[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]  Rittenhouse Research [@RHouseResearch](/creator/twitter/RHouseResearch) on x 1483 followers Created: 2025-07-18 13:53:50 UTC It's a good question. The traditional data center comps shown above (in addition to the publicly traded names $DLR and $EQIX) have lower EBITDA margins because (i) they have significant corporate overhead (whereas Helios XX% margins are at the site-level) and (ii) their leases are not always structured as "triple-net" (so the owner might pay for taxes, insurance, and / or property maintenance expenses). Galaxy's lease with CoreWeave is structured as "triple-net", which means all of these costs are passed through to and paid by CoreWeave. The only real expense for Galaxy at Helios is security and some other smaller OpEx line items. With respect to valuation, there are arguments as to why Helios deserves a premium or a discount versus the data center comps we've highlighted. On one hand, these businesses are obviously more diversified than Helios, across both their customer base and geographically. All else equal, customer diversification is generally preferable and should lead to a higher multiple. In addition, these data center comps have generally proven over time an ability to successfully deploy capital into greenfield developments, which suggests that their enterprise value should be equal to the value of their existing portfolio plus some option or "platform" value associated with an ability to grow organically. It seems that Galaxy also intends to grow the data center business via greenfield / brownfield developments, but I'd generally expect a "platform" to trade at a higher multiple than a single site. On the other hand, these legacy data center portfolios consist almost entirely of older, CPU-centric properties. $DLR and $EQIX have been investing, and expect to continue to invest huge sums of capital to modernize their facilities such that they can accommodate modern, GPU-based, AI workloads. This is no small task - nearly all of the data center needs to be gutted so that the electrical and cooling infrastructure can be upgraded. The rack density requirements and electricity and cooling demands of AI workloads are significantly different from web-based workloads. This is capital required just to maintain the facilities revenues as workloads shift towards AI, not grow them. Meanwhile, Helios is essentially starting with a blank slate, and will be focused entirely on building AI-capable facilities. The maintenance or ongoing CapEx will be significantly lower versus a legacy data center, and thus implies that Helios should trade at a premium. Lastly, by our math based on what $GLXY has publicly announced about the CoreWeave lease (i.e. first year rent of $240MM, with an average annual of $300MM over the 15-year lease), the lease contains X% annual escalators. These escalators are again not always found in the leases of the legacy data center businesses. As such, a premium here for Galaxy makes sense given they have a contractual stream of growing cash flows. Altogether, it's difficult to pinpoint whether the positives outweigh the negatives, but we'll be watching all of these factors closely going forward. Using a 22.5x multiple as a baseline for now gives credence to both Helios's advantages (AI-focus with a name brand AI tenant, X% annual escalators, lower maintenance CapEx) and disadvantages (namely, lack of diversification), but a premium multiple over time could be warranted. We wrote a bit about $EQIX in the tweet below. XXXXX engagements  **Related Topics** [insurance](/topic/insurance) [$dlr](/topic/$dlr) [digital realty trust](/topic/digital-realty-trust) [stocks real estate](/topic/stocks-real-estate) [$eqix](/topic/$eqix) [Post Link](https://x.com/RHouseResearch/status/1946206782340362541)
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Rittenhouse Research @RHouseResearch on x 1483 followers
Created: 2025-07-18 13:53:50 UTC
It's a good question. The traditional data center comps shown above (in addition to the publicly traded names $DLR and $EQIX) have lower EBITDA margins because (i) they have significant corporate overhead (whereas Helios XX% margins are at the site-level) and (ii) their leases are not always structured as "triple-net" (so the owner might pay for taxes, insurance, and / or property maintenance expenses). Galaxy's lease with CoreWeave is structured as "triple-net", which means all of these costs are passed through to and paid by CoreWeave. The only real expense for Galaxy at Helios is security and some other smaller OpEx line items.
With respect to valuation, there are arguments as to why Helios deserves a premium or a discount versus the data center comps we've highlighted. On one hand, these businesses are obviously more diversified than Helios, across both their customer base and geographically. All else equal, customer diversification is generally preferable and should lead to a higher multiple. In addition, these data center comps have generally proven over time an ability to successfully deploy capital into greenfield developments, which suggests that their enterprise value should be equal to the value of their existing portfolio plus some option or "platform" value associated with an ability to grow organically. It seems that Galaxy also intends to grow the data center business via greenfield / brownfield developments, but I'd generally expect a "platform" to trade at a higher multiple than a single site.
On the other hand, these legacy data center portfolios consist almost entirely of older, CPU-centric properties. $DLR and $EQIX have been investing, and expect to continue to invest huge sums of capital to modernize their facilities such that they can accommodate modern, GPU-based, AI workloads. This is no small task - nearly all of the data center needs to be gutted so that the electrical and cooling infrastructure can be upgraded. The rack density requirements and electricity and cooling demands of AI workloads are significantly different from web-based workloads. This is capital required just to maintain the facilities revenues as workloads shift towards AI, not grow them. Meanwhile, Helios is essentially starting with a blank slate, and will be focused entirely on building AI-capable facilities. The maintenance or ongoing CapEx will be significantly lower versus a legacy data center, and thus implies that Helios should trade at a premium.
Lastly, by our math based on what $GLXY has publicly announced about the CoreWeave lease (i.e. first year rent of $240MM, with an average annual of $300MM over the 15-year lease), the lease contains X% annual escalators. These escalators are again not always found in the leases of the legacy data center businesses. As such, a premium here for Galaxy makes sense given they have a contractual stream of growing cash flows.
Altogether, it's difficult to pinpoint whether the positives outweigh the negatives, but we'll be watching all of these factors closely going forward. Using a 22.5x multiple as a baseline for now gives credence to both Helios's advantages (AI-focus with a name brand AI tenant, X% annual escalators, lower maintenance CapEx) and disadvantages (namely, lack of diversification), but a premium multiple over time could be warranted.
We wrote a bit about $EQIX in the tweet below.
XXXXX engagements
Related Topics insurance $dlr digital realty trust stocks real estate $eqix