• Net loss of $288 million for 4th quarter 2022
• Preliminary 1st quarter 2023incomebeforetax of $150 million
• Focus for 2023: Organic platform build through market downturn, in addition to integrating and scaling recent strategic acquisitions
COMPILED FROM MEDIA REPORTS
NEW YORK— Galaxy Digital Holdings Ltd.
(TSX: GLXY) released financial results March 28 for the year ended December 31, 2022 for both itself and Galaxy Digital Holdings LP. The firm purchased the Dickens County, Texas, assets of Argo Blockchain’s Helios cryptocurrency mining facility on Dec. 28 and has continued work at the site since then. It employs some 40 staff locally.
“2022 was a formative year for Galaxy,” said Michael Novogratz, founder and CEO of Galaxy, “and while we and our industry faced unprecedented macroeconomic events, we succeeded in staying the course and were able to opportunistically take advantage of strategic opportunities to build our operating businesses for the future. I have never been more confident in our go-forward strategy, businesses, and team.' Novogratz said in the release that the company “continues to lead from a position of strength, remaining open for business for our clients and counterparties. And as the market has improved year to date, we have generated approximately $150 million of income before tax while retaining a strong liquidity position through March 24, 2023.”
Following are selected highlights from the company’s financial statements released last week.
• Income before tax was approximately $150 million (this preliminary, unaudited year-to-date financial information is as of March 24, 2023).
• Partners’ capital was over $1.5 billion through the same period.
• The company’s liquidity position remains intact, after recent dislocations in the commercial banking sector. Galaxy had established multiple redundant banking and brokerage relationships prior to the disruption which allowed us to be nimble, and quickly and successfully migrate cash balances. At this time, we're confident in our diversified U.S. banking relationships.
• Galaxy expects to record net profits for the 1st Quarter of 2023 in its operating businesses and positive gains from its balance sheet holdings of liquid coins and investments.
• Galaxy’s trading operating business benefited from heightened market volatility and increased volumes from existing counterparties.
• Galaxy Mining has doubled its capacity from the beginning of the year, as it continues to integrate the Helios site acquired at the end of last year. By the end of 2023, GM expects to have a targeted over 4 EH/s of Hashrate Under Management ('HUM'), approximately 50% of which will come from self-mining.
Select Financial Highlights for the Fourth Quarter and Full Year 2022
•
was $287.8 million for the fourth quarter, compared to net income of $521.3 million in the prior year period. For the year ended December 31, 2022, net loss was $1.0 billion, compared to net income of $1.7 billion for the year ended December 31, 2021.
• Partners' Capital ('Equity') was $1.4 billion at the end of the year, down 45% from $2.6 billion as of the prior year end. The Company maintained a strong liquidity position of $957 million as of December 31, 2022.
Among operating highlights for 4th quarter 2022, the report noted that following the acquisition of Helios, the Galaxy Mining division ended 2022 with over 1.5 EH/s in Hashrate Under Management (“HUM”), inclusive of both self-mining and hosting services. GM has approximately doubled that capacity from the beginning of the year, with approximately 30% from self-mining operations.
• In December 2022, Galaxy acquired the Helios bitcoin mining facility and its related operations from Argo. The facility is currently able to operate up to 180 megawatts of mining capacity, with significant room for expansion. The firm expects to energize approximately 200 MW of mining capacity at Helios alone by year end 2023, with a mix of capacity dedicated to hosting and proprietary mining. The purchase price was approximately $77 million, including transaction costs.
• The company stated that “the Helios transaction will continue to accelerate the expansion of Galaxy Mining’s bitcoin mining operations and services, provide access to tax-efficient mining infrastructure, and reduce reliance on thirdparty hosting providers.”
• Subsequent to year end, Galaxy hedged a majority of Helios' power obligations with a 24x7 fixed price block of power, which protects from rising power prices, improves site uptime, and allows Galaxy to achieve a lower effective cost of power. “Galaxy will layer on additional blocks of power as the site is expanded and wholesale pricing becomes favorable,” the report said.
• As announced during Galaxy’s third quarter earnings call, Galaxy has also begun energization of its first proprietary mining site in Diboll, Texas, with over half the site expected to be energized in April 2023 and the full 16 MW expected to be energized by end of the second quarter 2023.
• GK8 Acquisition:
Subsequent to year end on February 21, 2023, the Company acquired the assets of GK8, a digital asset self-custody platform, for approximately $44 million.
About Galaxy Digital Holdings Ltd.
Galaxy (TSX: GLXY) describes itself as “a digital asset and blockchain leader providing institutions, startups, and qualified individuals access to the crypto economy” with a “full suite of financial services is custom-made for a digitally native ecosystem, spanning multiple synergistic business lines: Trading, Asset Management, Investment Banking, Mining, and Ventures.”
Galaxy’s CEO and founder, Michael Novogratz, leads a team of crypto enthusiasts and institutional veterans working together on a mission to engineer a new economic paradigm, according to its annaul report released this week.
The company is headquartered in New York City, with global offices across North America, Europe, and Asia.
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