Galaxy Announces Second Quarter 2024 Financial Results
Equity capital was $2.1 billion as of June 30, 2024
Net loss of $177 million for the second quarter, driven primarily by net losses on digital assets and investments as a result of a decline in digital asset markets
Net income of $245 million for the six months ended June 30, 2024, driven by strong operating performance and positive digital asset markets
Assets Under Stake of $3.3 billion as of July 18, 2024, up from $486 million at the end of March 2024
NEW YORK, Aug. 1, 2024 /CNW/ - Galaxy Digital Holdings Ltd. (TSX: GLXY) (the "Company" or "GDH Ltd.") today released financial results for the three months and six months ended June 30, 2024, for both itself and Galaxy Digital Holdings LP (the "Partnership" or "GDH LP"). In this press release, a reference to "Galaxy", "we", "our" and similar words refer to GDH Ltd., its subsidiaries and affiliates including GDH LP, or any one of them, as the context requires.
Corporate Updates
US Listing and Reorganization: Galaxy continues to work on completing its proposed reorganization and domestication to become a Delaware-incorporated company and subsequently list on the Nasdaq, upon completion of ongoing SEC review and subject to stock exchange, shareholder and applicable regulatory approvals of such transactions. On July 26, 2024, Galaxy filed an amendment to its registration statement responding to SEC comments, which is under review.
CryptoManufaktur Acquisition: On July 19, 2024, Galaxy announced that it acquired the assets of CryptoManufaktur ("CMF"), a blockchain node operator that provides trusted, secure services to decentralized protocols across the digital asset ecosystem. The addition of CMF brings approximately $1 billion in Ether assets under stake ("AUS"), raising the Company's total AUS to $3.3 billion as of July 18, 2024. As part of the transaction, CMF's seasoned three-person engineering team, led by founder Thorsten Behrens, joined Galaxy's Blockchain Infrastructure team, which provides staking and validator services to investors, protocols, and digital asset platforms.
Select GDH LP Financial Metrics Q2 2024 Q1 2024 Q/Q % Change
Equity Capital
$2,129M
$2,192M (3) %
Liquidity
$1,328M
$1,499M (11) %
Cash & Net Stablecoins(1)
$409M
$163M 150 %
Net Digital Assets Excluding Stablecoins(2)
$501M
$821M (39) %
Spot Bitcoin ETFs
$418M
$515M (19) %
Net Income (loss) ($177M)
$422M N.M.(3)
Book Value Per Share in CAD4
$8.45 CAD
$9.11 CAD (7) %
Note: Throughout this document, totals may not sum due to rounding. Quarter-over-quarter and year-over-year percentage change
calculations are based on unrounded results.
(1)
Includes Cash Equivalents.
(2)
Refer to page 15 of this release for a breakout of our net digital assets position.
(3)
Abbreviation for "Not Meaningful".
(4) Calculated as equity capital divided by outstanding Class A and Class B Units multiplied by the end of period foreign exchange rate.
Galaxy Global Markets
Galaxy Global Markets ("GGM") offers institutional-grade expertise and access to a broad range of digital asset products, including digital asset spot and derivatives trading, financing, capital markets and M&A advisory services to a diversified client base. GGM operates in two discrete business units - Trading and Investment Banking.
Trading
Trading reported counterparty trading revenue of $24 million in the second quarter. The decrease was primarily driven by lower trading volumes, which decreased by 19% quarter-over-quarter ("QoQ"), and unfavorable asset price movements. Despite the QoQ decrease, our counterparty trading business generated approximately $90 million in revenue year-to-date through June, a nearly 80% increase relative to the first half of 2023. Galaxy's average loan book size expanded to $699 million, driven by increased borrowing demand from both new and existing counterparties. Galaxy continues to onboard new counterparties, including large traditional institutions, and ended the second quarter with 1,212 total trading counterparties.
Key Performance Indicators Q2 2024 Q1 2024 Q/Q % Change
Counterparty Trading Revenue
$24M
$66M (64) %
Loan Book Size (Average)
$699M
$664M 5 %
Total Trading Counterparties 1,212 1,161 4 %
Active Trading Counterparties 294 281 5 %
Investment Banking
Investment Banking successfully closed two deals in the second quarter, serving as the exclusive financial advisor to Toposware in its sale to Polygon and to another client on its strategic financing. In the quarter, Galaxy also served as the exclusive financial advisor to Bitstamp in its pending sale to Robinhood, which is expected to close in the first half of 2025 at which time Galaxy expects to recognize the revenue associated with this deal. Galaxy is executing against a pipeline of mandates representing $2.1 billion in potential deal value.
Key Performance Indicators Q2 2024 Q1 2024 Q/Q % Change
Deals Closed 2 1 100 %
Pipeline 19 20 (5) %
Deal Value of Pipeline
$2.1B
$2.2B (5) %
____
KEY TERMS
Counterparty Trading Revenue: revenue from counterparty-facing activities from our Derivatives, Credit, Over-the-Counter Trading, and Quantitative Trading businesses, net of associated funding charges.
Loan Book Size (Average): average market value of all open loans, un-funded arrangements to finance delayed trading/settlement (for example over weekends), and uncommitted credit facilities in the period.
Active Trading Counterparties: counterparties with whom we have traded within the past 12 months and who are still onboarded with Galaxy's trading business.
Pipeline: the number of open engagements and transactions the Investment Banking team has in market.
Deal Value of Pipeline: the theoretical aggregate deal value associated with the Investment Banking pipeline.
Galaxy Asset Management
Galaxy Asset Management ("GAM") provides investors access to the digital asset ecosystem via a diverse suite of institutional-grade investment vehicles that span passive, active, and venture strategies.
GAM reported assets under management ("AUM") of approximately $4.6 billion and management and performance fees of $14.5 million in the second quarter, down 42% and 19% QoQ respectively, primarily driven by the continued successful liquidation of assets associated with an ongoing opportunistic mandate to unwind portfolios on behalf of the FTX estate and market depreciation. In the quarter, GAM announced a collaboration with State Street Global Advisors to develop a suite of manager-directed digital asset ETFs that will offer investors exposure to companies in the digital asset space, going beyond crypto and bitcoin. Subsequent to quarter-end, GAM, in partnership with Invesco, announced the launch of the Invesco Galaxy Ethereum ETF (ticker: QETH). GAM conducted a $113 million initial close for Galaxy Ventures Fund I LP at the end of June, a venture capital fund focused on investing in early-stage companies across crypto protocols, software infrastructure, and financialized applications.
Key Performance Indicators Q2 2024 Q1 2024 Q/Q % Change
Management and Performance Fees
$14.5M
$17.8M (19) %
Total AUM(1)
$4,563M
$7,818M (42) %
Passive AUM
$2,392M
$2,730M (12) %
Active AUM(2)
$632M
$3,584M (82) %
Venture AUM
$1,539M
$1,504M 2 %
(1) In Galaxy's monthly AUM disclosures, the "funds" line item consists of AUM held in GAM's Passive, Active, and Venture funds, excluding opportunistic assets. Total AUM for Q1 2024 was updated from what
was previously reported as AUM for quarterly close vehicles are reported as of the most recent information available for the applicable period.
(2) Includes opportunistic AUM. "Opportunistic" AUM are near-term or mid-term engagements to unwind portfolios managed by GAM. Opportunistic AUM was $520M as of June 30, 2024 and $3,440M as of March 31,
2024.
____
KEY TERMS
Assets Under Management: all figures are unaudited. AUM is inclusive of sub-advised funds, committed capital closed-end vehicles, seed investments by affiliates, affiliated and unaffiliated separately managed accounts, engagements to unwind portfolios, and fund of fund products. Changes in AUM are generally the result of performance, contributions, withdrawals, liquidations and opportunistic mandate wins.
-- AUM for committed capital closed-end vehicles that have completed their
investment period is reported as NAV (Net Asset Value) plus unfunded
commitment.
-- AUM for quarterly close vehicles is reported as of the most recent
quarter available for the applicable period.
-- AUM for affiliated separately managed accounts is reported as NAV as of
the most recently available estimate for the applicable period.
Passive Strategies: single- and multi-asset private funds, as well as a suite of regulated spot digital asset exchange-traded funds offered through partnerships with asset managers globally.
Active Strategies: Galaxy's Liquid Crypto Fund and the management of certain opportunistic mandates.
Venture Strategies: organized around two investment themes: Interactive Ventures and Crypto Ventures. Galaxy Interactive invests at the intersection of content, technology, and social commerce, managing client capital across three funds. GAM's Crypto Ventures sleeve includes Galaxy's inaugural crypto venture fund, which is focused on investing in early-stage companies across crypto protocols, software infrastructure, and financialized applications, as well as two global, multi-manager venture funds and a subset of Galaxy's balance sheet venture investments.
Galaxy Digital Infrastructure Solutions
Galaxy Digital Infrastructure Solutions ("GDIS") consists of proprietary and hosted bitcoin mining services, GK8 self-custody technology solutions, and blockchain infrastructure.
Mining
Mining revenue was $24.0 million for the second quarter, relative to power purchase costs and external hosting expenses, net of curtailment credits, of $10.5 million, resulting in a 56% direct mining profit margin. The QoQ decrease in revenue was primarily driven by the Bitcoin halving in April. Currently, Galaxy has 200 megawatts of energized mining capacity and is bringing on an additional 300 megawatts of high-voltage capacity in the third quarter of 2025. Galaxy has firm capacity approval from both the Electric Reliability Council of Texas and the Wind Energy Transmission of Texas to scale up to 800 megawatts of power from the existing interconnect. In the first quarter, we expanded our campus by purchasing an additional 160 acres adjacent to Helios. We now have a total of 320 acres of contiguous land and have submitted additional load studies and a new interconnection request that are pending approval.
Key Performance Indicators Q2 2024 Q1 2024 Q/Q % Change
Mining Revenue
$24.0M
$31.5M (24) %
Proprietary Mining Revenue
$16.3M
$20.1M (19) %
Hosted and Other Mining Revenue(1)
$7.7M
$11.4M (32) %
Total Hashrate Under Management 5.6 EH/ 5.7 EH/
s s (3) %
Proprietary Mining Hashrate 2.9 EH/ 3.1 EH/
s s (5) %
Hosted Mining Hashrate 2.6 EH/ 2.6 EH/
s s (1) %
Number of Proprietary BTC Mined 242 373 (35) %
Average Marginal Cost to Mine <$22.5K <$19.5K N.M.
(1) Includes revenue from hosting clients and other mining
related activities.
Blockchain Infrastructure and GK8
Blockchain Infrastructure and GK8 continue to build and invest in the technology that powers the digital assets ecosystem. Blockchain Infrastructure expanded its Assets Under Stake by 341% QoQ to $2.1 billion as of June 30th, with Galaxy growing to become one of the largest validators globally on the Solana network. As of July 18, 2024, AUS grew to $3.3 billion with the addition of approximately $1 billion in Ether AUS from the acquisition of CMF. GK8 continues to execute against its pipeline of enterprise clients.
Key Performance Indicators Q2 2024 Q1 2024 Q/Q % Change
Assets Under Stake
$2,144M
$486M 341 %
GK8 Total Client Count 22 21 5 %
_____
KEY TERMS
Hashrate Under Management: the total combined hashrate of active proprietary and hosted mining capacity managed by Galaxy.
Proprietary Mining Hashrate: the hashrate attributed to Galaxy owned and operated mining machines.
Hosted Mining Hashrate: the hashrate attributed to third-party machines operated by Galaxy for a client.
Number of Proprietary BTC Mined: the total amount of bitcoin mined from proprietary mining operations.
Average Marginal Cost to Mine: the average marginal cost of production for each bitcoin generated during the period. The calculation excludes depreciation, mark-to-market on power contracts, and corporate overhead.
Assets Under Stake: all figures are unaudited. AUS reflects the total notional value of assets bonded to Galaxy validators, based on prices as of the end of the specified period. This includes certain Galaxy balance sheet assets, Galaxy affiliate assets, and third party assets.
GK8 Total Client Count: the total number of clients contracted to use GK8's technology solutions.
Summary of Operating Expenses
Operating expenses Q2 2024 Q1 2024 Q/Q % Change
Compensation and compensation related
$43M
$42M 1 %
Equity based compensation
$12M
$18M (36) %
General and administrative
$45M
$48M (6) %
Mining costs
$10M
$15M (31) %
Trading and commission expense
$4M
$6M (35) %
Technology
$7M
$6M 13 %
Depreciation and amortization
$14M
$11M 18 %
Impairment reversal
$0M
$0M N.M.
Other
$9M
$8M 13 %
Professional fees
$14M
$13M 2 %
Staking costs
$32M
$1M N.M.
Interest
$21M
$20M 5 %
Notes interest expense
$7M
$7M 1 %
Note: Quarter-over-quarter percentage change calculations are based on
unrounded results.
Overview of Second Quarter Operating Expenses:
-- Compensation and compensation related expenses of $43 million were
roughly flat QoQ.
-- Equity based compensation decreased by approximately $6 million QoQ,
primarily driven by fully vested high-priced equity grants issued in
2021, partially offset by new grants issued in 2022, 2023 and 2024 at
lower share prices.
-- General and administrative expenses declined by approximately $3 million
from the first quarter of 2024, driven by lower mining costs and trading
and commission expenses, partially offset by higher depreciation and
amortization costs.
-- Mining costs decreased by approximately $5 million QoQ; reflecting
our actively managed power strategy, leading to a reduction in
electricity costs.
-- Trading commission expenses decreased by approximately $2 million
QoQ, on account of lower trading volumes in the quarter.
-- Depreciation and amortization expenses increased by over $2 million
QoQ, reflecting the additional depreciation from new mining machines
and electrical infrastructure that were energized during the prior
quarter.
-- Professional fees of $14 million were slightly up QoQ.
-- Staking costs was a new line item this quarter, and reflected the
staking rewards that Galaxy generates from its AUS, which were paid to
the delegators. This amount offsets the staking rewards received, which
were included in the Lending and Staking revenue.
-- Interest expense of $21 million was up approximately $1 million QoQ,
reflecting our ability to source non-dilutive wholesale financing to
help fund our Trading and Lending businesses and consistent with our
risk management principles of sound Asset and Liability Management and
maintaining substantial liquidity buffers.
GDH Ltd.'s Financial Highlights
As the only significant asset of GDH Ltd. is its minority interest in GDH LP, its results are driven by the results of GDH LP. GDH Ltd. accounts for its investment in this associate (GDH LP) using the equity method. The investment, initially recorded at cost, is increased or decreased to recognize GDH Ltd.'s share of the earnings and losses of GDH LP. The net comprehensive income (loss) of GDH Ltd. was $(49.4) million for the three months ended June 30, 2024 and $60.6 million for the six months ended June 30, 2024.
Earnings Conference Call
An investor conference call will be held today, August 1, 2024, at 8:30 AM Eastern Time. A live webcast with the ability to ask questions will be available at: https://investor.galaxy.com/. The conference call can also be accessed by investors in the United States or Canada by dialing 1-800-274-8461, or 1-203-518-9814 (outside the U.S. and Canada) using the Conference ID: GALAXY. A replay of the webcast will be available and can be accessed in the same manner as the live webcast on the Company's Investor Relations website. Through September 1, 2024, the recording will also be available by dialing 1-844-512-2921, or 1-412-317-6671 (outside the U.S. and Canada) and using the passcode: 11156334.
About Galaxy Digital Holdings Ltd. (TSX: GLXY) ("GDH Ltd.") and Galaxy Digital Holdings LP ("GDH LP")
Galaxy (TSX: GLXY) is a digital asset and blockchain leader providing access to the growing digital economy. We serve a diversified client base, including institutions, startups, and qualified individuals. Since 2018, Galaxy has been building a holistic financial platform spanning three complementary operating businesses: Global Markets, Asset Management, and Digital Infrastructure Solutions. Our offerings include, amongst others, trading, lending, strategic advisory services, institutional-grade investment solutions, proprietary bitcoin mining and hosting services, network validator services, and the development of enterprise self-custodial technology. The company is headquartered in New York City, with global offices across North America, Europe, and Asia. Additional information about Galaxy's businesses and products is available on www.galaxy.com.
This press release should be read in conjunction with (i) GDH LP's Management Discussion and Analysis and Consolidated Financial Statements for the three and six months ended June 30, 2024 and (ii) GDH Ltd.'s Management Discussion and Analysis and Consolidated Financial Statements for the three and six months ended June 30, 2024 (together, the "Consolidated Financial Statements" and "MD&As"), which have been filed on SEDAR at www.sedarplus.ca.
Disclaimers and Additional Information
The TSX has not approved or disapproved of the information contained herein. The Ontario Securities Commission has not passed upon the merits of the disclosure record of Galaxy.
This press release is not an offer to buy or sell, nor is it a solicitation of an offer to buy or sell, interests in the fund or any advisory services or any other security or to participate in any advisory services or trading strategy. If any offer and sale of securities is made, it will be pursuant to the confidential offering memorandum of the fund (the Offering Memorandum or fund prospectus ("Prospectus")). Any decision to make an investment in the fund should be made after reviewing such Offering Memorandum or Prospectus, conducting such investigations as the investor deems necessary and consulting the investor's own investment, legal, accounting and tax advisors in order to make an independent determination of the suitability and consequences of an investment.
No Offer or Solicitation
As previously announced, the Company intends to complete its proposed reorganization and domestication to become a Delaware-based company, and subsequently list on the Nasdaq, upon completion of the SEC's ongoing review and subject to stock exchange approval of such listing. The proposed reorganization and domestication is subject to approval by shareholders the Company and applicable regulatory authorities, including the Toronto Stock Exchange. In connection with the proposed reorganization and domestication, the Company has filed a registration statement, including a management information circular/prospectus, with the SEC, which has not yet become effective. SHAREHOLDERS ARE ADVISED TO READ THE FINAL VERSIONS OF SUCH DOCUMENTS, WHEN AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Shareholders may obtain a free copy of the registration statement (including the management information circular/prospectus) and any other relevant documents from the SEC's website at http://www.sec.gov. Copies of the final versions of such documents can also be obtained, when available, without charge, via Galaxy's investor relations website: https://investor.galaxy.com/ The Company anticipates holding a shareholder meeting to seek approval following the effectiveness of the registration statement, and further details will be included in the management information circular to be mailed to shareholders and posted on the Company's SEDAR profile at www.sedarplus.ca.
This document shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the domestication or any of the other proposed reorganization transactions. This document does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote of approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.
CAUTION ABOUT FORWARD-LOOKING STATEMENTS
The information in this document may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934, as amended and "forward-looking information" under Canadian securities laws (collectively, "forward-looking statements"). Our forward-looking statements include, but are not limited to, statements regarding our or our management team's expectations, hopes, beliefs, intentions or strategies regarding the future. Statements that are not historical facts, including statements about Galaxy's business pipelines for banking and Gk8, mining goals, focus on self custody and validator solutions and our commitment to the future of decentralized networks and the pending domestication and the related transactions (the "transactions"), and the parties, perspectives and expectations, are forward-looking statements. In addition, any statements that refer to estimates, projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "intend," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. The forward-looking statements contained in this document are based on our current expectations and beliefs concerning future developments and their potential effects on us taking into account information currently available to us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks include, but are not limited to: (1) the inability to complete the proposed domestication and reorganization transactions, due to the failure to obtain shareholder and stock exchange approvals, or otherwise; (2) changes to the proposed structure of the transactions that may be required or appropriate as a result of applicable laws or regulations or as a condition to obtaining shareholder or stock exchange approval of the transactions; (3) the ability to meet and maintain listing standards following the consummation of the transactions; (4) the risk that the transactions disrupt current plans and operations; (5) costs related to the transactions, operations and strategy; (6) changes in applicable laws or regulations; (7) the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; (8) changes or events that impact the cryptocurrency industry, including potential regulation, that are out of our control; (9) the risk that our business will not grow in line with our expectations or continue on its current trajectory; (10) the possibility that our addressable market is smaller than we have anticipated and/or that we may not gain share of it; and (11) the possibility that there is a disruption in mining impacting our ability to achieve expected results or change in power dynamics impacting our results, (12) any delay or failure to consummate the business mandates or achieve its pipeline goals in banking and Gk8, (13) liquidity or economic conditions impacting our business (14) regulatory concerns, technological challenges, cyber incidents or exploits on decentralized networks (15) those other risks contained in the Annual Information Form for the year ended December 31, 2023 available on the Company's profile at www.sedarplus.ca and its Management's Discussion and Analysis, filed on August 1, 2024. Factors that could cause actual results to differ materially from those described in such forward-looking statements include, but are not limited to, a decline in the digital asset market or general economic conditions; the possibility that our addressable market is smaller than we have anticipated and/or that we may not gain share of the stated addressable market; the failure or delay in the adoption of digital assets and the blockchain ecosystem; a delay or failure in developing infrastructure for our business or our businesses achieving our banking and Gk8 mandates; delays or other challenges in the mining business related to hosting, power or our mining infrastructure; any challenges faced with respect to decentralized networks, considerations with respect to liquidity and capital planning and changes in applicable law or regulation and adverse regulatory developments. Should one or more of these risks or uncertainties materialize, they could cause our actual results to differ materially from the forward-looking statements. We are not undertaking any obligation to update or revise any forward looking statements whether as a result of new information, future events or otherwise. You should not take any statement regarding past trends or activities as a representation that the trends or activities will continue in the future. Accordingly, you should not put undue reliance on these statements.
©Copyright Galaxy Digital 2024. All rights reserved.
Galaxy Digital Holdings LP's Consolidated Statements of Financial Position (unaudited)
(in thousands) June 30, 2024 December 31, 2023
Assets
Current assets
Cash and cash equivalent $314,033 $316,610
Digital assets 1,954,398 1,078,587
Receivable for digital asset trades 26,907 41,339
Digital assets loans receivable, net of allowance 177,230 104,504
Digital assets receivables 44,576 14,686
Investments (includes $45.1 million and $0 of equity method investments, respectively) 508,380
Assets posted as collateral 203,942 318,195
Receivables 25,840 15,983
Derivative assets 153,470 173,209
Prepaid expenses and other assets 27,780 37,910
Loans receivable, net of allowance 404,991 377,105
Due from related party 31,891 5,007
Total current assets 3,873,438 2,483,135
Digital assets receivables 3,854 6,174
Investments (includes $394.8 million and $290.4 million of equity method investments, respectively) 800,315 735,103
Restricted digital assets 15,863 41,356
Digital asset loans receivable, non-current 12,881
Loans receivable, non-current 10,259
Property and equipment 267,431 259,965
Other non-current assets 107,284 95,000
Goodwill 44,257 44,257
Total non-current assets 1,251,885 1,192,114
Total assets $5,125,323 $3,675,249
Liabilities and equity
Current liabilities
Investments sold short 115,240 25,295
Derivative liabilities 118,770 160,642
Accounts payable and accrued liabilities 73,118 69,212
Payable to customers 94,816 3,503
Taxes payable 12,636 25,936
Payable for digital asset trades 34,751 4,176
Digital assets loans payable 950,178 398,277
Loans payable 211,384 93,069
Collateral payable 811,656 581,362
Due to related party 87,403 67,953
Lease liability 3,960 3,860
Total current liabilities 2,513,912 1,433,285
Notes payable 427,679 408,053
Deferred tax liability 46,734 33,894
Lease liability 8,271 10,236
Total non-current liabilities 482,684 452,183
Total liabilities 2,996,596 1,885,468
Equity
Partners' capital 2,128,727 1,789,781
Total equity 2,128,727 1,789,781
Total liabilities and equity $5,125,323 $3,675,249
Galaxy Digital Holdings LP's Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) (unaudited)
(in thousands) Three months ended Six months ended
June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
Income
Fee revenue $26,483 $11,097 $54,611 $25,526
Net realized gain (loss) on digital assets (161,738) 20,179 108,660 86,298
Net realized gain (loss) on investments 12,826 48,334 (160,008) 46,356
Lending and staking revenue 54,371 10,809 84,309 21,318
Net derivative gain 105,322 9,641 188,962 64,725
Revenue from proprietary mining 16,312 8,563 36,440 10,980
Other income 140 43 475 206
53,716 108,666 313,449 255,409
Operating expenses
Compensation and compensation related 42,921 34,632 85,397 65,252
Equity based compensation 11,601 15,655 29,590 38,925
General and administrative 44,721 14,742 92,777 29,647
Mining costs 10,452 (130) 25,638 5,830
Trading and commission expense 4,112 2,341 10,434 3,285
Technology 7,356 4,599 13,852 8,994
Depreciation and amortization 13,505 7,318 24,932 11,765
Impairment reversal (5,932) (11,914)
Other 9,296 6,546 17,921 11,687
Professional fees 13,704 8,785 27,077 18,603
Staking costs 32,034 308 32,696 539
Interest 20,927 4,334 40,775 9,873
Notes interest expense 7,040 6,790 14,016 13,521
(172,948) (85,246) (322,328) (176,360)
Other
Net unrealized gain (loss) on digital assets 42,900 (4,774) 139,713 (1,745)
Net unrealized gain (loss) on investments (114,314) (65,850) 121,538 16,863
Net loss on notes payable - derivative (2,573) (799) (12,286) (2,104)
Foreign currency gain (loss) 1,474 63 1,353 (75)
(72,513) (71,360) 250,318 12,939
Income before income taxes (191,745) (47,940) 241,439 91,988
Income taxes expense (benefit) (14,736) (1,900) (3,216) 3,826
Net income for the period $(177,009) $(46,040) $244,655 $88,162
Other comprehensive income
Foreign currency translation adjustment 1,724 $39 1,089 (416)
Comprehensive income for the period $(175,285) $(46,001) $245,744 $87,746
Three months ended Six months ended
June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
GDH LP Net income (loss) per unit:
Basic $(0.52) $(0.14) $0.74 $0.28
Diluted (0.52) (0.14) 0.70 0.27
Weighted average units:
Basic 338,212,221 321,392,562 331,685,773 320,391,466
Diluted 338,212,221 321,392,562 350,414,148 327,417,371
Reportable segments (unaudited)
Income and expenses by each reportable segment of GDH LP for the three months ended June 30, 2024 are as follows:
(in thousands) Global Asset Digital Corporate Totals
Markets Management Infrastructure
Solutions and Other
Income (loss)
Fee revenue(1)
Mining hosting fees
$ -
$ - $7,775
$ - $7,775
Licensing fees 612 (120) 492
Management and performance fees 3,694 14,535 (734) 17,495
Advisory fees 721 721
Total fee revenue 4,415 14,535 8,387 (854) 26,483
Lending and staking revenue
Lending income 16,012 8 16,020
Blockchain rewards 578 3,808 37,497 (3,532) 38,351
Total lending and staking revenue 16,590 3,808 37,497 (3,524) 54,371
Net realized gain on digital assets (178,808) 16,274 796 (161,738)
Net realized gain (loss) on investments 10,206 2,620 12,826
Net derivative gain 105,550 (228) 105,322
Revenue from proprietary mining 16,312 16,312
Other income (4) 33 111 140
Total revenues and gain (loss) from operations (42,051) 37,270 62,875 (4,378) 53,716
Operating expenses 68,604 13,781 69,230 21,333 172,948
Net unrealized gain on digital assets 136,323 (86,685) (6,738) 42,900
Net unrealized gain (loss) on investments (81,230) (34,369) 1,285 (114,314)
Net loss on notes payable - derivative (2,573) (2,573)
Foreign currency loss 1,474 1,474
56,567 (121,054) (5,453) (2,573) (72,513)
Income (loss) before income taxes $(54,088) $(97,565) $(11,808) $(28,284) $(191,745)
Income tax expense (14,736) (14,736)
Net income (loss) $(54,088) $(97,565) $(11,808) $(13,548) $(177,009)
Foreign currency translation adjustment 1,724 1,724
Comprehensive income (loss) $(54,088) $(97,565) $(11,808) $(11,824) $(175,285)
(1) Asset Management fee revenue includes management fees generated off the Partnership's balance sheet venture investments. Licensing fees are attributable to GK8, and include license fees paid by the
Partnership for the use of GK8's technology. All intercompany transactions are eliminated in the Corporate & Other segment.
Income and expenses by each reportable segment of GDH LP for the six months ended June 30, 2024 are as follows:
(in thousands) Global Asset Digital Corporate Totals
Markets Management Infrastructure
Solutions and Other(1)
Income (loss)
Fee revenue (1)
Mining hosting fees
$ -
$ - $17,916
$ - 17,916
Licensing fees 1 1,419 (240) 1,180
Management and performance fees 3,694 32,372 (1,481) 34,585
Advisory fees 930 930
Total fee revenue 4,625 32,372 19,335 (1,721) 54,611
Lending and staking revenue
Lending income 32,756 5 2 12 32,775
Blockchain rewards 5,660 11,046 43,575 (8,747) 51,534
Total lending and staking revenue 38,416 11,051 43,577 (8,735) 84,309
Net realized gain on digital assets 91,497 16,367 796 108,660
Net realized gain (loss) on investments (173,323) 13,315 (160,008)
Net derivative gain 188,095 867 188,962
Revenue from proprietary mining 36,440 36,440
Other income 153 33 289 475
149,463 73,138 101,304 (10,456) 313,449
Operating expenses 133,033 29,585 110,110 49,600 322,328
Net unrealized gain on digital assets 184,582 (41,358) (3,511) 139,713
Net unrealized gain (loss) on investments 98,480 23,108 (50) 121,538
Net loss on notes payable - derivative (12,286) (12,286)
Foreign currency loss 1,353 1,353
284,415 (18,250) (3,561) (12,286) 250,318
Income (loss) before income taxes $300,845 $25,303 $(12,367) $(72,342) $241,439
Income tax expense (3,216) (3,216)
Net income (loss) $300,845 $25,303 $(12,367) $(69,126) $244,655
Foreign currency translation adjustment 1,089 1,089
Comprehensive income (loss) $300,845 $25,303 $(12,367) $(68,037) $245,744
(1) Asset Management fee revenue includes management fees generated off the Partnership's balance sheet venture investments. Licensing fees are attributable to GK8, and include license fees paid by the
Partnership for the use of GK8's technology. All intercompany transactions are eliminated in the Corporate & Other segment.
Income and expenses by each reportable segment of GDH LP for the three months ended June 30, 2023 are as follows:
(in thousands) Global Asset Digital Corporate Totals
Markets Management Infrastructure
Solutions and Other
Income (loss)
Fee revenue (1)
Mining hosting fees 6,548 $6,548
Licensing fees 610 610
Management and performance fees 4,216 (762) 3,454
Advisory fees 57 57
Other fee revenues 428 428
Total fee revenue 57 4,216 7,586 (762) 11,097
Lending and staking revenue
Lending income 9,990 9 9,999
Blockchain rewards (706) 1,516 810
Total lending and staking revenue 9,284 1,525 10,809
Net realized gain on digital assets 17,601 2,578 20,179
Net realized gain (loss) on investments 23,725 24,609 48,334
Net derivative gain 8,769 1,008 (136) 9,641
Revenue from proprietary mining 8,563 8,563
Other income (expense) 96 (96) 11 32 43
Total revenues and gain (loss) from operations 59,532 33,840 16,024 (730) 108,666
Operating expenses 40,894 13,790 7,748 22,814 85,246
Net unrealized gain (loss) on digital assets (1,067) (3,707) (4,774)
Net unrealized gain on investments (23,726) (45,532) 3,408 (65,850)
Net loss on notes payable - derivative (799) (799)
Foreign currency loss 63 63
(24,730) (49,239) 3,408 (799) (71,360)
Income (loss) before income taxes $(6,092) $(29,189) $11,684 $(24,343) $(47,940)
Income tax expense (1,900) (1,900)
Net income (loss) $(6,092) $(29,189) $11,684 $(22,443) $(46,040)
Foreign currency translation adjustment 39 39
Comprehensive income (loss) $(6,092) $(29,189) $11,684 $(22,404) $(46,001)
(1) Asset Management fee revenue includes management fees generated off the Partnership's balance sheet venture investments, which are eliminated in
the Corporate & Other segment.
Income and expenses by each reportable segment of GDH LP for the six months ended June 30, 2023 are as follows:
(in thousands) Global Asset Digital Corporate Totals
Markets Management Infrastructure
Solutions and Other
Income (loss)
Fee revenue (1)
Mining hosting fees
$ -
$ - $12,816
$ - $12,816
Licensing fees 790 790
Management and performance fees 9,148 (1,382) 7,766
Advisory fees 2,265 2,265
Other fee revenues (54) 1,943 1,889
Total fee revenue 2,211 9,148 15,549 (1,382) 25,526
Lending and staking revenue
Lending income 19,078 17 19,095
Blockchain rewards 707 1,516 2,223
Total lending and staking revenue 19,785 1,533 21,318
Net realized gain on digital assets 82,633 3,665 86,298
Net realized gain (loss) on investments 24,099 22,257 46,356
Net derivative gain 63,319 1,542 (136) 64,725
Revenue from proprietary mining 10,980 10,980
Other income (expense) 134 (163) 55 180 206
Total revenues and gain (loss) from operations 192,181 37,982 26,448 (1,202) 255,409
Operating expenses 83,103 29,978 17,062 46,217 176,360
Net unrealized gain (loss) on digital assets (1,744) (1) (1,745)
Net unrealized gain on investments 16,647 (6,435) 6,651 16,863
Net loss on notes payable - derivative (2,104) (2,104)
Foreign currency loss (75) (75)
14,828 (6,436) 6,651 (2,104) 12,939
Income (loss) before income taxes $123,906 $1,568 $16,037 $(49,523) $91,988
Income tax expense 3,826 3,826
Net income (loss) $123,906 $1,568 $16,037 $(53,349) $88,162
Foreign currency translation adjustment (416) (416)
Comprehensive income (loss) $123,906 $1,568 $16,037 $(53,765) $87,746
(1) Asset Management fee revenue includes management fees generated off the Partnership's balance sheet venture investments, which are eliminated in
the Corporate & Other segment.
Assets and liabilities by reportable segment of GDH LP as of June 30, 2024 are as follows:
(in thousands) Global Asset Digital Corporate Totals
Markets Management Infrastructure and Other
Solutions
Total assets $3,972,284 $643,731 $351,145 $158,163 $5,125,323
Total liabilities $2,356,282 $1,250 $10,055 $629,009 $2,996,596
Assets and liabilities by reportable segment of GDH LP as of December 31, 2023 are as follows:
(in thousands) Global Asset Digital Corporate Totals
Markets Management Infrastructure and Other
Solutions
Total assets $2,726,950 $575,056 $321,322 $51,921 $3,675,249
Total liabilities $1,289,792 $10,968 $9,817 $574,891 $1,885,468
Select statement of financial position information
Select assets by reporting segment of GDH LP as of June 30, 2024 is as follows:
(in thousands) Global Asset Digital Corporate Totals
Markets Management Infrastructure and Other
Solutions
Digital assets $1,925,574 $44,687
$ -
$ - $1,970,261
Digital assets receivables 12,241 35,253 936 48,430
Assets posted as collateral 203,942 203,942
Loans receivable 595,102 595,102
Investments 764,285 532,084 12,326 1,308,695
Property and equipment 260,258 7,173 267,431
$3,501,144 $612,024 $273,520 $7,173 $4,393,861
Select assets by reporting segment of GDH LP as of December 31, 2023 is as follows:
(in thousands) Global Asset Digital Corporate Totals
Markets Management Infrastructure and Other
Solutions
Digital assets $1,052,013 $67,930
$ -
$ - $1,119,943
Digital assets receivables 6,506 13,135 1,219 20,860
Assets posted as collateral 318,195 318,195
Loans receivable 491,868 491,868
Investments 244,807 476,262 14,034 735,103
Property and equipment 109 252,552 7,304 259,965
$2,113,498 $557,327 $267,805 $7,304 $2,945,934
Net Digital Assets Position
Net digital assets includes all digital assets categorized as assets, less all digital assets categorized as liabilities on the statement of financial position and is included in the Company's liquidity measure. Net digital assets as of June 30, 2024 and December 31, 2023 is as follows:
(in thousands) BTC (3) ETH (4) Stablecoin Other (5) As of
June 30, 2024
Assets
Digital assets $1,202,920 $344,110 $236,122 $171,246 $1,954,398
Digital asset loans receivable, net of allowance 16,656 28,612 118,733 26,110 190,111
Digital assets receivable, current 44,576 44,576
Digital assets receivable, non-current 3,854 3,854
Assets posted as collateral - Digital assets(1) 163,950 28,594 1,429 193,973
Restricted digital assets, non-current(2) 15,863 15,863
1,383,526 401,316 354,855 263,078 2,402,775
Liabilities
Digital asset loans payable 620,602 57,089 242,529 29,958 950,178
Collateral payable(1) 584,957 145,166 17,807 14,621 762,551
Payables to customers 94,586 94,586
1,300,145 202,255 260,336 44,579 1,807,315
Digital assets, net $83,381 $199,061 $94,519 $218,499 595,460
Stablecoins, net
$ -
$ - $94,519
$ - 94,519
Digital assets, net excl. stablecoins $83,381 $199,061
$ - $218,499 $500,941
Bitcoin spot ETFs included in Investments 418,068 418,068
(1)
Excludes cash portion of balance on the Partnership's statement of financial position.
(2)
Represents TIA and SOL tokens that are subject to a sale restriction of greater than one year.
(3) Includes associated tokens such as wBTC. The Partnership also held interests in investment vehicles designed to hold BTC, including Galaxy sponsored BTC funds and Mt. Gox Investment Fund LP, valued at
$129.1 million as of June 30, 2024 reflected in the investments balance in addition to the digital assets noted above. The Partnership also held bitcoin derivative positions not reflected above in
addition to the noted bitcoin investment vehicles.
(4) Includes associated tokens such as wETH and stETH. The Partnership also held interests in investment vehicles designed to hold ETH, including Galaxy sponsored ETH funds, valued at $42.3 million as of
June 30, 2024 reflected in the investments balance in addition to the digital assets noted above. The Partnership also held Ether derivative positions not reflected above in addition to the noted Ether
investment vehicles.
(5) Includes $43.6 million net SOL and $45.3 million net TIA. The Partnership also held an interest in investment vehicles designed to hold SOL, the Galaxy sponsored Galaxy Digital Crypto Vol Fund LLC valued
at $91.4 million as of June 30, 2024 reflected in the investments balance in addition to the digital assets noted above, and the Partnership held digital asset derivative positions not reflected above
in addition to the noted investment vehicle.
(in thousands) BTC (4) ETH (5) Stablecoin Other (5) As of December
31, 2023
Assets
Digital assets $589,011 $174,978 $179,222 $135,376 $1,078,587
Digital asset loans receivable, net of allowance 3,044 87,252 12,000 2,208 104,504
Digital assets receivable, current 14,686 14,686
Digital assets receivable, non-current 6,174 6,174
Assets posted as collateral - Digital assets(1) 197,092 119,012 316,104
Restricted digital assets, non-current(2) 41,356 41,356
789,147 381,242 191,222 199,800 1,561,411
Liabilities
Digital asset loans payable 48,202 14,603 297,762 37,710 398,277
Collateral payable(1) 437,889 116,723 9,457 5,926 569,995
486,091 131,326 307,219 43,636 968,272
Digital assets, net $303,056 $249,916 $(115,997) $156,164 593,139
Stablecoins, net(3)
$ -
$ - $(115,997)
$ - (115,997)
Digital assets, net excl. stablecoins $303,056 $249,916
$ - $156,164 $709,136
Bitcoin spot ETFs included in Investments
$ -
$ -
$ -
$ -
$ -
(1)
Excludes cash portion of balance on the Partnership's statement of financial position.
(2)
Represents TIA tokens that are subject to a sale restriction of greater than one year.
(3)
As of December 31, 2023, stablecoin liabilities were greater than stablecoin assets.
(4) Includes associated tokens such as wBTC. The Partnership also held interests in investment vehicles designed to hold BTC, including ProShares Bitcoin Strategy ETF, Galaxy sponsored BTC funds, and Mt. Gox
Investment Fund LP, valued at $123.1 as of December 31, 2023 reflected in the investments balance in addition to the digital assets noted above. The Partnership also held bitcoin derivative positions
not reflected above in addition to the noted bitcoin investment vehicles.
(5) Includes associated tokens such as wETH and stETH. The Partnership also held interests in investment vehicles designed to hold ETH, including Galaxy sponsored ETH funds, valued at $22.1 million as of
December 31, 2023 reflected in the investments balance in addition to the digital assets noted above. The Partnership also held Ethereum derivative positions not reflected above in addition to the noted
Ethereum investment vehicles.
(6)
Includes $12.0 million net SOL and $68.5 million net TIA. The Partnership also held digital asset derivative positions not reflected above.
All figures are in U.S. Dollars unless otherwise noted.
SOURCE Galaxy Digital Holdings Ltd.
