Equity capital was $1.5
billion at the end of the third quarter and $1.6 billion as of October
311
Net loss of $94
million in the third quarter and approximately $124 million of income before tax in
October1
Assets Under Management increased to
$3.9 billion in the third quarter, up
$1.4 billion
quarter-over-quarter2
NEW YORK, Nov. 9, 2023 /CNW/ - Galaxy Digital Holdings Ltd.
(TSX: GLXY) (the "Company" or "GDH Ltd.") today released financial
results for the three and nine months ended September 30, 2023, 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.
Preliminary Financial Highlights, through October 31, 20231
Since the end of the third quarter, digital asset prices
materially changed and our business has benefited from heightened
market volatility and increased trading volumes. Galaxy's income
before tax was approximately $124
million in the month of October, driven primarily by our
market positioning and the appreciation of digital asset prices.
Equity capital increased to approximately $1.6 billion over the same period.
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.
Share Buyback Program: As announced on May 26, 2023, the Company commenced a new normal
course issuer bid on May 31, 2023,
and is eligible to purchase up to 10 million ordinary shares. For
the period between July 1, 2023 and
October 31, 2023, Galaxy repurchased
approximately 1.2 million shares at an average price of CAD
$4.69.
Select Financial
Metrics
|
Q3
2023
|
Q2
2023
|
%
Change
|
Equity
Capital
|
$1,466M
|
$1,542M
|
(5 %)
|
Liquidity
|
$749M
|
$696M
|
8 %
|
Cash & Net
Stablecoins3
|
$395M
|
$468M
|
(16 %)
|
Net Digital
Assets4
|
$354M
|
$228M
|
56 %
|
Net Income
(loss)
|
($94M)
|
($46M)
|
(104 %)
|
Note: Throughout this
document, totals may not sum due to rounding. Quarter-over-quarter
percentage change calculations are based on actual results.
(1) This preliminary, unaudited quarter-to-date financial
information is as of October 31, 2023. Financial results include
impacts of non-cash equity based compensation but exclude
completion of the full quarterly valuation process of our
investment portfolio. This data is subject to change as management
completes its quarterly close procedures.
(2) As compared to the quarter ended June 30, 2023.
(3) Includes Cash Equivalents.
(4) Refer to page 15 of this release for a breakout of our net
digital assets position.
|
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, structured
products, financing, as well as capital markets and M&A
advisory services for corporate clients. GGM operates in two
discrete business units – Trading and Investment Banking.
Trading
Trading reported counterparty trading revenue of
$14 million, down $6 million quarter-over-quarter ("QoQ"). The
decrease was primarily due to record low volatility and market
positioning. Subsequent to quarter-end, our counterparty trading
desk's market positioning benefited from the favorable asset price
movements and significant uptick in volatility and has generated
$24 million of revenue in October.
Despite the decline in revenue QoQ, counterparty trading volumes
increased 70% versus the second quarter and our average loan book
size expanded to $553 million.
Key Performance
Indicators
|
Q3
2023
|
Q2
2023
|
%
Change
|
Loan Book Size
(Average)
|
$553M
|
$507M
|
9 %
|
Counterparty Loan
Originations
|
$117M
|
$115M
|
2 %
|
Counterparty Trading
Volumes QoQ Change
|
70 %
|
(29 %)
|
N.M.
|
Total Trading
Counterparties
|
1,028
|
999
|
3 %
|
Active Trading
Counterparties
|
284
|
291
|
(2 %)
|
Investment Banking
Investment Banking successfully closed two deals in the
quarter, serving as advisor to Gamercraft on its latest investment
round and serving as the exclusive financial advisor to Securitize
in its acquisition of Onramp Invest, both of which we expect to
realize as revenue at a later date. Notably, the team was also
selected to represent Prime Trust in Nevada Receivership as part of
an ongoing restructuring mandate. Galaxy continues to execute
against a pipeline of mandates representing $2.2 billion in potential deal value.
Key Performance
Indicators
|
Q3
2023
|
Q2
2023
|
%
Change
|
Deals
Closed
|
2
|
1
|
100 %
|
Pipeline
|
24
|
23
|
4 %
|
Deal Value of
Pipeline
|
$2.2B
|
$1.0B
|
120 %
|
_____
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 quarter.
Counterparty Loan Originations: market values of all
loans, credit facility draws, and credit facilities originated to
external counterparties in the quarter. Does not include rolled
loans as a new origination; rolled loans can be generally defined
as loans where the maturity was extended but no other material
terms were changed.
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 is in market with.
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 management and performance fees were $4.7 million in the quarter, representing an 11%
increase QoQ. GAM reported preliminary assets under management of
approximately $3.9 billion as of
September 30, 2023, a 58% increase
QoQ. The increase in AUM was primarily driven by net inflows from
new actively managed client mandates that came in at the end of the
quarter. AUM consisted of $768
million in passive strategies, $1,704
million in active strategies and $1,456 million in venture strategies.
Key Performance
Indicators
|
Q3
2023
|
Q2
2023
|
%
Change
|
Management and
Performance Fees
|
$4.7M
|
$4.2M
|
11 %
|
Total
AUM
|
$3,927M
|
$2,489M
|
58 %
|
Passive
AUM
|
$768M
|
$958M
|
(20 %)
|
Active AUM
|
$1,704M
|
$103M
|
1,548 %
|
Venture
AUM
|
$1,456M
|
$1,428M
|
2 %
|
Number of Portfolio
Company Investments1
|
223
|
217
|
3 %
|
(1) Includes
investments held directly on the Partnerships' balance sheet and
indirectly through the Galaxy sponsored funds.
|
_____
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, and fund
of fund products. Changes in AUM are generally the result of
performance, contributions, withdrawals, and acquisitions.
- Preliminary AUM associated with GVH Multi-Strategy FOF LP is
based on management's most recent estimate.
- 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 Alpha strategy and the
management of certain bespoke mandates.
Venture Strategies: organized around two investment
themes: Interactive Ventures and Crypto Ventures.
Galaxy Interactive is GAM's sector-focused venture arm, managing
client capital across three funds. GAM's Crypto
Ventures sleeve invests client capital across two global,
multi-manager venture funds and manages 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 validator services.
Mining
Mining revenue was $14.3
million in the quarter relative to power purchase agreement
and external hosting expenses, net of curtailment credits, of
($2.2 million). We reached 3.9
exahash per second of hashrate under management across our
proprietary and hosted footprint, as we continued to scale our
Helios facility in West Texas. Our
effective power management strategy led to a negative average
marginal cost to mine in the quarter. We expect our average
marginal cost to mine to increase in the fourth quarter relative to
the third and second quarters in anticipation of fewer
opportunities to economically curtail our mining operations and a
higher network hashrate.
Key Performance
Indicators
|
Q3
2023
|
Q2
2023
|
%
Change
|
Mining
Revenue
|
$14.3M
|
$15.4M
|
(7 %)
|
Proprietary Mining
Revenue
|
$8.8M
|
$8.6M
|
3 %
|
Hosted and Other
Mining Revenue1
|
$5.5M
|
$6.8M
|
(19 %)
|
Total Hashrate Under
Management
|
3.9 EH/s
|
3.7 EH/s
|
7 %
|
Proprietary Mining
Hashrate
|
1.8 EH/s
|
1.7 EH/s
|
10 %
|
Hosted Mining
Hashrate
|
2.1 EH/s
|
2.0 EH/s
|
4 %
|
Number of
Proprietary BTC Mined
|
309
|
307
|
1 %
|
Average Marginal
Cost to Mine
|
< $0
|
$9K -$10K
|
N.M.
|
(1) Includes revenue
from hosting clients, leasing agreements and other mining related
activities.
|
Self-Custody and Validator Solutions
Self-Custody and Validator Solutions are focus areas
in our continued commitment to the future of
decentralized networks. This includes supporting the
integrity of protocols and ecosystem projects by operating
validator nodes to secure blockchains, and by offering self-custody
technology solutions to institutions through GK8.
Key Performance
Indicators
|
Q3
2023
|
Q2
2023
|
%
Change
|
GK8 Total Client
Count
|
16
|
15
|
7 %
|
_____
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 rigs.
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 marginal cost of
production for each bitcoin generated during the
period. The calculation excludes depreciation, mark-to-market on
power contracts, and corporate overhead.
GK8 Total Client Count: the total number of clients
contracted to use GK8's technology solutions.
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. During the three months ended
September 30, 2023, an impairment
assessment was required under International Financial Reporting
Standards and GDH Ltd.'s minority interest in GDH LP was marked
down based on the TSX quarter-end closing share price. An
impairment expense of $44.9 million
was recognized during the three months ended September 30, 2023. During the first and second
quarters of 2023, the Company had recognized reversal of impairment
of $128.1 million resulting in net
impairment reversal of $83.2 million
for the nine months ended September 30,
2023.
The net comprehensive income (loss) of GDH Ltd. was
($68.8 million) and $83.2 million for the three and nine months ended
September 30, 2023, respectively.
Earnings Conference Call
An investor conference call will be held today, November 9, 2023, 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 1-844-746-0741, or
1-412-317-5107 (outside the U.S. and Canada). 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
December 9, 2023, 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: 10183468.
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 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 nine months ended September 30, 2023 and (ii) GDH Ltd.'s Management
Discussion and Analysis and Consolidated Financial Statements for
the three and nine months ended September 30, 2023 (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 contains certain pre-released fourth quarter
2023 financial information (the "pre-released financial
information"). The pre-released financial information contained in
this press release is preliminary and represents the most current
information available to management. The Partnership's actual
consolidated financial statements for such period may result in
material changes to the pre-released financial information
summarized in this press release (including by any one financial
metric, or all of the financial metrics) as a result of the
completion of normal quarter and year end accounting procedures and
adjustments and annual independent audit or due to other risks
contained in the Annual Information Form for the year ended
December 31, 2022. Although the
Company believes the expectations reflected in this press release
are based upon reasonable assumptions, the Company can give no
assurance that actual results will not differ materially from these
expectations.
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 (the "Exchange Act")
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, plans for share
repurchases, 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) price and trading volume volatility with respect to the
Company's shares and its impact on share repurchases and the cost
of such repurchases, (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, 2022 available on the
Company's profile at www.sedarplus.ca and its Management's
Discussion and Analysis, filed on November
9, 2023. 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
its impact on share repurchases 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 2023. All rights reserved.
Galaxy Digital Holdings LP's Consolidated Statements of
Financial Position (unaudited)
(in
thousands)
|
September 30,
2023
|
|
December 31,
2022
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
295,001
|
|
$
542,101
|
Digital
assets
|
983,711
|
|
566,690
|
Receivable for digital
asset trades
|
15,184
|
|
9,063
|
Digital asset loans
receivable, net of allowance
|
80,442
|
|
49,971
|
Digital assets
receivables
|
7,528
|
|
12,423
|
Assets posted as
collateral
|
123,499
|
|
25,138
|
Receivables
|
34,565
|
|
10,887
|
Derivative
assets
|
45,442
|
|
17,719
|
Prepaid expenses and
other assets
|
51,566
|
|
32,818
|
Loans
receivable
|
247,276
|
|
62,611
|
Due from related
party
|
6,101
|
|
13,857
|
Total current
assets
|
1,890,315
|
|
1,343,278
|
|
|
|
|
Digital assets
receivables
|
3,537
|
|
5,154
|
Investments (includes
$338.2 and $343.2 million of equity method investments,
respectively)
|
586,513
|
|
595,122
|
Loans receivable,
non-current
|
113,792
|
|
100,977
|
Property and
equipment
|
238,984
|
|
208,538
|
Other non-current
assets
|
106,464
|
|
68,429
|
Goodwill
|
44,257
|
|
24,645
|
Total non-current
assets
|
1,093,547
|
|
1,002,865
|
Total
assets
|
$
2,983,862
|
|
$
2,346,143
|
|
|
|
|
Liabilities and
equity
|
|
|
|
Current
liabilities
|
|
|
|
Investments sold
short
|
37,881
|
|
91
|
Derivative
liabilities
|
39,737
|
|
16,568
|
Accounts payable and
accrued liabilities
|
46,791
|
|
67,081
|
Payables to
customers
|
3,446
|
|
9,591
|
Taxes
payable
|
19,370
|
|
22,717
|
Payable for digital
asset trades
|
18,283
|
|
2,557
|
Digital asset loans
payable
|
272,239
|
|
170,566
|
Loans
payable
|
51,565
|
|
—
|
Collateral
payable
|
520,618
|
|
131,506
|
Due to related
party
|
68,136
|
|
53,984
|
Lease
liability
|
1,763
|
|
4,467
|
Total current
liabilities
|
1,079,829
|
|
479,128
|
|
|
|
|
Notes
payable
|
395,896
|
|
384,515
|
Deferred tax
liability
|
30,889
|
|
31,302
|
Lease
liability
|
11,209
|
|
12,406
|
Total non-current
liabilities
|
437,994
|
|
428,223
|
Total
liabilities
|
1,517,823
|
|
907,351
|
|
|
|
|
Equity
|
|
|
|
Partners'
capital
|
1,466,039
|
|
1,438,792
|
Total
equity
|
1,466,039
|
|
1,438,792
|
|
|
|
|
Total liabilities
and equity
|
$
2,983,862
|
|
$
2,346,143
|
Galaxy Digital Holdings LP's Consolidated Statements of
Income (Loss) and Comprehensive Income (Loss) (unaudited)
|
Three months
ended
|
|
Nine months
ended
|
(in
thousands)
|
September 30,
2023
|
September 30,
2022
|
|
September 30,
2023
|
September 30,
2022
|
Income
|
|
|
|
|
|
Fee revenue
|
$
9,525
|
$
5,919
|
|
$
34,207
|
$
27,895
|
Net realized gain
(loss) on digital assets
|
(67,617)
|
4,715
|
|
18,681
|
128,558
|
Net realized gain
(loss) on investments
|
22,355
|
(8,776)
|
|
68,711
|
64,153
|
Lending and staking
revenue
|
14,005
|
6,395
|
|
35,323
|
31,086
|
Net derivative
gain
|
15,737
|
17,825
|
|
80,462
|
179,821
|
Revenue from
proprietary mining
|
8,848
|
4,224
|
|
20,672
|
21,330
|
Other income
(loss)
|
127
|
2,374
|
|
333
|
4,152
|
|
2,980
|
32,676
|
|
258,389
|
456,995
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
Compensation and
compensation related
|
30,995
|
37,247
|
|
96,247
|
112,447
|
Equity based
compensation
|
18,769
|
27,738
|
|
57,694
|
81,634
|
General and
administrative
|
30,748
|
49,281
|
|
60,934
|
101,389
|
Professional
fees
|
7,911
|
(4,260)
|
|
26,514
|
15,271
|
Interest
|
5,797
|
8,543
|
|
15,670
|
33,417
|
Notes interest
expense
|
6,851
|
7,504
|
|
20,372
|
22,113
|
|
(101,071)
|
(126,053)
|
|
(277,431)
|
(366,271)
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
Net unrealized gain
(loss) on digital assets
|
26,196
|
69,437
|
|
24,451
|
(664,206)
|
Net unrealized gain
(loss) on investments
|
(25,380)
|
(39,299)
|
|
(8,517)
|
(372,318)
|
Net gain (loss) on
notes payable - derivative
|
1,082
|
(1,041)
|
|
(1,022)
|
56,556
|
Net gain on warrant
liability
|
—
|
307
|
|
—
|
20,005
|
Foreign currency gain
(loss)
|
(768)
|
2,579
|
|
(843)
|
3,293
|
Loss attributable to
non-controlling interests liability
|
—
|
(8,857)
|
|
—
|
105,160
|
|
1,130
|
23,126
|
|
14,069
|
(851,510)
|
|
|
|
|
|
|
Loss before income
taxes
|
(96,961)
|
(70,251)
|
|
(4,973)
|
(760,786)
|
Income taxes expense
(benefit)
|
(3,240)
|
(2,357)
|
|
586
|
(26,984)
|
Net
loss
|
$
(93,721)
|
$
(67,894)
|
|
$
(5,559)
|
$
(733,802)
|
|
|
|
|
|
|
Other comprehensive
income (loss)
|
|
|
|
|
|
Foreign currency
translation adjustment
|
$
419
|
$
(222)
|
|
$
3
|
$
(710)
|
|
|
|
|
|
|
Net comprehensive
loss
|
$
(93,302)
|
$
(68,116)
|
|
$
(5,556)
|
$
(734,512)
|
|
Three months
ended
|
|
Nine months
ended
|
|
September 30,
2023
|
September 30,
2022
|
|
September 30,
2023
|
September 30,
2022
|
GDH LP Net loss per
unit:
|
|
|
|
|
|
Basic
|
$
(0.29)
|
$
(0.21)
|
|
$
(0.02)
|
$
(2.24)
|
Diluted
|
(0.29)
|
(0.21)
|
|
(0.02)
|
(2.29)
|
Weighted average
units:
|
|
|
|
|
|
Basic
|
322,656,584
|
326,187,757
|
|
321,154,802
|
327,599,342
|
Diluted
|
322,656,584
|
386,187,757
|
|
323,154,802
|
342,921,483
|
Reportable segments (unaudited)
Income and expenses by each reportable segment of GDH LP for the
three months ended September 30, 2023
are as follows:
(in
thousands)
|
Global
Markets
|
Asset
Management
|
Digital
Infrastructure
Solutions
|
Corporate
and
Other
|
Totals
|
Income
(loss)
|
|
|
|
|
|
Fee
revenue(1)
|
$
51
|
$
4,686
|
$
5,589
|
$
(801)
|
$
9,525
|
Net realized loss on
digital assets
|
(67,232)
|
(385)
|
—
|
—
|
(67,617)
|
Net realized gain on
investments
|
22,001
|
354
|
—
|
—
|
22,355
|
Lending and staking
revenue
|
13,821
|
184
|
—
|
—
|
14,005
|
Net derivative
gain
|
15,667
|
—
|
70
|
—
|
15,737
|
Revenue from
proprietary mining
|
—
|
—
|
8,848
|
—
|
8,848
|
Other income
(loss)
|
75
|
32
|
199
|
(179)
|
127
|
|
(15,617)
|
4,871
|
14,706
|
(980)
|
2,980
|
|
|
|
|
|
|
Operating
expenses(2)
|
43,510
|
12,131
|
21,933
|
23,497
|
101,071
|
|
|
|
|
|
|
Net unrealized gain
(loss) on digital assets
|
26,919
|
(723)
|
—
|
—
|
26,196
|
Net unrealized loss on
investments
|
(4,052)
|
(20,949)
|
(379)
|
—
|
(25,380)
|
Net gain on notes
payable - derivative
|
—
|
—
|
—
|
1,082
|
1,082
|
Foreign currency
loss
|
(768)
|
—
|
—
|
—
|
(768)
|
|
22,099
|
(21,672)
|
(379)
|
1,082
|
1,130
|
|
|
|
|
|
|
Loss before income
taxes
|
$
(37,028)
|
$
(28,932)
|
$
(7,606)
|
$
(23,395)
|
$
(96,961)
|
Income tax
benefit
|
—
|
—
|
—
|
(3,240)
|
(3,240)
|
Net
loss
|
$
(37,028)
|
$
(28,932)
|
$
(7,606)
|
$
(20,155)
|
$
(93,721)
|
Foreign currency
translation adjustment
|
—
|
—
|
—
|
419
|
419
|
Net comprehensive
loss
|
$
(37,028)
|
$
(28,932)
|
$
(7,606)
|
$
(19,736)
|
$
(93,302)
|
(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.
|
(2)
|
Within Digital
Infrastructure Solutions, mining expenses include a $6 million
reduction in the fair value of our Power Purchase Agreement
("PPA").
|
Income and expenses by each reportable segment of GDH LP for the
nine months ended September 30, 2023
are as follows:
(in
thousands)
|
Global
Markets
|
Asset
Management
|
Digital
Infrastructure
Solutions
|
Corporate
and
Other
|
Totals
|
Income
(loss)
|
|
|
|
|
|
Fee
revenue(1)
|
$
2,262
|
$
13,833
|
$
20,323
|
$
(2,211)
|
$
34,207
|
Net realized gain on
digital assets
|
14,261
|
4,420
|
—
|
—
|
18,681
|
Net realized gain on
investments
|
46,100
|
22,611
|
—
|
—
|
68,711
|
Lending and staking
revenue
|
33,853
|
1,470
|
—
|
—
|
35,323
|
Net derivative gain
(loss)
|
78,985
|
1,542
|
(65)
|
—
|
80,462
|
Revenue from
proprietary mining
|
—
|
—
|
20,672
|
—
|
20,672
|
Other income
(loss)
|
210
|
(131)
|
254
|
—
|
333
|
|
175,671
|
43,745
|
41,184
|
(2,211)
|
258,389
|
|
|
|
|
|
|
Operating
expenses(2)
|
126,613
|
42,109
|
38,995
|
69,714
|
277,431
|
|
|
|
|
|
|
Net unrealized gain
(loss) on digital assets
|
25,476
|
(1,025)
|
—
|
—
|
24,451
|
Net unrealized gain
(loss) on investments
|
13,079
|
(27,868)
|
6,272
|
—
|
(8,517)
|
Net loss on notes
payable - derivative
|
—
|
—
|
—
|
(1,022)
|
(1,022)
|
Foreign currency
loss
|
(843)
|
—
|
—
|
—
|
(843)
|
|
37,712
|
(28,893)
|
6,272
|
(1,022)
|
14,069
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
$
86,770
|
$
(27,257)
|
$
8,461
|
$
(72,947)
|
$
(4,973)
|
Income tax
expense
|
—
|
—
|
—
|
586
|
586
|
Net income
(loss)
|
$
86,770
|
$
(27,257)
|
$
8,461
|
$
(73,533)
|
$
(5,559)
|
Foreign currency
translation adjustment
|
—
|
—
|
—
|
3
|
3
|
Net comprehensive
income (loss)
|
$
86,770
|
$
(27,257)
|
$
8,461
|
$
(73,530)
|
$
(5,556)
|
(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.
|
(2)
|
Within Digital
Infrastructure Solutions, mining expenses include a $6 million
reduction in the fair value of our PPA in the third quarter whereas
a $5.6 million unrealized gain on the PPA was recorded in the
second quarter. In the first and second quarters, we also realized
a non-recurring impairment reversal on mining equipment, which
lowered non-cash operating expenses by $12.5 million.
|
Income and expenses by each reportable segment of GDH LP for the
three months ended September 30, 2022 are as follows:
(in
thousands)
|
Global
Markets
|
Asset
Management
|
Digital
Infrastructure
Solutions
|
Corporate
and
Other
|
Totals
|
Income
(loss)
|
|
|
|
|
|
Fee revenue
|
$
1,234
|
$
3,374
|
$
1,311
|
$
—
|
$
5,919
|
Net realized gain
(loss) on digital assets
|
27,164
|
(22,449)
|
—
|
—
|
4,715
|
Net realized loss on
investments
|
(8,230)
|
(546)
|
—
|
—
|
(8,776)
|
Lending and staking
revenue
|
6,104
|
291
|
—
|
—
|
6,395
|
Net derivative
gain
|
17,825
|
—
|
—
|
—
|
17,825
|
Revenue from
proprietary mining
|
—
|
—
|
4,224
|
—
|
4,224
|
Other income
(loss)
|
(384)
|
895
|
—
|
1,863
|
2,374
|
|
43,713
|
(18,435)
|
5,535
|
1,863
|
32,676
|
|
|
|
|
|
|
Operating
expenses
|
39,608
|
14,657
|
40,517
|
31,271
|
126,053
|
|
|
|
|
|
|
Net unrealized gain on
digital assets
|
10,504
|
58,933
|
—
|
—
|
69,437
|
Net unrealized gain
(loss) on investments
|
5,485
|
(44,169)
|
(615)
|
—
|
(39,299)
|
Net loss on notes
payable - derivative
|
—
|
—
|
—
|
(1,041)
|
(1,041)
|
Net gain on warrant
liability
|
—
|
—
|
—
|
307
|
307
|
Foreign currency
gain
|
2,579
|
—
|
—
|
—
|
2,579
|
Gain attributable to
non-controlling interests liability
|
—
|
(8,857)
|
—
|
—
|
(8,857)
|
|
18,568
|
5,907
|
(615)
|
(734)
|
23,126
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
$
22,673
|
$
(27,185)
|
$
(35,597)
|
$
(30,142)
|
$
(70,251)
|
Income tax
benefit
|
—
|
—
|
—
|
(2,357)
|
(2,357)
|
Net income
(loss)
|
$
22,673
|
$
(27,185)
|
$
(35,597)
|
$
(27,785)
|
$
(67,894)
|
Foreign currency
translation adjustment
|
—
|
—
|
—
|
(222)
|
(222)
|
Net comprehensive
income (loss)
|
$
22,673
|
$
(27,185)
|
$
(35,597)
|
$
(28,007)
|
$
(68,116)
|
Income and expenses by each reportable segment of GDH LP for the
nine months ended September 30, 2022 are as follows:
(in
thousands)
|
Global
Markets
|
Asset
Management
|
Digital
Infrastructure
Solutions
|
Corporate
and
Other
|
Totals
|
Income
(loss)
|
|
|
|
|
|
Fee revenue
|
$
11,567
|
$
11,143
|
$
5,185
|
$
—
|
$
27,895
|
Net realized gain
(loss) on digital assets
|
(64,941)
|
193,499
|
—
|
—
|
128,558
|
Net realized gain
(loss) on investments
|
(11,408)
|
75,561
|
—
|
—
|
64,153
|
Lending and staking
revenue
|
30,570
|
516
|
—
|
—
|
31,086
|
Net derivative
gain
|
179,821
|
—
|
—
|
—
|
179,821
|
Revenue from
proprietary mining
|
—
|
—
|
21,330
|
—
|
21,330
|
Other income
|
235
|
2,034
|
—
|
1,883
|
4,152
|
|
145,844
|
282,753
|
26,515
|
1,883
|
456,995
|
|
|
|
|
|
|
Operating
expenses
|
133,893
|
47,878
|
55,200
|
129,300
|
366,271
|
|
|
|
|
|
|
Net unrealized loss on
digital assets
|
(182,121)
|
(482,085)
|
—
|
—
|
(664,206)
|
Net unrealized loss on
investments
|
(102,527)
|
(244,116)
|
(25,675)
|
—
|
(372,318)
|
Net gain on notes
payable - derivative
|
—
|
—
|
—
|
56,556
|
56,556
|
Net gain on warrant
liability
|
—
|
—
|
—
|
20,005
|
20,005
|
Foreign currency
gain
|
3,293
|
—
|
—
|
—
|
3,293
|
Loss attributable to
non-controlling interests liability
|
—
|
105,160
|
—
|
—
|
105,160
|
|
(281,355)
|
(621,041)
|
(25,675)
|
76,561
|
(851,510)
|
|
|
|
|
|
|
Loss before income
taxes
|
$
(269,404)
|
$
(386,166)
|
$
(54,360)
|
$
(50,856)
|
$
(760,786)
|
Income tax
benefit
|
—
|
—
|
—
|
(26,984)
|
(26,984)
|
Net
loss
|
$
(269,404)
|
$
(386,166)
|
$
(54,360)
|
$
(23,872)
|
$
(733,802)
|
Foreign currency
translation adjustment
|
—
|
—
|
—
|
(710)
|
(710)
|
Net comprehensive
loss
|
$
(269,404)
|
$
(386,166)
|
$
(54,360)
|
$
(24,582)
|
$
(734,512)
|
Assets and liabilities by reportable segment of GDH LP as
of September 30, 2023 are as
follows:
(in
thousands)
|
Global
Markets
|
Asset
Management
|
Digital
Infrastructure
Solutions
|
Corporate
and Other
|
Totals
|
Total
assets
|
$
2,093,543
|
$
521,198
|
$
328,760
|
$
40,361
|
$
2,983,862
|
|
|
|
|
|
|
Total
liabilities
|
$
946,545
|
$
153
|
$
2,247
|
$
568,878
|
$
1,517,823
|
Assets and liabilities by reportable segment of GDH LP as
of December 31, 2022 are as
follows:
(in
thousands)
|
Global
Markets
|
Asset
Management
|
Digital
Infrastructure
Solutions
|
Corporate
and Other
|
Totals
|
Total
assets
|
$
1,476,489
|
$
536,061
|
$
251,624
|
$
81,969
|
$
2,346,143
|
|
|
|
|
|
|
Total
liabilities
|
$
338,336
|
$
1,084
|
$
10,519
|
$
557,412
|
$
907,351
|
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 September 30, 2023 and December 31, 2022 are as follows:
(in
thousands)
|
As of
September 30,
2023
|
|
As of December
31,
2022
|
Assets
|
|
|
|
Digital
assets
|
$
983,711
|
|
$
566,690
|
Bitcoin(1)
|
472,431
|
|
222,229
|
Ether(1)
|
227,396
|
|
54,219
|
USDC
|
131,228
|
|
199,479
|
USDT
|
111,216
|
|
62,267
|
All other
|
41,440
|
|
28,496
|
Digital asset loans
receivable, net of allowance
|
80,442
|
|
49,971
|
Digital assets
receivable, current
|
7,528
|
|
12,423
|
Digital assets
receivable, non-current
|
3,537
|
|
5,154
|
Assets posted as
collateral (2)
|
120,696
|
|
25,138
|
|
1,195,914
|
|
659,376
|
Liabilities
|
|
|
|
Digital asset loans
payable
|
272,239
|
|
170,566
|
Collateral payable
(2)
|
469,234
|
|
73,458
|
|
741,473
|
|
244,024
|
Digital assets,
net
|
$
454,441
|
|
$
415,352
|
Stablecoins,
net
|
$
99,968
|
|
$
281,048
|
Digital assets, net
excl. stablecoins
|
$
354,473
|
|
$
134,304
|
(1)
|
September 30, 2023
balances include associated tokens such as wBTC, wETH and
stETH.
|
(2)
|
Excludes cash portion
of consolidated balance on the Partnership's balance
sheet.
|
All figures are in U.S. Dollars unless
otherwise noted.
SOURCE Galaxy Digital Holdings Ltd.