Shares of Galaxy Digital Holdings Ltd. (NASDAQ: GLXY) faced a steep downturn on Tuesday in reaction to its fourth-quarter financial disclosure, which failed to meet market predictions and raised investor concerns regarding the firm's short-term performance. The company's quarterly revenue totaled $10.37 billion, markedly below the expected figure of $13.21 billion as forecasted by analysts. Moreover, Galaxy Digital recorded a loss of $1.08 per share, which was significantly wider than the forecasted loss of 52 cents per share, intensifying apprehensions on Wall Street.
The pronounced shortfall in revenue signifies potential challenges in Galaxy Digital's ability to efficiently manage its operations and sustain competitive market positioning in a volatile digital asset environment. The company attributed the loss principally to the depreciation observed in digital asset valuations over the quarter, noting that the overall crypto market capitalization contracted by an estimated 24 percent during this period.
Diving deeper into segment performance, Galaxy Digital's digital assets division reported an adjusted gross profit of $51 million, contrasted by an adjusted EBITDA loss amounting to $29 million. These figures were influenced by the prevailing macroeconomic headwinds alongside reduced trading volumes and diminished onchain activity within the cryptocurrency industry.
In terms of asset management, the firm disclosed that it held $6.4 billion in assets under management and approximately $5 billion in assets currently staked as of the end of the quarter. This asset base reflects Galaxy Digital's continued involvement in the digital asset space despite market contractions.
Looking forward, Galaxy Digital reaffirmed its progress on infrastructure commitments, specifically highlighting a target to provide 133 megawatts (MW) of critical IT load to CoreWeave within the first half of 2026, pursuant to their Phase I lease agreement. This milestone underscores the company's strategic investments in technology infrastructure aligned with its operational goals.
Following the earnings release, BTIG, a notable financial services firm, sustained its Buy rating on Galaxy Digital stock, maintaining a price objective of $50 per share. Consensus analyst ratings currently suggest a prevalence of Buy recommendations for the stock, with an average price target around $45.09, signaling optimism despite recent earnings results.
The immediate market response witnessed Galaxy Digital shares decline by more than 15 percent, closing at approximately $22.42 during Tuesday's trading session, as reported by market data service Benzinga Pro. This drop reflects investor concerns in light of the reported financial performance and the broader economic challenges affecting the company.
In summary, the latest financial results have illuminated significant earnings pressures on Galaxy Digital amid a subdued digital asset market and a softer macroenvironment. The company's strategic initiatives and analyst support underscore ongoing confidence in its longer-term trajectory, though near-term operational efficiency and market conditions remain critical factors to monitor.