debate for us around the end of the year than it is today."

“Our posture on that is the same as it's always been. It is from a management time and focus perspective, myself, Mike, Tony, the whole crew are equally focused on building both businesses, we're involved in building both businesses.”

asked by John Peterson · answered by Christopher Ferraro