Galaxy announced their Q1 2025 earnings this week and a couple notable observations came out of it:
They moved from IFRS to GAAP accounting and as a result are recognizing all transaction volume as revenue. To clarify their revenue, we have decided to use gross profit as a proxy for revenue in our analysis, which maintains their consistent multiple of revenue and is a better proxy for revenue, as management has stated in their earnings report.
The company took a quarterly loss on a gross profit of ~$203M. At first thought, one would ask, how do you have a negative gross profit? It ultimately comes down to a write down of treasury assets, which are paper losses, similar to Strategy. The impact of this is material. Gross profit has fallen from $994M for FY 2024 to $297M in the last twelve months ended March 31, 2025.
Breakdown of Gross Profit
| (USD M) | Q1 2025 | Q4 2025 |
| Trading and Lending | $43.2M | $77.6M |
| Asset Management | 21.6 | 23.4 |
| Treasury | (268) | 360 |
| Total | (203) | 461 |
While the $203M loss is largely driven by negative treasury movements, this is counteracted by previous gains in Q4 2025. In a typical business, this would be considered an investing activity, which would not show up in revenue, but crypto accounting policies remain a bit odd at times, this being a prime example of that.
