Net income of $134
million for the first quarter 2023, income before tax and
non-cash equity compensation of $163
million1
Ended the first quarter 2023 with a strong
liquidity position of $814
million
Re-segmented financial reporting into three
complementary operating businesses: Galaxy Global Markets, Galaxy
Asset Management and Galaxy Digital Infrastructure
Solutions
Entered into a strategic alliance with DWS to
develop digital asset management solutions in Europe
NEW
YORK, May 9, 2023 /CNW/ - Galaxy Digital
Holdings Ltd. (TSX: GLXY) ("Galaxy", the "Company" or "GDH Ltd.")
today released financial results for the three months ended
March 31, 2023 for both itself and
Galaxy Digital Holdings LP (the "Partnership" or "GDH LP").
"Galaxy's globally diversified platform and longstanding
commitment to promoting the responsible adoption of digital assets
is resonating with clients more than ever before. Our first quarter
2023 results are a validation of the investments we have made in
our business to drive long-term growth and lead the evolution of
the digital asset industry," said Michael
Novogratz, Founder and CEO of Galaxy.
"The power of our business model is most evident in times of
uncertainty, and clients are relying on Galaxy for our
comprehensive Global Markets capabilities, leading Asset Management
platform, and unique Digital Infrastructure Solutions to help them
meet their long-term goals. We enter the second quarter of 2023
extremely well positioned to grow our market share and build deeper
relationships with our clients and partners."
Select Financial Highlights for
the First Quarter 2023
- Net income was $134
million for the first quarter, compared to a net loss of
$288 million for the quarter ended
December 31, 2022.
-
- Income before tax and non-cash equity compensation was
$163 million in the first
quarter.1
- The income was primarily attributable to gains on digital
assets and unrealized gains on investments.
- Gains on derivatives of $55
million in the quarter were driven by our quantitative and
client facing derivative trading desks.
- Partners' Capital ("Equity") was $1.6 billion at the end of the quarter, up 11%
from $1.4 billion for the quarter
ended December 31, 2022. The Company
maintained a strong liquidity position of $814 million as of March
31, 2023.
-
- Liquidity included $400 million
in cash and $414 million in net
digital assets2, including $209
million of non-algorithmic stablecoins.
- Cash and stablecoin balances were $214 million lower from year end primarily due to
a larger amount of outstanding fiat loans, the payment for the GK8
acquisition and investments.
_____________________________________
|
1 Income
before tax and non-cash equity compensation is a non-GAAP financial
measure, which represents the Partnership's net income adjusted to
add back income taxes of $5.7 million and equity compensation of
$23.3 million. Management utilizes this measure in operational
decision-making. It provides investors with additional information
in comparing the Partnership's performance against the previously
disclosed projections. Income before tax and non-cash equity
compensation is not a standardized financial measure under the
financial reporting framework used to prepare Galaxy's financial
statements and might not be comparable to similar financial
measures disclosed by other issuers.
|
2 Please see
page 12 of this release for a breakout of our net digital assets
position.
|
Re-Segmented Financial Reporting
Overview
Beginning the first quarter, Galaxy re-segmented its financial
reporting into three complementary operating businesses: Galaxy
Global Markets ("GGM"), Galaxy Asset Management ("GAM"), and Galaxy
Digital Infrastructure Solutions ("GDIS"). Investments made using
balance sheet capital that were managed outside of our venture team
are now captured in their applicable re-segmented vertical. The
primary changes made are as follows:
- Galaxy Global Markets consists of Trading and Investment
Banking, which were standalone businesses prior to the first
quarter.
- Galaxy Asset Management consists of passive, active and
venture investment strategies. The business now includes select
venture investments that were historically captured as Principal
Investments.
- Galaxy Digital Infrastructure Solutions consists of
proprietary and hosted bitcoin mining services, the
newly acquired GK8 technology and self-custody capabilities and
validator services.
For more detail on these changes, please see page 3 of the
Partnership's First Quarter 2023 Management's Discussion &
Analysis.
Operating Highlights for the First
Quarter 2023
Galaxy Global Markets ("GGM")
- Trading reported $129.9
million of income within the quarter, a 257% increase
quarter-over-quarter ("QoQ")3, driven primarily by net
gains on digital assets and derivatives.
-
- Cumulative counterparty-facing trading operational net
revenue4 within the quarter was approximately
$38 million, up approximately 110%
QoQ, driven primarily by derivatives and over-the-counter
trading.
- Trading ended the quarter with more than 280 active
counterparties.5 The business onboarded more than 30 new
counterparties in the quarter, bringing the total count to over
960.
- Counterparty trading volumes increased by approximately 85%
QoQ.
- The value of Galaxy's counterparty loan book size was
approximately $500 million, an over
15% increase QoQ.
- Cumulative gross counterparty loan originations were
approximately $300 million in the
quarter.
- Investment Banking reported $2.2
million of income within the quarter, a 9% increase
QoQ.
-
- Galaxy continues to execute against an active pipeline of
mandates representing over $1 billion
in potential transaction value.
- Within the quarter, Galaxy advised Pantera, a leading
blockchain asset management firm, on the sale of its stake in
European digital assets exchange, Bitstamp, to Ripple Labs.
Galaxy Asset Management ("GAM")
- Asset Management reported $4.7
million of income within the quarter, a 49% decrease
QoQ.
-
- GAM reported preliminary assets under management
("AUM")6 of approximately $2.4
billion, a 40% increase QoQ. The increase was primarily
driven by the migration of $343
million of venture assets that were historically captured as
Principal Investments into GAM, partially offset by net outflows
from our passive strategies. AUM consisted of nearly $844 million in passive strategies, approximately
$108 million in active strategies and
approximately $1.4 billion in venture
strategies.
- Subsequent to quarter end, GAM entered into a strategic
alliance with DWS, one of the world's leading asset managers, with
the aim of initially developing a comprehensive suite of
exchange-traded products on certain digital assets in Europe.
- GAM holds investments in more than 220 portfolio companies
across our venture platform.7
Galaxy Digital Infrastructure Solutions ("GDIS")
- Mining reported $10.2
million of income within the quarter, a 7% increase
QoQ.
-
- Galaxy ended the quarter with approximately 3.0 exahash per
second ("EH/s") in Hashrate Under Management ("HUM")8,
representing an over 100% increase QoQ. Approximately 30% of the
3.0 EH/s of HUM came from self-mining operations. Galaxy remains on
track to surpass 4.0 EH/s of HUM by the end of 2023.
- As Galaxy has increased its mining capacity across our Helios
and Diboll sites in Texas, we increased the size of our power
purchase agreement to protect Galaxy from rising power prices.
- Self-Custody and Validator Solutions are focus areas in
emerging blockchain infrastructure for Galaxy. Since the completion
of the Partnership's acquisition of GK8 on February 21, 2023, GK8 has won four new clients
to reach eleven total clients. This includes Galaxy, as we
integrate the technology into GalaxyOne, as well as a traditional
bank and a leading protocol foundation. GK8 has also seen a
significant increase in its pipeline of potential enterprise
clients since the close of the acquisition.
____________________________________
|
3 From the quarter
ended December 31, 2022.
|
4 GGM
Operational Net Revenue is a metric that includes revenue from
counterparty-facing activities from our Derivatives, Credit,
Over-the-Counter Trading, and Quantitative Trading businesses, net
of funding charges.
|
5 Active
counterparties represent counterparties with whom we have traded
within the past 12 months and are still onboarded with the Galaxy's
trading business.
|
6 AUM is an
internal estimate inclusive of sub-advised funds, committed capital
in a closed-end vehicle, and seed investments by affiliates.
Changes in AUM are generally the result of performance,
contributions, and withdrawals. AUM for committed capital
closed-end vehicles that have completed their investment period is
reported as NAV (Net Asset Value). Quarterly AUM for close-end
vehicles is reported as of the most recent quarter available for
the applicable period.
|
7 Includes
investments held directly on the Partnership's balance sheet and
indirectly through the Galaxy sponsored funds.
|
8 Hashrate
Under Management is defined as the total combined hashrate of
active proprietary and hosted mining capacity managed by
Galaxy.
|
Corporate Updates
- US Listing: 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 approval of such listing. On February 9, 2023, Galaxy filed an amendment to
its registration statement responding to SEC comments, which is
under review.
- Share Repurchase Program: The Company has received
approval from its Board of Directors to commence a normal course
issuer bid (a "Bid"), subject to TSX approval and other conditions.
The Bid is to purchase up to approximately 10 million ordinary
shares (10% of the Company's public float) over a twelve month
period. The Company may use the program opportunistically at times
when it believes that the current market price of its shares does
not reflect their intrinsic value and that purchasing its own
ordinary shares is consistent with the objective of creating
long-term shareholder value.
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. As of March 31, 2023, a reversal of a previously
recognized impairment assessment was required under International
Financial Reporting Standards and GDH Ltd.'s minority interest in
GDH LP was marked up based on the TSX quarter-end closing share
price. An impairment expense reversal of $52.6 million was recognized during the quarter.
The net comprehensive income of GDH Ltd. was $91.6 million for the three months ended
March 31, 2023.
Earnings Conference Call
An investor conference call will be held today, May 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
June 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) passcode:
10177377.
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 is 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 months ended March
31, 2023 and (ii) GDH Ltd.'s Management Discussion and
Analysis and Consolidated Financial Statements for the three months
ended March 31, 2023 (together, the
"Consolidated Financial Statements" and "MD&As"), which have
been filed on SEDAR at www.sedar.com.
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.
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.sedar.com.
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 market
share, segment reporting, banking pipeline, strategic alliance with
DWS, mining goals 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, (12) any delay or failure to
consummate the banking mandates or achieve its pipeline, (13) the
possibility that the strategic alliance with DWS does not achieve
its goals and (13) those other risks contained in the Annual
Information Form for the year ended December
31, 2022 available on the Company's profile at www.sedar.com
and its Management's Discussion and Analysis, filed on March 28, 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 mandates; delays or other challenges in the
mining business related to hosting or power; any challenges faced
in the strategic alliance with DWS; 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)
|
March 31,
2023
|
|
December 31,
2022
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
399,943
|
|
$
542,101
|
Digital
assets
|
854,051
|
|
566,690
|
Receivable for digital
asset trades
|
16,745
|
|
9,063
|
Digital asset loans
receivable, net of allowance
|
45,143
|
|
49,971
|
Digital assets
receivables
|
20,296
|
|
12,423
|
Assets posted as
collateral
|
94,886
|
|
25,138
|
Receivables
|
18,031
|
|
10,887
|
Derivative
assets
|
89,625
|
|
17,719
|
Prepaid expenses and
other assets
|
30,072
|
|
32,818
|
Loans
receivable
|
188,976
|
|
62,611
|
Due from related
party
|
8,596
|
|
13,857
|
Total current
assets
|
1,766,364
|
|
1,343,278
|
|
|
|
|
Digital assets
receivables
|
7,403
|
|
5,154
|
Investments (includes
$235.4 and $350.6 million of equity method
investments, respectively)
|
692,385
|
|
595,122
|
Loans receivable,
non-current
|
100,150
|
|
100,977
|
Right of use
assets
|
12,944
|
|
13,735
|
Property and
equipment
|
218,631
|
|
208,538
|
Deferred tax
asset
|
47,381
|
|
47,746
|
Intangible
assets
|
32,578
|
|
6,948
|
Goodwill
|
45,278
|
|
24,645
|
Total non-current
assets
|
1,156,750
|
|
1,002,865
|
Total
assets
|
$
2,923,114
|
|
$
2,346,143
|
|
|
|
|
Liabilities and
equity
|
|
|
|
Current
liabilities
|
|
|
|
Investments sold
short
|
—
|
|
91
|
Derivative
liabilities
|
81,325
|
|
16,568
|
Accounts payable and
accrued liabilities
|
37,810
|
|
67,081
|
Payables to
customers
|
13,876
|
|
9,591
|
Taxes
payable
|
26,049
|
|
22,717
|
Payable for digital
asset trades
|
17,288
|
|
2,557
|
Digital asset loans
payable
|
299,785
|
|
170,566
|
Loans
payable
|
3,058
|
|
—
|
Collateral
payable
|
349,976
|
|
131,506
|
Due to related
party
|
58,541
|
|
53,984
|
Lease
liability
|
4,380
|
|
4,467
|
Total current
liabilities
|
892,088
|
|
479,128
|
|
|
|
|
Notes
payable
|
389,213
|
|
384,515
|
Deferred tax
liability
|
33,738
|
|
31,302
|
Lease
liability
|
11,567
|
|
12,406
|
Total non-current
liabilities
|
434,518
|
|
428,223
|
Total
liabilities
|
1,326,606
|
|
907,351
|
|
|
|
|
Equity
|
|
|
|
Partners'
capital
|
1,596,508
|
|
1,438,792
|
Total
equity
|
1,596,508
|
|
1,438,792
|
|
|
|
|
Total liabilities
and equity
|
$
2,923,114
|
|
$
2,346,143
|
Galaxy Digital Holdings LP's Consolidated Statements of
Income (Loss) and Comprehensive Income (Loss) (unaudited)
(in
thousands)
|
Three months
ended
March 31, 2023
|
|
Three months
ended
March 31, 2022
|
Income
|
|
|
|
Fee income
|
$
14,425
|
|
$
13,770
|
Net realized gain on
digital assets
|
66,119
|
|
354,981
|
Net realized gain
(loss) on investments
|
(1,978)
|
|
69,438
|
Lending and staking
income
|
10,509
|
|
14,635
|
Net derivative
gain
|
55,084
|
|
81,977
|
Income from
proprietary mining
|
2,417
|
|
6,738
|
Other
income
|
166
|
|
2,021
|
|
146,742
|
|
543,560
|
|
|
|
|
Operating
expenses
|
|
|
|
Compensation and
compensation related
|
30,621
|
|
40,548
|
Equity based
compensation
|
23,270
|
|
22,762
|
General and
administrative
|
15,135
|
|
17,948
|
Professional
fees
|
9,817
|
|
9,591
|
Profit share
arrangement expense
|
—
|
|
—
|
Interest
|
5,539
|
|
12,807
|
Notes interest
expense
|
6,731
|
|
7,274
|
|
(91,113)
|
|
(110,930)
|
|
|
|
|
Other
|
|
|
|
Net unrealized gain
(loss) on digital assets
|
3,029
|
|
(500,271)
|
Net unrealized gain
(loss) on investments
|
82,713
|
|
(74,128)
|
Net gain (loss) on
notes payable - derivative
|
(1,305)
|
|
6,493
|
Net gain on warrant
liability
|
—
|
|
2,521
|
Foreign currency gain
(loss)
|
(138)
|
|
2,017
|
Loss attributable to
non-controlling interests liability
|
—
|
|
13,411
|
|
84,299
|
|
(549,957)
|
|
|
|
|
Income (loss) before
income taxes
|
139,928
|
|
(117,327)
|
Income taxes expense
(benefit)
|
5,726
|
|
(6,119)
|
Net income
(loss)
|
$
134,202
|
|
$
(111,208)
|
|
|
|
|
Other comprehensive
income (loss)
|
|
|
|
Foreign currency
translation adjustment
|
$
(452)
|
|
$
(468)
|
|
|
|
|
Net comprehensive
income (loss)
|
$
133,750
|
|
$
(111,676)
|
|
Three months
ended
March 31, 2023
|
Three months
ended
March 31, 2022
|
GDH LP Net income
(loss) per unit:
|
|
|
Basic
|
$
0.42
|
$
(0.34)
|
Diluted
|
0.41
|
(0.34)
|
Weighted average
units:
|
|
|
Basic
|
319,379,246
|
328,623,310
|
Diluted
|
323,640,236
|
328,623,310
|
Reportable segments (unaudited)
Income and expenses by each reportable segment of GDH LP for the
three months ended March 31, 2023 are
as follows:
(in
thousands)
|
Global
Markets
|
Asset
Management
|
Digital
Infrastructure
Solutions
|
Corporate
and
Other
|
Totals
|
Income
(loss)
|
|
|
|
|
|
Fee
income(1)
|
$
2,185
|
$
4,902
|
$
7,959
|
$
(621)
|
$
14,425
|
Net realized gain
(loss) on digital assets
|
63,893
|
2,226
|
—
|
—
|
66,119
|
Net realized gain
(loss) on investments
|
388
|
(2,366)
|
—
|
—
|
(1,978)
|
Lending and staking
income
|
10,501
|
8
|
—
|
—
|
10,509
|
Net derivative
gain
|
55,084
|
—
|
—
|
—
|
55,084
|
Income from proprietary
mining
|
—
|
—
|
2,417
|
—
|
2,417
|
Other income
(expense)
|
37
|
(67)
|
48
|
148
|
166
|
|
132,088
|
4,703
|
10,424
|
(473)
|
146,742
|
|
|
|
|
|
|
Operating
expenses
|
42,210
|
16,187
|
9,314
|
23,402
|
91,113
|
|
|
|
|
|
|
Net unrealized gain
(loss) on digital assets
|
(1,477)
|
4,506
|
—
|
—
|
3,029
|
Net unrealized gain on
investments
|
40,611
|
38,859
|
3,243
|
—
|
82,713
|
Net loss on notes
payable - derivative
|
—
|
—
|
—
|
(1,305)
|
(1,305)
|
Foreign currency
loss
|
(138)
|
—
|
—
|
—
|
(138)
|
|
38,996
|
43,365
|
3,243
|
(1,305)
|
84,299
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
$
128,874
|
$
31,881
|
$
4,353
|
$
(25,180)
|
$
139,928
|
Income tax
expense
|
—
|
—
|
—
|
5,726
|
5,726
|
Net income
(loss)
|
$
128,874
|
$
31,881
|
$
4,353
|
$
(30,906)
|
$
134,202
|
Foreign currency
translation adjustment
|
—
|
—
|
—
|
(452)
|
(452)
|
Comprehensive income
(loss)
|
$
128,874
|
$
31,881
|
$
4,353
|
$
(31,358)
|
$
133,750
|
(1) Asset Management Fee income
includes management fees generated off the Partnership's principal
investments which are eliminated in the Corporate & Other
segment.
|
Income and expenses by each reportable segment of GDH LP for the
three months ended March 31, 2022 are
as follows:
(in
thousands)
|
Global
Markets
|
Asset
Management
|
Digital
Infrastructure
Solutions
|
Corporate
and
Other
|
Totals
|
Income
(loss)
|
|
|
|
|
|
Fee income
|
$
8,011
|
$
3,862
|
$
1,897
|
$
—
|
$
13,770
|
Net realized gain on
digital assets
|
80,847
|
274,134
|
—
|
—
|
354,981
|
Net realized gain
(loss) on investments
|
(3,927)
|
73,365
|
—
|
—
|
69,438
|
Lending and staking
income
|
14,615
|
20
|
—
|
—
|
14,635
|
Net derivative
gain
|
81,977
|
—
|
—
|
—
|
81,977
|
Income from proprietary
mining
|
—
|
—
|
6,738
|
—
|
6,738
|
Other income
|
169
|
725
|
1,127
|
—
|
2,021
|
|
181,692
|
352,106
|
9,762
|
—
|
543,560
|
|
|
|
|
|
|
Operating
expenses
|
44,252
|
16,081
|
5,278
|
45,319
|
110,930
|
|
|
|
|
|
|
Net unrealized loss on
digital assets
|
(166,092)
|
(334,179)
|
—
|
—
|
(500,271)
|
Net unrealized loss on
investments
|
(3,001)
|
(69,113)
|
(2,014)
|
—
|
(74,128)
|
Net gain on notes
payable - derivative
|
—
|
—
|
—
|
6,493
|
6,493
|
Net gain on warrant
liability
|
—
|
—
|
—
|
2,521
|
2,521
|
Foreign currency
gain
|
2,017
|
—
|
—
|
—
|
2,017
|
Loss attributable to
non-controlling interests
liability
|
—
|
13,411
|
—
|
—
|
13,411
|
|
(167,076)
|
(389,881)
|
(2,014)
|
9,014
|
(549,957)
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
$
(29,636)
|
$
(53,856)
|
$
2,470
|
$
(36,305)
|
$
(117,327)
|
Income tax
benefit
|
—
|
—
|
—
|
(6,119)
|
(6,119)
|
Net income (loss)
for the period
|
$
(29,636)
|
$
(53,856)
|
$
2,470
|
$
(30,186)
|
$
(111,208)
|
Foreign currency
translation adjustment
|
—
|
—
|
—
|
(468)
|
(468)
|
Comprehensive income
(loss) for the period
|
$
(29,636)
|
$
(53,856)
|
$
2,470
|
$
(30,654)
|
$
(111,676)
|
Assets and liabilities by reportable segment of GDH LP as of
March 31, 2023 are as follows:
(in
thousands)
|
Global
Markets
|
Asset
Management
|
Digital
Infrastructure
Solutions
|
Corporate and
Other
|
Totals
|
Total
assets
|
$
1,962,384
|
$
582,677
|
$
307,661
|
$
70,392
|
$
2,923,114
|
|
|
|
|
|
|
Total
liabilities
|
$
768,891
|
$
1,853
|
$
6,565
|
$
549,297
|
$
1,326,606
|
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
|
Select statement of financial position information
The fair value of select assets by reporting segment of GDH LP
as of March 31, 2023 is as
follows:
(in
thousands)
|
Global
Markets
|
Asset
Management
|
Digital
Infrastructure
Solutions
|
Corporate and
Other
|
Totals
|
Digital
assets
|
$
854,051
|
$
—
|
$
—
|
$
—
|
$
854,051
|
Digital assets
receivables
|
17,197
|
10,502
|
—
|
—
|
27,699
|
Digital assets posted
as collateral
|
88,353
|
—
|
—
|
—
|
88,353
|
Investments:
|
|
|
|
|
|
Pre-network
launch
|
—
|
6,508
|
—
|
—
|
6,508
|
Convertible
Notes
|
266
|
15,383
|
5,743
|
—
|
21,392
|
Preferred
Stock
|
48,828
|
233,956
|
3,928
|
—
|
286,712
|
Common Stock
|
68,892
|
16,788
|
—
|
—
|
85,680
|
LP/LLC
Interests
|
47,389
|
233,432
|
—
|
—
|
280,821
|
Warrants/Trust
Units/Trust Shares
|
8,667
|
2,605
|
—
|
—
|
11,272
|
Total
|
$
1,133,643
|
$
519,174
|
$
9,671
|
$
—
|
$
1,662,488
|
The fair value of each asset class by reporting segment of GDH
LP as of December 31, 2022 is as
follows:
(in
thousands)
|
Global
Markets
|
Asset
Management
|
Digital
Infrastructure
Solutions
|
Corporate and
Other
|
Totals
|
Digital
assets
|
$
566,690
|
$
—
|
$
—
|
$
—
|
$
566,690
|
Digital assets
receivables
|
10,713
|
6,864
|
—
|
—
|
17,577
|
Digital assets posted
as collateral
|
25,138
|
—
|
—
|
—
|
25,138
|
Investments:
|
|
|
|
|
|
Pre-network
launch
|
—
|
5,500
|
—
|
—
|
5,500
|
Convertible
Notes
|
259
|
10,064
|
2,326
|
—
|
12,649
|
Preferred
Stock
|
46,338
|
208,021
|
4,102
|
—
|
258,461
|
Common Stock
|
45,047
|
16,601
|
—
|
—
|
61,648
|
LP/LLC
Interests
|
33,024
|
222,775
|
—
|
—
|
255,799
|
Warrants/Trust
Units
|
—
|
1,065
|
—
|
—
|
1,065
|
Total
|
$
727,209
|
$
470,890
|
$
6,428
|
$
—
|
$
1,204,527
|
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, less non-controlling interests
liabilities, and is included in the Company's liquidity measure.
Net digital assets as of March 31,
2023 is as follows:
(in
thousands)
|
As of
March 31,
2023
|
As of
December 31,
2022
|
Assets
|
|
|
Digital
assets
|
$
854,051
|
$
566,690
|
Digital asset loans
receivable, net of allowance
|
45,143
|
49,971
|
Digital assets
receivable, current
|
20,296
|
12,423
|
Digital assets
receivable, non-current
|
7,403
|
5,154
|
Assets posted as
collateral (1)
|
88,353
|
25,138
|
|
1,015,246
|
659,376
|
Liabilities
|
|
|
Digital asset loans
payable
|
299,785
|
170,566
|
Collateral payable
(1)
|
301,464
|
73,458
|
Non-controlling
interests liability
|
—
|
—
|
|
601,249
|
244,024
|
Digital assets,
net
|
$
413,997
|
$
415,352
|
Stablecoins,
net
|
$
208,929
|
$
281,048
|
Digital assets, net
excl. stablecoins
|
$
205,068
|
$
134,304
|
(1) 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.