Galaxy Digital's Net Soars 40%, AUM Up 50%: Canaccord Bullish

Galaxy Digital reports 40% net income increase to $422 million, expanding across trading, institutional engagement, and mining.

By Bill Bullington

5/15, 06:31 EDT
Bitcoin / U.S. dollar

Key Takeaway

  • Galaxy Digital (GLXY) reported a 40% increase in net income to $422 million, with positive momentum expected to continue.
  • Trading and asset management saw significant growth, with counterparty trading revenue up 79% and AUM increasing by 50%.
  • Canaccord maintains a buy rating on GLXY, setting a price target of C$17; the stock closed at C$12.41.

Galaxy Digital's Strategic Evolution

Galaxy Digital (GLXY), under the leadership of CEO Mike Novogratz, has reported a significant 40% increase in net income to $422 million from the previous quarter, showcasing the firm's strong performance and strategic business evolution. Canaccord Genuity, in their latest report, highlighted the company's thoughtful and methodical approach to navigating the challenging regulatory landscape while maintaining a compelling competitive position and opportunity set. The firm's trading arm, Galaxy Trading, expanded its counterparty numbers to 1,161, up from 1,052, with counterparty trading revenue soaring by 79% to $66 million, largely fueled by the approval of spot bitcoin ETFs in January.

Expanding Institutional Engagement

The first quarter also saw GalaxyOne gaining traction with over 75 institutional clients and managing more than $1 billion of assets. This growth is pivotal for Galaxy Digital as it aims to offer a comprehensive suite of products including custody, lending, spot trading, hedging, and derivatives to a robust client base. Furthermore, the asset-management business witnessed a 50% increase in assets under management (AUM), reaching $7.8 billion. The acquisition of the self-custody platform GK8 for $44 million last February has also bolstered the firm's infrastructure and GK8 business, doubling its assets under stake to $486 million quarter-on-quarter.

Mining and AI Hosting Opportunities

Galaxy Digital's proprietary mining hashrate increase and the development of the Helios facility underscore the company's strategic diversification. Canaccord Genuity points out that these advancements present Galaxy with unique opportunities to delve into both mining and AI hosting sectors over time. This diversification not only strengthens Galaxy's market position but also aligns with the broader industry's trajectory towards embracing technological innovation and infrastructure expansion.

Street Views

  • Joseph Vafi, Canaccord Genuity (Bullish on Galaxy Digital):

    "Galaxy Digital is evolving its business in a thoughtful and methodical way and, while the regulatory backdrop remains challenging, the company’s opportunity set and competitive positioning remains compelling... We are encouraged to see solid progress in growth and maturation in each of the company’s three operating units coming into view over the next few quarters."