Galaxy Digital Bounces Back with $150M Preliminary Pre-Tax Income in Q1 2023 After $1B Net Loss in 2022
Galaxy Digital Holdings Ltd. has announced its financial results for the year ended December 31, 2022, for both Galaxy Digital Holdings LP and itself. The company’s founder and CEO, Michael Novogratz, stated that 2022 was a pivotal year for the company, and despite the unprecedented macroeconomic events faced by the industry, it successfully stayed on course and took advantage of strategic opportunities to build its operating businesses for the future. Novogratz expressed confidence in the company’s go-forward strategy, businesses, and team.
Galaxy Digital Holdings LP generated about $150 million in income before tax as of March 24, 2023. The company maintained a strong liquidity position after recent disruptions in the commercial banking sector. Galaxy Digital Holdings Ltd. anticipates net profits for the first quarter of 2023 in its operating businesses and positive gains from its balance sheet holdings of liquid coins and investments.
The company’s trading operating business benefited from heightened market volatility and increased volumes from existing counterparties. Furthermore, Galaxy Mining has doubled its capacity since the beginning of the year, and by the end of 2023, it expects to have more than 4 EH/s of Hashrate Under Management.
Galaxy Digital Holdings LP’s net loss was $287.8 million for the fourth quarter of 2022, compared to a net income of $521.3 million in the prior year’s period. For the year ended December 31, 2022, net loss was $1.0 billion, compared to a net income of $1.7 billion for the year ended December 31, 2021. The loss was primarily due to unrealized marks to market on investments in the company’s Principal Investments portfolio, driven by depressed market conditions.
Galaxy Digital Holdings Ltd. maintained a strong liquidity position of $957 million as of December 31, 2022, including $542.1 million in cash and a net digital assets position of $415 million. However, the net digital assets balance of $415 million at December 31, 2022, was lower than the $1.2 billion at the end of the prior year.
Galaxy Trading reported continued growth of counterparty count and strong operational net revenue contributions. The company’s cumulative gross counterparty loan originations were approximately $370 million within the quarter.
The value of GT’s counterparty loan and yield portfolio decreased approximately 8% quarter over quarter. The company is focused on the strategic build-out of GalaxyOne, its unified, client-centric prime-brokerage platform for digital assets. A beta version of the trading component of the platform will be released to select customers in the second quarter of 2023.
Galaxy Asset Management reported preliminary assets under management of approximately $1.7 billion as of December 31, 2022, a 14% decrease from the previous year.
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