Galaxy Digital Inc. 10-K

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Management’s discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K (“Annual Report”). Some of the information contained in this Annual Report includes forward-looking statements that involve risks and uncertainties. You should read the sections titled “Special Note Regarding Forward-Looking Statements” and “Risk Factors” for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. The following discusses financial conditions and results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024. Discussion of financial conditions and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Prospectus filed with the SEC on December 19, 2025. Overview Galaxy is a global financial services and infrastructure company focused on digital assets and high performance computing (“HPC”). We aim to facilitate efficient access and adoption of digital assets by institutional clients through our Global Markets and Asset Management & Infrastructure Solutions businesses within our Digital Assets segment. We also develop, and will in the future operate, HPC data center infrastructure to meet the rising global demand for reliable power and scalable compute capacity driven by accelerated artificial intelligence (“AI”) growth. Our Digital Assets operating business segment provides new products and capabilities such as staking, margin-based financing and active exchange-traded-funds. Galaxy has relationships with more than 1,600 trading counterparties spanning both crypto-native and traditional finance, with approximately $12.3 billion in assets across our platform as of December 31, 2025. In October 2025, we launched GalaxyOne, which is a retail financial technology platform designed for individual investors seeking access to both traditional and digital markets. Its core offerings include access to an FDIC-insured high-yield demand deposit account offered by our bank partner Cross River Bank for U.S.-based depositors and a debt security issued by Galaxy Digital LP and guaranteed by GDH LP for U.S. accredited investors, as well as seamless access to U.S. commission-free equities and crypto trading via our regulated partners DriveWealth and Paxos, respectively. Earned monthly interest, paid into the GalaxyOne cash account provided by Cross River Bank, is available for optional reinvestment into bitcoin or other supported crypto assets. We are also leveraging our experience in developing and operating industrial scale bitcoin mining infrastructure into HPC data center infrastructure. Our full suite of services spans across two operating business segments: Digital Assets and Data Centers. Our Digital Assets operating business segment includes: • Our Global Markets business, which provides over-the-counter (“OTC”) spot and derivatives trading, lending, and structured products, as well as mergers and acquisitions (“M&A”) advisory and equity and debt capital markets services. • Our Asset Management & Infrastructure Solutions business encompasses our investment management division and blockchain infrastructure products and services, with approximately $12.3 billion in assets across the platform as of December 31, 2025. Our Asset Management business manages a diverse suite of ETF and Alternatives strategies, taking the investing DNA that has been core to Galaxy since our founding and externalizing it for institutional allocators and individuals. Our Infrastructure Solutions business enables our clients to participate in an increasingly on-chain and decentralized future through staking, tokenization and custodial technology. Our Data Centers operating business segment develops, and will in the future operate, HPC infrastructure to meet the growing demand for large-scale, power-ready facilities in the AI/HPC industry. Galaxy’s Helios data center campus, located in the panhandle region of West Texas, is developing the first 133 megawatts (“MW”) of critical IT load, utilizing approximately 200 MW of gross power capacity, for CoreWeave, Inc. (“CoreWeave”) under a 15-year lease agreement 89 (the “Lease Agreement”) entered into in April 2025. The retrofit of Helios will be completed in phases, with the full 133 MW of critical IT load expected to be delivered by the end of the first half of 2026. In total, the Electric Reliability Council of Texas (“ERCOT”) has approved over 1.6 gigawatts (“GW”) of gross power capacity at our Helios campus. In addition to the initial 200 MW described above, 600 MW of this gross power capacity will support the incremental 393 MW of critical IT load leased to CoreWeave under the Phase II (the “Phase II Lease”) and Phase III (the “Phase III Lease”) leases pursuant to the Lease Agreement, and is expected to be delivered starting in 2027. The remaining 830 MW of approved power capacity remains available to be contracted. Our operating business segments are supplemented by our Treasury and Corporate segment, which includes Galaxy’s diversified portfolio of digital assets, venture, private equity, and fund investments. Financial and Operational Highlights • Galaxy generated Net income (loss) of $(241.3) million, $346.7 million and $228.5 million for the years ended December 31, 2025, 2024 and 2023, respectively. • Galaxy generated Adjusted EBITDA of $33.7 million for the year ended December 31, 2025, compared to Adjusted EBITDA of $715.4 million for the year ended December 31, 2024. 1 • Total equity as of December 31, 2025 was $3.0 billion, an increase of 38% from $2.2 billion as of December 31, 2024. • In August 2025 and January 2026, Galaxy and CoreWeave entered into the Phase II Lease and Phase III Lease, respectively, which together are expected to increase CoreWeave’s contracted capacity at the Helios data center campus to 526 MW of critical IT load by 2028. • On August 15, 2025, Galaxy Helios I LLC (“Galaxy Helios I”) entered into a credit agreement (the “Credit Agreement” and, together with the related transaction documents, the “Project Financing Documents”) with Deutsche Bank AG providing for a senior secured term loan facility in an aggregate principal amount of up to $1.4 billion (the “Loan Amount”) to finance the first phase of the build-out of our Helios data center campus (the “Project Financing”). Our Business Model Galaxy’s business generates revenue through a variety of channels, creating a diversified and resilient cash flow base that is not directly correlated to any single asset, token, or business line. Within the Digital Assets operating business segment, the Global Markets business earns revenue from spreads on client trades, net interest income from lending activities, and fees from M&A and capital raising transactions. Galaxy’s Asset Management & Infrastructure Solutions business generates management and performance fees on assets under management, fees on assets staked to our validator nodes and licensing fees from institutions who leverage our proprietary self-custody technology. Within our Data Centers operating business segment, we expect the majority of revenue to come from long-term lease agreements with cloud service provider clients that Galaxy may obtain from time to time for HPC. Galaxy does not currently earn any revenue from its Data Centers business, but expects this segment to become a significant and diversified source of long-term, predictable revenue for Galaxy, uncorrelated to the prices of digital assets, particularly once we begin to deliver critical IT load for CoreWeave (and potentially other future tenants) starting in 2026. We also earn revenue by managing a diversified portfolio of digital assets, venture, private equity, and fund investments on our balance sheet, as well as through our bitcoin mining operations, all of which are reported within the Treasury and Corporate segment. Non-GAAP Financial Measures To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our business. These non-GAAP financial measures, which may be different than similarly-titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Adjusted EBITDA is a non-GAAP 1 See the section titled “Non-GAAP Financial Measures” below for a reconciliation of Net Income / (loss) to Adjusted EBITDA and an explanation for why we consider Adjusted EBITDA to be a helpful metric for investors. 90 financial measure that is used by management, in addition to GAAP financial measures, to understand and compare our operating results across accounting periods, for risk management and operational decision-making. We believe Adjusted EBITDA provides investors with additional useful information in evaluating Galaxy’s operating performance, as well as a useful measure for period-to-period comparisons of our business performance. Adjusted EBITDA is defined as Net income / (loss), excluding (i) equity based compensation, (ii) interest expense on structural debt, (iii) taxes, (iv) depreciation and amortization expense, (v) gains and losses on the embedded derivative on our Exchangeable Notes which ceased to exist upon consolidation as a result of the Reorganization Transactions, (vi) mining-related impairment loss / loss on disposal of mining equipment, (vii) settlement expense, (viii) other (income) / expense, net and (ix) reorganization and reorganization merger costs that we believe are not indicative of our ongoing results. The above items are excluded from our Adjusted EBITDA because these items are non-cash in nature, or because the amount and timing of these items are unpredictable, are not driven by core results of operations, and render comparisons with prior periods and competitors less meaningful. This non-GAAP financial measure does not have any standardized meanings prescribed by GAAP and may not be comparable to similar measures presented by other companies in our industry. This non-GAAP financial measure has been prepared by, and is the responsibility of, Galaxy’s management, and has not been audited or reviewed by our independent registered public accounting firm. You should not place undue reliance on this non-GAAP financial measure. The following tables present a reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, Net income / (loss): (in thousands) Digital Assets Data Centers Treasury and Corporate Year ended December 31, 2025 Net income / (loss) $ 193,886 $ (1,098) $ (434,137) $ (241,349) Add back: Equity based compensation 38,584 2,580 24,355 65,519 Notes interest and other expense — — 59,247 59,247 Tax expense / (benefit) — — (29,330) (29,330) Depreciation and amortization expense 14,606 1,251 18,212 34,069 Mining related impairment loss / loss on disposal — — 95,056 95,056 Unrealized (gain) / loss on notes payable – derivative — — 35,544 35,544 Reorganization and reorganization merger costs — — 8,687 8,687 Settlement expense — — 8,933 8,933 Other (income) / expense, net (325) — (2,380) (2,705) Adjusted EBITDA $ 246,751 $ 2,733 $ (215,813) $ 33,671 (in thousands) Digital Assets Data Centers Treasury and Corporate Year ended December 31, 2024 Net income / (loss) $ 47,008 $ (7,497) $ 307,211 $ 346,722 Add back: Equity based compensation 54,823 — 30,921 85,744 Notes interest and other expense — — 38,333 38,333 Tax expense / (benefit) — — (16,939) (16,939) Depreciation and amortization expense 11,446 7,497 27,937 46,880 Mining related impairment loss / loss on disposal — — — — Unrealized (gain) / loss on notes payable – derivative — — 31,727 31,727 Settlement expense — — 182,462 182,462 Reorganization and reorganization merger costs — — 3,244 3,244 Other (income) / expense, net $ (2,773) (2,773) Adjusted EBITDA $ 113,277 $ — $ 602,123 $ 715,400 91 Key Factors Affecting Our Performance The growth and success of our business as well as our financial condition and operating results have been, and will continue to be, affected by a number of factors, including: Price and volatility of digital assets Values of digital assets have been highly volatile. Effects from speculation regarding the future appreciation or depreciation in the value of digital assets, making their market prices more volatile, may materially and adversely affect the value of our digital asset inventory. Changing investor confidence and resultant fluctuations in the price of various digital assets may cause uncertainty in the market and could negatively impact trading volumes of digital assets, which would negatively impact our business and operating results. Adoption of digital assets The launch of Bitcoin ETFs in 2024 coupled with a shift in U.S. government policy in 2025 enabled wider institutional adoption of bitcoin and other digital assets through increased market access and regulatory clarity. The initially retail-driven adoption of cryptocurrencies has evolved to include institutional holders, utilizing digital assets as both a store of value and for commercial applications. According to the National Cryptocurrency Association 2025 State of Crypto Holders Report, the number of U.S. cryptocurrency owners was over 55 million, or one in five Americans. Additionally, in a report released by EY Parthenon in March 2025, 83% of institutional investors intended to increase their allocations to digital assets in 2025. Moreover, bitcoin’s trailing five-year compounded annual growth rate reached 24.8% as of December 31, 2025. However, historical trends are not indicative of future adoption, and it is possible that the adoption of digital assets and blockchain technology may slow, take longer to develop, or never be broadly adopted, which would negatively impact our business and operating results. Strategic acquisitions and investments We intend to continue to use our scale, expertise, and balance sheet to identify and execute on acquisitions across our business lines. A series of acquisitions has diversified our product offerings and revenue sources. This includes the acquisition of the Helios bitcoin mining facility and its operations from Argo Blockchain in December 2022. In February 2023, we completed the acquisition of GK8, a developer of secure technology solutions for self-custody of digital assets by institutions, from the Chapter 11 bankruptcy estates of Celsius Network, LLC and its affiliated debtors in possession. In July 2024, we acquired the assets of CMF, a blockchain node operator that provides trusted, secure services to decentralized protocols across the digital assets ecosystem. In December 2024, we acquired Fierce, a financial application software provider that we relaunched in October 2025 as GalaxyOne. Any such acquisitions of, or investments in, companies with complementary products and technologies may affect our future operating results. Regulation in U.S. and international markets Our financial prospects and continued growth depend in part on our ability to continue to operate in a manner compliant with regulations. Our business is subject to the oversight of numerous regulatory agencies in the U.S. and other jurisdictions, including, but not limited to, FinCEN, the Securities and Exchange Commission (“SEC”) and the Commodities Futures Trading Commission (“CFTC”). Many of these agencies have issued consumer advisories regarding the risks posed by digital assets to investors. Our strategy is to continue to invest significantly in our finance, legal, compliance, and security functions in order to remain at the forefront of digital asset policy initiatives and regulatory trends. We primarily service institutional customers potentially mitigating some of the compliance risks. However, as the industry matures, we may experience fluctuations in our operating results as a result of changes in the laws and regulations that are applicable to our business. Components of Results of Operations Revenue • Digital assets sales: Gross sales proceeds from sales of digital intangible assets. • Fees : Performance and management fees for unconsolidated funds, for which the Company acts as the general partner and / or manager. Additionally, this includes fees received for investment advisory services including mergers and acquisition advisory, as well as fees earned through technology licensing, mining hosting operations, and mining equipment lease income . 92 • Blockchain rewards : Gross amount of blockchain generated digital assets and transaction fees earned for proof-of-stake validation, also referred to as staking. • Proprietary mining : Bitcoin rewards from proprietary digital asset mining. • Interest income : The return that is earned from digital assets and fiat currencies lent to counterparties. Gains / (losses) from operations • Net gain / (loss) on digital assets : Realized and unrealized gains / (losses) from changes in the fair value of digital assets that are measured using fair value in accordance with our accounting policies. This includes net gains resulting from the return of Digital intangible assets borrowed and Collateral payable. Digital assets borrowed and Collateral payable digital asset liabilities each contain an embedded derivative that is valued based on the market prices of the underlying digital assets; certain corresponding Digital intangible assets may be held at the lower of cost or lowest observable fair value. Upon repayment of the digital asset loans, the impaired digital intangible assets have a lower carrying value than the liabilities and a gain is recorded on extinguishment of the Digital asset loans payable. Other digital asset balances such as Digital assets receivable, digital assets posted as collateral, and Digital assets loans receivable, net of allowance are also measured at the fair value of the underlying digital assets and the resulting fluctuations are also included in Net gain / (loss) on digital assets. • Net gain / (loss) on investments : Gains / (losses) from the changes in fair value of investments, as well as the gain / (loss) from sales of investments held by the Company. • Net gain / (loss) on derivatives trading : Change in fair value of derivative assets and liabilities, resulting from contracts held by the Company for trading and hedging purposes. Operating expenses Operating expenses consist of transaction expenses, impairment of digital assets, compensation and benefits, general and administrative (inclusive of depreciation and amortization), technology, professional fees, and exchangeable notes interest expense. Transaction expenses Transaction expenses consist of the following: • Digital assets sales costs : Carrying value of digital assets sold, net of impairment if applicable, allocated on a first-in-first-out basis. • Blockchain reward distributions : As a principal in the provision of staking services, the Company recognizes the amount of staking rewards earned by third-parties utilizing the Company’s validation infrastructure as part of its operating expenses. • Borrowing costs : Costs of borrowing digital assets and fiat from clients and counterparties. Borrowed digital assets and fiat are utilized in our trading and lending operations. • Mining and hosting costs : Mining power costs, including realized and unrealized gains and losses on power purchase agreements, hosting fee expense and costs of mining equipment recognized through sales-type finance leases. • Other transaction expenses : Trading commissions, custody, and exchange fees incurred by the Company. Impairment of digital assets Impairment loss from digital intangible assets which have been marked to the lower of cost or lowest observable fair value in the current period. Results of Operations Below is a discussion of our results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024. The results of operations presented below should be reviewed in conjunction with Galaxy’s consolidated financial statements and notes thereto included elsewhere in this Annual Report. 93 Year ended December 31, 2025 Compared to Year ended December 31, 2024 The following table presents our results of operations for the Years Ended December 31, 2025 and 2024. Year ended December 31 (in millions) 2025 2024 $ Change % Change Revenues $ 60,406.7 $ 42,596.7 $ 17,810.1 42 % Gains / (losses) from operations 948.9 1,161.1 $ (212.2) (18) % Revenues and gains / (losses) from operations 61,355.7 43,757.8 17,597.9 40 % Operating expenses: Transaction expenses 60,175.8 42,409.9 17,766.0 42 % Impairment of digital assets 753.7 331.9 421.8 127 % Compensation and benefits 299.9 265.6 34.3 13 % General and administrative 182.9 279.3 (96.4) (35) % Technology 46.9 30.5 16.4 54 % Professional fees 75.0 51.1 24.0 47 % Notes interest expense 59.2 30.8 28.4 92 % Total operating expenses 61,593.5 43,399.1 18,194.5 42 % Other income / (expense): Unrealized gain / (loss) on notes payable – derivative (35.5) (31.7) (3.8) (12) % Other income / (expense), net 2.7 2.8 (0.1) (4) % Total other income / (expense) (32.8) (29.0) (3.9) (13) % $ (270.7) $ 329.8 $ (600.5) (182) % Income taxes expense / (benefit) (29.3) (16.9) (12.4) (73) % Net income / (loss) $ (241.3) $ 346.7 $ (588.1) (170) % 94 Year ended December 31, 2024 Compared to Year Ended December 31, 2023 The table below presents our results of operations for the Years Ended December 31, 2024 and 2023. Year ended December 31 (in millions) 2024 2023 $ Change % Change Revenues $ 42,596.7 $ 51,626.8 $ (9,030.1) (17) % Gains / (losses) from operations 1,161.1 582.9 $ 578.3 99 % Revenues and gains / (losses) from operations 43,757.8 52,209.6 (8,451.8) (16) % Operating expenses: Transaction expenses 42,409.9 51,494.1 (9,084.2) (18) % Impairment of digital assets 331.9 98.3 233.6 238 % Compensation and benefits 265.6 219.3 46.3 21 % General and administrative 279.3 58.4 220.9 378 % Technology 30.5 20.1 10.4 52 % Professional fees 51.1 38.1 13.0 34 % Notes interest expense 30.8 27.3 3.5 13 % Total operating expenses 43,399.1 51,955.5 (8,556.4) (16) % Other income / (expense): Unrealized gain / (loss) on notes payable – derivative (31.7) (9.6) (22.1) (230) % Other income / (expense), net 2.8 (0.1) 2.9 (2,900) % Total other income / (expense) (29.0) (9.7) (19.2) (198) % $ 329.8 $ 244.4 $ 85.4 35 % Income taxes expense / (benefit) (16.9) 15.9 (32.9) 207 % Net income / (loss) $ 346.7 $ 228.5 $ 118.2 52 % 95 Revenues and gains from operations Revenue Year ended December 31 (in millions) 2025 2024 Change % Change Digital assets sales $ 59,850.9 $ 42,155.9 $ 17,694.9 42 % Fees 158.6 103.2 55.4 54 % Blockchain rewards 220.0 180.8 39.1 22 % Proprietary mining 14.5 63.3 (48.8) (77) % Revenues from contract with customers $ 60,244.0 $ 42,503.2 $ 17,740.6 42 % Blockchain rewards from non-customers (1) 14.9 8.0 7.0 88 % Interest income 147.9 85.5 62.4 73 % Total revenues $ 60,406.8 $ 42,596.7 $ 17,810 42 % Year ended December 31 (in millions) 2024 2023 Change % Change Digital assets sales $ 42,155.9 $ 51,488.1 $ (9,332.2) (18) % Fees 103.2 50.8 52.4 103 % Blockchain rewards 180.8 5.7 175.1 3072 % Proprietary mining 63.3 33.1 30.2 91 % Revenues from contract with customers $ 42,503.2 $ 51,577.7 $ (9,074.5) (18) % Blockchain rewards from non-customers (1) 8.0 1.0 7.0 700 % Interest income 85.5 48.1 37.4 78 % Total revenues $ 42,596.7 $ 51,626.8 $ (9,030.1) (17) % ______________ (1) Includes blockchain rewards earned from decentralized finance protocols and third-party staking infrastructure. Total revenues were $60.4 billion, an increase of $17.8 billion, or 42% for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase in total revenues for the year ended December 31, 2025 was primarily driven by a $17.7 billion increase in Digital assets sales. Galaxy recognizes revenue from transactions with customers, which include centralized trading platforms, and the corresponding Digital assets sales cost, on a gross basis because of its role as principal in sales and purchases of digital intangible assets. The significant volume of Galaxy’s digital intangible asset transactions results in significant Digital assets sales revenue with corresponding significant digital asset sales cost reflected in Transaction expenses. As a result, the magnitude of changes in Revenue on the Company’s statement of operations overshadow other parts of the business, but are predominantly offset by Transaction expenses in Net income. Digital assets sales increased for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily due to a significant trade executed in the third quarter of 2025 of 80,000 BTC and supplemented by higher average prices of digital assets during 2025. Digital assets sales associated with external customer facing trades are reflected in the Digital Assets segment. Sales of bitcoin, ether and tether made up 85% and 88% of Digital assets sales for the years ended December 31, 2025 and 2024, respectively. Approximately 53% of Digital assets sales revenue for the year ended December 31, 2025 was comprised of the sale of bitcoin, compared to 58% of Digital assets sales revenue for the year ended December 31, 2024. Approximately 13% of Digital assets sales revenue for each of the years ended December 31, 2025 and 2024 were comprised of the sale of ether. Fees revenue was $158.6 million, an increase of $55.4 million , or 54%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. For the year ended December 31, 2025, the increase was primarily attributable to the investment banking fees earned from us acting as placement agent in a private placement (the “Forward PIPE Transaction”) by Forward Industries, Inc., a global design company that initiated a Solana focused treasury strategy (“Forward Industries”), as well as additional asset management fees earned during the year due to increased assets under management. The increase was partially offset by the cessation of mining hosting contracts at the Helios site during the 96 first quarter of 2025 in anticipation of the data center conversion. As a result, no mining hosting revenue was generated for the year ended December 31, 2025, as compared to mining hosting revenue of $31.6 million during the year ended December 31, 2024. Blockchain rewards from customers were $220.0 million , an increase of $39.1 million , or 22% , for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase was attributable to both increased assets under stake and a higher average price of digital assets during the majority of 2025. Galaxy launched proof of stake (“PoS”) validation infrastructure services (reflected within the Digital Assets segment) in late 2023 to which third party and proprietary digital assets may be bonded on PoS networks to generate blockchain rewards. The delegation of staked digital assets to Galaxy-operated validation infrastructure by a number of digital assert treasury companies starting in the second quarter of 2025 contributed to the increased Blockchain rewards from customers earned in the year ended December 31, 2025 as compared to the year ended December 31, 2024. The net portion of the blockchain rewards retained by Galaxy earned on third party digital assets bonded to Galaxy validator nodes was betwe en 5% and 10% as of December 31, 2025. Blockchain rewards generated by the Digital Assets segment on Treasury and Corporate digital assets are eliminated on consolidation within the Treasury and Corporate segment. Blockchain rewards earned from non-customers are primarily generated from participation in various decentralized finance protocols. The yield generated from these activities are primarily driven by the value of the underlying digital asset at the time of receipt and the various incentives provided by the protocols to participants. Proprietary mining was $14.5 million, a decrease of $48.8 million, or 77%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The decrease f or the year ended December 31, 2025 was attributable to the cessation of proprietary mining at the Helios site at the end of the first quarter of 2025 and to lower hash price that resulted from the halving of the bitcoin network in April 2024. Mining activities are reflected within the Treasury and Corporate segment. Interest income was $147.9 million , an increase of $62.4 million , or 73% , for the year ended December 31, 2025, compared to the year ended December 31, 2024. This increase was primarily attributable to the increased size of the loan book. The average loan book size for the year ended December 31, 2025 was $1,794.8 million compared to $639.9 million for the year ended December 31, 2024. Interest income related to external lending activities is reflected within the Digital Assets segment. Gains / (losses) from operations Year ended December 31 (in millions) 2025 2024 Change % Change Net gain / (loss) on digital assets $ 742.4 $ 634.6 $ 107.8 17.0 % Net gain / (loss) on investments (122.5) 258.8 $ (381.3) (147.3) % Net gain / (loss) on derivatives trading 329.0 267.8 $ 61.3 22.9 % Net gain / (loss) from operations $ 948.9 $ 1,161.1 $ (212.2) (18) % Year ended December 31 (in millions) 2024 2023 Change % Change Net gain / (loss) on digital assets $ 634.6 $ 333.5 $ 301.1 90.3 % Net gain / (loss) on investments 258.8 97.8 $ 161.0 164.6 % Net gain / (loss) on derivatives trading 267.8 151.6 $ 116.2 76.6 % Net gain / (loss) from operations $ 1,161.1 $ 582.9 $ 578.2 99 % Net gain / (loss) on digital assets was $742.4 million for the year ended December 31, 2025, compared to a Net gain / (loss) on digital assets of $634.6 million for the year ended December 31, 2024. The net gain on digital assets during the year ended December 31, 2025 was driven by net gains of approximately $557.0 million on bitcoin including associated DeFi assets, net gains of approximately $161.4 million on SOL , including associated DeFi assets as well as restricted tokens, and net gains of approximately $70.3 million on ether including associated DeFi assets, partially offset by net losses of approximately $62.6 million on certain restricted digital assets, and net losses of approximately $18.6 million on digital assets receivable. Galaxy transacts significantly in and holds net long positions predominantly in bitcoin and ether, which decreased in value by 6% and 11%, respectively, in the year ended December 31, 2025. The net gain or loss on digital assets not measured at fair value depends on the difference in value of the underlying digital asset between the time 97 of recognition and derecognition. Net gain on digital financ ial assets in the year ended December 31, 2025 was driven by increased valuations for the majority of the year for digital assets from Galaxy’s net borrowed positions in these assets, which include certain tokenized financial instruments. Net gain / (loss) on digital assets is reflected in both the Digital Assets and Treasury and Corporate segments depending on the underlying activity. The primary drivers for the net gains and losses on digital assets were as follows: Year ended December 31 (in millions) 2025 2024 Change % Change Net gain/(loss) on digital intangible assets measured at fair value $ (64.3) $ 214.6 $ (278.9) (130.0) % Net gain/(loss) on digital intangible assets not measured at fair value (1) 778.2 428.9 349.3 81.4 % Net gain/(loss) on digital financial assets measured at fair value (2) 28.6 (8.9) 37.5 n/m Net gain/(loss) on digital assets $ 742.4 $ 634.6 $ 107.8 17.0 % Year ended December 31 (in millions) 2024 2023 Change % Change Net gain/(loss) on digital intangible assets measured at fair value $ 214.6 $ 288.7 $ (74.1) (25.7) % Net gain/(loss) on digital intangible assets not measured at fair value (1) 428.9 32.9 396.0 1,203.6 % Net gain/(loss) on digital financial assets measured at fair value (2) (8.9) 11.8 (20.7) (175.4)% Net gain/(loss) on digital assets $ 634.6 $ 333.4 $ 301.2 90.3 % _______________ (1) Includes gain on derecognition of impaired digital assets. (2) Includes gains and losses on tokenized financial assets such as U.S. Treasuries as well as tokenized variable debt tokens. Net loss on investments was $(122.5) million for the year ended December 31, 2025, compared to a Net gain on investments of $258.8 million for the year ended December 31, 2024. The net loss for the year ended December 31, 2025 was primarily attributable to net unrealized losses on investments in Forward Industries, Bitcoin ETFs, CPO, and Xapo, partially offset by net realized gains primarily attributable to CPO and Bitcoin ETFs. Net gains and losses on proprietary investments are reflected in the Treasury and Corporate segment. Net gain on derivatives trading was $329.0 million, an increase of $61.3 million, or 23% , for the year ended December 31, 2025, compared to the year ended December 31, 2024. Derivatives trading gains include proprietary trading and hedging activities. The increase for the year ended December 31, 2025 was primarily attributable to $22.3 million and $19.7 million increases of realized and unrealized gains on settled and unsettled equity securities and foreign currencies derivatives, respectively. These gains were partially offset by a decrease of $6.0 million in realized and unrealized gains on settled and unsettled interest rate derivatives. Net gain / (loss) on derivatives is reflected in both the Digital Assets and Treasury and Corporate segments dependent on the underlying activity. 98 Net derivative gain represents gains / (losses) from settled derivative trades and gains / (losses) on open derivatives. It was driven by the following free-standing derivatives: Year ended December 31, 2025 (in thousands) Gains / (losses) on open derivatives Gains / (losses) from settled derivative trades Net gain on derivatives trading Digital assets (1) $ 70,688 $ 180,776 $ 251,464 Foreign currencies (1,208) 19,496 18,288 Interest rates 333 885 1,218 Equity securities 12,312 30,156 42,468 Commodities 1,747 13,850 15,597 Total $ 83,872 $ 245,163 $ 329,035 ________________ (1) Galaxy actively hedged its exposure to restricted digital assets and digital asset receivables, which contributed $77.2 million to Net derivative gain in the year ended December 31, 2025. Year ended December 31, 2024 (in thousands) Gains / (losses) on open derivatives Gains / (losses) from settled derivative trades Net gain on derivatives trading Digital assets (1) $ (47,514) $ 284,087 $ 236,573 Foreign currencies 1,535 (2,911) (1,376) Interest rates (3,116) 10,341 7,225 Equity securities (4,912) 25,083 20,171 Commodities (642) 5,818 5,176 Total $ (54,649) $ 322,418 $ 267,769 _______________ (1) Galaxy actively hedged its exposure to restricted digital assets and digital asset receivables, which contributed $44.2 million to Net derivative gain in the year ended December 31, 2024. Year ended December 31, 2023 (in thousands) Gains / (losses) on open derivatives Gains / (losses) from settled derivative trades Net gain on derivatives trading Digital assets (1) $ (1,112) $ 145,618 $ 144,506 Foreign currencies 569 (4,405) (3,836) Interest rates 3,283 (5,177) (1,894) Equity securities 5,160 306 5,466 Commodities (7) (810) (817) Other — 8,158 8,158 Total $ 7,893 $ 143,690 $ 151,583 _______________ (1) Galaxy actively hedged its exposure to restricted digital assets and digital asset receivables, which contributed $(12.2) million to Net derivative loss in the year ended December 31, 2023. 99 Operating expenses Transaction expenses Year ended December 31 (in millions) 2025 2024 Change % Change Digital assets sales costs $ 59,790.0 $ 42,102.4 $ 17,687.5 42 % Blockchain reward distributions 178.9 130.3 48.6 37 % Borrowing costs 158.0 100.8 57.3 57 % Mining costs 8.1 47.6 (39.5) (83) % Other transaction expenses 40.8 28.7 12.1 42 % Transaction expenses $ 60,175.8 $ 42,409.8 $ 17,766.0 42 % Year ended December 31 (in millions) 2024 2023 Change % Change Digital assets sales costs $ 42,102.4 $ 51,441.2 $ (9,338.8) (18) % Blockchain reward distributions 130.3 2.6 127.7 4912 % Borrowing costs 100.8 18.2 82.6 454 % Mining costs 47.6 20.8 26.9 129 % Other transaction expenses 28.7 11.4 17.3 152 % Transaction expenses $ 42,409.8 $ 51,494.2 $ (9,084.3) (18) % Digital assets sales costs were $59.8 billion , an increase of $17.7 billion, or 42%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. This was primarily driven by increased trade volumes resulting from a significant trade execution in the third quarter of 2025, supplemented by higher average digital asset prices in 2025 . Digital assets sales costs must be analyzed in conjunction with Impairment of digital assets and Net gain/(loss) on digital assets. Digital assets sales costs associated with external customer facing trades are reflected in the Digital Assets segment. Blockchain reward distributions were $178.9 million , an increase of $48.6 million, or 37%, for the year ended December 31, 2025, compared to $130.3 million for the year ended December 31, 2024. Galaxy launched validators in 2023 (reflected within the Digital Assets segment) to which third party and proprietary digital assets may be bonded on PoS networks to generate blockchain rewards. Blockchain reward distributions represent the staking rewards earned on third party assets staked on Galaxy validators which are passed on to the third parties, net of the fees which Galaxy charges. The delegation of staked digital assets to Galaxy-operated validation infrastructure by a number of digital assert treasury companies starting in the second quarter of 2025 contributed to the increased Blockchain rewards and associated Blockchain reward distributions in the year ended December 31, 2025 as compared to the year ended December 31, 2024. The net portion of the Blockchain rewards retained by Galaxy earned on third party digital assets bonded to Galaxy validator nodes, including the CPO, was betw een 5% and 10% as o f December 31, 2025. Blockchain reward distributions generated by the Digital Assets segment on Treasury and Corporate digital assets are eliminated on consolidation within the Treasury and Corporate segment. Borrowing costs were $158.0 million , an increase o f $57.3 million, or 57%, f or the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to higher average borrowing volumes supporting increased operational activity. Mining costs w ere $8.1 million, a decrease of $39.5 million, or 83%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The decrease was attrib utable to the cessation of mining hosting contracts during the first quarter of 2025 and the elimination of proprietary mining at the Helios site at the end of the first quarter of 2025 in anticipation of the data center conversion. 100 Other transaction expen ses were $40.8 million, an increase of $12.1 million, or 42%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. Other transaction expenses include exchange, custodial and trading fees, which are primarily driven by trading volume. Impairment of di gital assets was $753.7 million, an increase of $421.8 million, or 127%, f or the year ended December 31, 2025, compared to the year ended December 31, 2024. This increase was primarily attributable to the mix of digital intangible assets with which the Company transacted; specifically, higher exposure to digital assets which convey enforceable rights to Galaxy over the underlying assets, such as digital assets from many decentralized finance protocols and wrapped tokens, during the year ended December 31, 2025, as compared to the same period last year, resulted in higher impairment as the associated assets typically do not qualify for fair value treatment under ASU 2023-08. Impairment of digital assets includes expense associated with digital intangible assets held at lower of cost or market that were sold during the period and those digital intangible assets still held by Galaxy at the end of the period. Sales of impaired digital assets generate net gain on digital assets for the difference between the sale price and the carrying value of the asset. Compensation and benef its were $299.9 million, an increase of $34.3 million, or 13%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase for the year ended December 31, 2025 was due to an increase in headcount. General and administrative expenses were $182.9 million , a decrease of $96.4 million , or 35% , for the year ended December 31, 2025, compared to the year ended December 31, 2024. The decrease for the year ended December 31, 2025 was primarily driven by the legal settlement expense of $182.5 million incurred in 2024, partially offset by $87.3 million of impairment on proprietary mining equipment and infrastructure . Depreciation and amortization of $34.1 million was included in General and administrative expenses for the year ended December 31, 2025, which decreased by $12.8 million compared to $46.9 million for the year ended December 31, 2024 due to the lower cost basis and write-off of mining equipment and infrastructure in connection with the data center conversion. Net Income/(Loss) Galaxy generated Net loss of $241.3 million for the year ended December 31, 2025, compared to Net income of $346.7 million for the year ended December 31, 2024, and Net income of $228.5 million for the year ended December 31, 2023, respectively. The primary driver of Net loss for the year ended December 31, 2025 was lower digital asset prices on the year. Galaxy transacts significantly in bitcoin which decreased in value by 6% during the year ended December 31, 2025, and ether which decreased in value by 11% during the year ended December 31, 2025. The following table represents select financial data and a discussion of significant changes for the past eight quarters: (in millions) December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 Net gain / (loss) on digital assets $ 171.9 $ 453.8 $ 134.9 $ (18.2) $ 198.2 $ 112.0 $ (22.0) $ 346.4 Net gain / (loss) on investments $ (482.5) $ 297.8 $ 195.4 $ (133.2) $ 284.0 $ 13.3 $ (101.5) $ 63.0 Quarter over quarter fluctuation Bitcoin (23)% 6% 30% (12)% 48% 1% (12)% 69% Ether (28)% 67% 36% (45)% 28% (24)% (6)% 60% Cryptocurrency market capitalization (24)% 16% 24% (18)% 51% (4)% (14)% 64% Bitcoin price (1) $87,509 $114,056 $107,144 $82,549 $93,429 $63,329 $62,678 $71,334 Ether price (1) $2,967 $4,146 $2,486 $1,823 $3,333 $2,603 $3,433 $3,648 Cryptocurrency market capitalization (2) $3,047,610 $3,993,636 $3,429,992 $2,766,428 $3,393,595 $2,250,803 $2,332,883 $2,702,110 _______________ (1) Represents coinmarketcap.com quoted price as of 23:59 UTC for bitcoin and ether. Presented in whole dollars. (2) Represents market capitalization data from coinmarketcap.com through September 30, 2024 and from coingecko.com starting with the period ended December 31, 2024. 101 Net gain / (loss) on digital assets and investments have historically been correlated with fluctuations in the prices of bitcoin and ether as demonstrated in the table above. As Galaxy’s operating businesses in the Digital Assets and Data Center segments mature, digital asset prices are anticipated to have a proportionally less significant impact on Net income in the future. Components of Financial Position The following represents selected financial data and a discussion of significant changes. Year ended December 31 (in millions) 2025 2024 Change % Change Digital intangible assets (1) $ 3,553.0 $ 2,568.6 $ 984.4 38 % Digital financial assets 988.6 359.7 628.9 175 % Digital asset loans receivable 1,078.9 579.5 499.4 86 % Assets posted as collateral — digital assets 200.1 277.1 (77.0) (28) % Digital assets receivable (1) 8.5 60.7 (52.2) (86) % Digital assets subtotal 5,829.1 3,845.6 $ 1,983.5 52 % Digital assets borrowed (1) 2,417.3 1,497.6 919.7 61 % Collateral payable — digital assets 1,960.9 1,324.7 636.2 48 % Digital asset liabilities subtotal 4,378.2 2,822.3 $ 1,555.9 55 % Investments (1) 1,732.3 1,643.5 88.8 5 % Property and equipment 1,423.1 237.0 1,186.1 500 % Total assets $ 11,348.1 $ 7,119.9 $ 4,228.2 59 % Total liabilities $ 8,313.3 $ 4,925.5 $ 3,387.8 69 % _______________ (1) Includes current and non-current portion. As of December 31, 2025, our digital asset balances were $5.8 billion, an increase of $2.0 billion from December 31, 2024. This increase was driven by a significant increase in Digital financial assets, Digital assets borrowed to support increased operations, and an increase in digital asset collateral payable due to the increased size of our loan portfolio. These same drivers also drove the increase of $1.6 billion in our digital assets liabilities balances which totaled $4.4 billion as of December 31, 2025. The Company’s largest digital asset holding as of both December 31, 2025 and December 31, 2024 was bitcoin. For the year ended December 31, 2025, the price of bitcoin decreased by 6%. Investments increased $88.8 million to $1.7 billion as of December 31, 2025. This increase was primarily due to investments in Forward Industries and Ripple Labs, Inc. (“Ripple Labs”). As of December 31, 2025, Galaxy’s largest investments were bitcoin and ether spot ETF investments of $535.8 million, limited partner interests in Galaxy-sponsored funds of $259.3 million, Ripple Labs of $217.1 million and Forward Industries of $88.2 million. Property and equipment increased $1.2 billion to $1.4 billion as of December 31, 2025. The increase was primarily due to investment in AI/HPC infrastructure to build out our data center hosting facility at Helios in West Texas, partially offset by an $87.3 million impairment of mining equipment and related infrastructure and $12.3 million of disposals of mining equipment net carrying value as sociated with the data center conversion of our Helios campus. We capitalize costs, including direct labor and materials, associated with the development and construction of our AI/HPC data center infrastructure while the assets are being prepared for their intended use. Total assets increased by $4.2 billion to $11.3 billion as of December 31, 2025 , primarily due to the $1.2 billion increase in Property and equipment and $2.0 billion increase in digital assets balances described above. Total liabilities increased by $3.4 billion for the year ended to $8.3 billion as o f December 31, 2025, primarily due to the $0.9 billion and $0.6 billion increase in digital assets borrowed and digital asset collateral payable, respectively, as described above, as well as the approximately $1.3 billion in 2031 Exchangeable Notes issued in October 2025 (see discussion below). 102 Liquidity and Capital Resources We have historically financed our operations primarily through our operating results, net proceeds from the sale of exchangeable senior notes, investments from private investors, and net proceeds from underwritten offerings. We held $1.2 billion in cash and cash equivalents as of December 31, 2025, an increase of $784.1 million , or 169.7%, as compared to December 31, 2024. The following table provides a breakdown of the Company’s cash and cash equivalents balances by location: Year ended December 31 (in millions) 2025 2024 Digital asset trading platforms 77.5 64.7 Other financial institutions (1) 1168.7 397.4 Total $ 1,246.2 $ 462.1 __________________ (1) Includes banks, other trading platforms, and broker-dealers Working capital (current assets less current liabilities) was $3.2 billion and Total equity was $3.0 billion as of December 31, 2025, compared to working capital of $2.0 billion and Total equity of $2.2 billion as of December 31, 2024. The $840.4 million increase in Total equity during the year ended December 31, 2025 was primarily due to our public offerings of shares in June 2025 and October 2025, as well as the impact of the Reorganization Transactions. As of December 31, 2025 and December 31, 2024, we held total gross digital assets with a carrying valu e of $4.5 billion and $2.9 billion , respectively. On October 30, 2025, Galaxy issued $1.3 billion (including $150 million issued upon the exercise in full of the initial purchasers’ option to purchase additional 2031 Exchangeable Notes) of 0.50% Exchangeable Senior Notes due 2031. From time to time and subject to the terms of the indenture governing the 2031 Exchangeable Notes, the 2031 Exchangeable Notes are exchangeable for shares of Class A common stock. We are utilizing the net proceeds from the offering to support the build-out of high-performance computing infrastructure at our Helios data center in West Texas and for general corporate purposes. See Note 19 of the Company’s consolidated financial statements included elsewhere in this Annual Report for additional information on the 2031 Exchangeable Notes. On October 10, 2025, Galaxy entered into investment agreements with certain institutional investors for a $460 million private strategic investment in the Company’s Class A common stock (the “October Private Placement”), consisting of a purchase of 9,027,778 shares of Class A common stock from the Company and 3,750,000 shares of Class A common stock from certain of its executive officers, at $36.00 per share. The October Private Placement closed on October 17, 2025. On August 15, 2025, Galaxy Helios I entered into the Credit Agreement with Deutsche Bank AG providing for a senior secured term loan facility in an aggregate principal amount of up to $1.4 billion. The intended use for this facility is to finance the construction and development of a data center project in Dickens County, Texas and related costs. As of December 31, 2025, the outstanding amount drawn under the Credit Agreement was $878.0 million, which is recognized within Notes payable in the Company’s consolidated statements of financial position. See Note 19 of the Company’s consolidated financial statements included elsewhere in this Annual Report for additional information on the Credit Agreement. In June 2025, the Company and certain selling stockholders sold 35,980,967 shares of Class A common stock in an underwritten public offering, of which 26,400,000 shares were offered by the Company and the remaining sold by the selling stockholders (including pursuant to the underwriter’s option to purchase additional shares), at an offering price of $19.00 per share. Net proceeds to the Company from the offering were approximately $477.8 million after deducting underwriting discounts and offering costs. We are utilizing the net proceeds from this offering to finance the continued expansion of our AI/HPC infrastructure at the Helios data center campus and general corporate purposes. In November 2024, Galaxy issued $402.5 million of 2.500% Exchangeable Senior Notes due 2029. From time to time and subject to the terms of the indenture governing the 2029 Exchangeable Notes, the 2029 Exchangeable Notes are exchangeable for shares of Class A common stock. We are utilizing the net proceeds from the offering to support the build-out of high-performance computing infrastructure at our Helios data center in West Texas and for general corporate purposes. See Note 19 of the Company’s consolidated financial statements included elsewhere in this Annual Report for additional information on the 2029 Exchangeable Notes. 103 In April 2024, Galaxy raised C$169.4 million from a syndicate of underwriters, led by Canaccord Genuity Corp. Galaxy issued 12,100,000 ordinary shares pursuant to the transaction. We are utilizing the net proceeds for working capital and general corporate purposes. In the general course of business, we make commitments to invest in our managed funds and to purchase equipment. From time to time, we receive cash inflows from our investments via strategic disposal and redemptions, as well as via distributions. On a net cash basis, we expect to continue to make investments in our sectors as we find compelling opportunities, balanced by conservatively managing our liquidity. As we grow our business, we expect our operating expenses to increase. In addition, we make investments in early-stage companies and coin networks in the digital assets space. Individual investments tend to be small but in the aggregate, these investments can constrain our liquidity. We consider our liquidity position and projected liquidity needs when committing to new investments. Year ended December 31 (in thousands) 2025 2024 Total assets $ 11,348,081 $ 7,119,855 Total liabilities $ 8,313,304 $ 4,925,503 Total equity 3,034,777 2,194,352 We may be required to return borrowed digital assets or counterparty collateral held to secure our loans receivable. As of December 31, 2025 and through the date of this filing, we have not experienced any difficulties meeting counterparty requests to return loans or collateral. To meet our estimated capital expenditure requirements related to the conversion of the existing bitcoin mining infrastructure at our Helios campus to AI/HPC data center infrastructure, we will need to obtain additional debt, equity and/or equity-linked financing. The final terms and availability of any such financing will depend on various factors, including market conditions at the time. Beyond the Helios campus conversion, we believe that our existing cash and cash equivalents and cash flows from operations will be sufficient to support working capital requirements for at least the next 12 months. We expect these sources will be sufficient to fund our long-term contractual obligations and capital needs. However, this is subject, to a certain extent, to general economic, financial, competitive, regulatory, and factors that are beyond our control. See “Risk Factors—Risks Related to our Operations—Our expansion into the AI/HPC data center business has required, and will continue to require, substantial additional capital. We may be unable to obtain additional financing for this or for other areas of business development on acceptable terms or at all” in this Annual Report. In the event there is insufficient working capital to support the growth of the business, we may sell digital assets to generate cash to meet obligations as they come due, or may exit all or a portion of an investment if an exit price is advantageous to us. We may also seek additional sources of financing in the future, including but not limited to, issuing equity, convertible notes or a debt facility. On February 6, 2026, our board of directors authorized a share repurchase program to purchase up to $200 million of our Class A common stock (the “Share Repurchase Program”). Under the Share Repurchase Program, we may repurchase shares of our outstanding Class A common stock from time to time through open market purchases, privately negotiated transactions, pre-paid puts or other methods in accordance with applicable securities laws and regulations. The timing, manner, price, and amount of any repurchases will be determined by the Company at its discretion and will depend upon business, economic and market conditions, corporate, legal and regulatory requirements, prevailing stock prices, and other considerations. The Share Repurchase Program has a term of 12 months, may be suspended, discontinued at any time, and does not obligate us to acquire any amount of Class A common stock. Cash Flows The following table summarizes our cash flows for the periods presented: Year ended December 31 (in thousands) 2025 2024 2023 Net cash provided by (used in) operating activities (316,636) (205,079) (4,079) Net cash provided by (used in) investing activities (1,290,579) (521,629) (284,782) Net cash provided by (used in) financing activities 2,391,352 872,201 63,370 Cash and cash equivalents for the year ended December 31, 2025 increased from $462.1 million to $1.2 billion. The Company utilized $1.3 billion for its investing activities, which was primarily due to purchases of investments of $2.6 104 billion and purchases of property, equipment and intangible assets of $1.2 billion partially offset by proceeds and distributions from investments of $2.6 billion. Net cash provided by financing activities was $2.4 billion primarily due to $851.2 million, net of costs, from share issuances and $2.1 billion of proceeds from Notes payable, net of issuance costs, partially offset by $311.5 million net cash used for margin loans payable. Operating activities utilized an additional $316.6 million. Off-Balance Sheet Arrangements As of December 31, 2025 and December 31, 2024, we did not have any other off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our results of operations or financial position. Contractual Obligations and Commitments The following table presents a summary of our contractual obligations as of December 31, 2025: Payments Due by Period Contractual Obligations and Commitments Total Less than 1 year 1 - 3 years 4 - 5 years After 5 years Loans and collateral payable (1) $ 4,450,065 $ 4,393,958 $ 56,107 $ — $ — Lease obligations 14,916 5,387 9,100 429 — Notes payable 3,028,037 447,550 877,987 402,500 1,300,000 Data center commitments 529,775 529,775 — — — Legal settlement 160,000 40,000 120,000 — — Other obligations (2) 129,315 80,092 49,223 — — Total Contractual Obligations and Commitments $ 8,312,108 $ 5,496,762 $ 1,112,417 $ 402,929 $ 1,300,000 __________________ (1) Includes fiat and digital asset payables. Loans and collateral with terms of less than one year and those without a prespecified maturity date are included in the Less than 1 year category. However, these balances are generally extended and rolled into new loans and/or collateral. (2) Includes obligations to fund capital commitments to six portfolio companies. Excludes other liabilities related to goods and services required in the ordinary course of business. Refer to Note 18 of Galaxy’s consolidated financial statements included in this Annual Report for further information on our commitments and contingencies and Note 15 of Galaxy’s consolidated financial statements for further information on the Company’s lease obligations. Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with GAAP. In preparing the consolidated financial statements, we apply accounting policies and estimates that affect the reported amounts and related disclosures. Inherent in such policies are certain key assumptions and estimates made by management, which we believe best reflect our underlying business and economic conditions. Our estimates are based on historical experience and various other factors and assumptions that we believe are reasonable under the circumstances. We regularly re-evaluate our estimates used in the preparation of the consolidated financial statements based on our latest assessment of the current and projected business and economic environment. By their nature, these estimates and judgments are subject to an inherent degree of uncertainty and actual results could differ materially from the amounts reported based on these estimates. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit” price) in an orderly transaction between market participants at the measurement date. Fair value is a market-based measure considered from the perspective of a market participant. When market assumptions are not readily available, assumptions are made to reflect those that the Company believes market participants would use in pricing the asset or liability at the measurement date. Certain of the Company’s assets and liabilities are held at fair value. In determining fair value, the Company uses various valuation approaches and establishes a hierarchy for inputs used in measuring fair value, requiring the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs 105 reflect assumptions the Company believes other market participants would use in pricing the asset or liability; they are developed based on the best information available in the circumstance. The fair value hierarchy is broken down into three levels: Level 1, Level 2 and Level 3 based on the observability of inputs. The level of judgment required in determining the fair value depends on the availability of observable market information. Financial instruments classified within Level 3, which use significant unobservable inputs, require more significant judgments compared to Level 1 and 2 instruments. The Company values Level 1 and Level 2 assets and liabilities using quoted market prices or alternative pricing sources and models utilizing market observable inputs. The Company utilizes unobservable pricing inputs and assumptions in determining the fair value of its Level 3 assets and liabilities. These unobservable pricing inputs and assumptions may differ by asset/liability and in the application of valuation methodologies. The Company’s reported fair value estimates could vary materially if different unobservable pricing inputs and other assumptions were used; or for applicable assets/liabilities, if the Company only used a single valuation methodology instead of assigning a weighting to different methodologies. Key unobservable inputs that have a significant impact on the Company’s Level 3 valuations are described in Note 12 of the Company’s consolidated financial statements. Due to the wide range of investments we hold, no single individual input is the primary driver of the fair value of the investments on a portfolio basis. However, while it is not an input to the determination of the fair value of the Level 3 investments, in general, there is a strong correlation of the fair value of our Level 3 investments with the overall market values of digital assets such as bitcoin and ether, as the majority of our Level 3 investments are in companies within the digital asset industry. Fair values of Level 3 assets and liabilities may be supported by limited or no market activity within the periods presented. Impairment The Company recognizes certain Digital intangible assets at cost less applicable impairment charge. Impairment exists when the carrying amount exceeds its fair value. The fair value for Digital intangible assets is determined using available pricing on the principal market for the respective digital assets. The Company also recognizes impairment on property and equipment when facts and circumstances indicate that the carrying amounts may not be recoverable. Impairment testing of property and equipment held for use requires determining recoverability based on undiscounted estimated future cash flows, and if the undiscounted cash flows are less than the carrying amounts, the fair value of those assets. This process involves significant judgment. The most significant property and equipment the Company holds relate to its bitcoin mining and AI/HPC leasing operations. The Company estimates the future cash flows related to its property and equipment using a number of key inputs, including but not limited to bitcoin price, bitcoin network difficulty, power cost, cash flows from hosting arrangements, and cash flows from leasing contracts. While no individual input is the most significant driver of the fair value of our mining operation and AI/HPC leasing operations, a significant decline in market value of bitcoin and/or the estimated residual value of our data center infrastructure would likely result in an impairment of our property and equipment. Allowance for credit losses The Company’s calculation of allowance for credit losses involves judgment in applying various assumptions including valuation of collateral, loss in value of collateral, and the Company’s ability to liquidate collateral in an event of default. Most of the Company’s loans are over collateralized, and the Company has the ability to request additional collateral to maintain a required loan to value ratio. The Company uses the practical expedient under ASC 326-20-35-6 to estimate credit losses based on the fair value of the collateral. The Company further estimates the probability of default for each counterparty. A rapid loss in value of collateral assets or a significant increase of the probability of default could a ffect the Company’s estimate of expected credit losses. For example, a reduction in the price of digital assets by 20% or an increase in probability of default by 100% would decrease / increase the allowance for credit losses by $0.2 million or $1.1 million as of December 31, 2025, respectively.