Cango Inc. Q2 FY2025 earnings call

• Strategic transformation to become a leading Bitcoin mining company, scaling to 50 exahash of computing power.
• Completed divestiture of legacy China asset with a $352 million divestiture in May, resulting in one-off loss from discontinued operations.
• Acquired 18 exahash of mining capacity in November, with share-based payment due to fair value accounting adjustment.
• In August, acquired a 50-megawatt mining site in Georgia to reduce power costs and enhance stability.
• Maintains a fortress balance sheet with $118 million in cash and cash equivalents as of June 30.
• Asset-light strategy with Plug & Play mining rigs for quick scaling, though cash costs per BTC were $83,091, all-in costs at $98,636 per BTC.
• Geographic diversification across regions to mitigate risks.
• Road map includes maximizing value from 50 exahash via efficiency upgrades, pilot renewable energy storage, and retrofitting for HPC applications.

Total revenue in the second quarter of 2025 was RMB 1 billion. Bitcoin mining contributed RMB 989.4 million, which is 98.94% of the total revenue. The legacy used car export platform, AutoCango, generated revenue of RMB 12.4 million.

• Maximize value from 50 exahash by implementing efficiency upgrades and replicating Georgia site's low-cost model.
• Pilot renewable energy storage projects for near-zero-cost mining operations.
• Selectively acquire mining sites with low electricity costs, prioritizing U.S. and considering Middle East.
• Retrofit select facilities for HPC applications in the midterm.

• Regional policy changes affecting mining operations.
• Miner supply shortages and industry-wide cost pressures impacting profitability.
• Headwinds from rapid increase in global network hash rate affecting cost structure.

Q: Outline road map for computing power over next 12 months and capital expenditure plans, and update on green energy plus storage progress.

A: For computing power, goal is to fully unlock 50 exahash by improving efficiency and selectively acquiring low-cost sites. For green energy plus storage, advancing via M&A targets and pilot projects with partners.

Q: Company's light asset model and shift to integrated operation, plan for more low electricity cost sites, and screening criteria.

A: Acquiring mining sites has strategic benefits beyond cost, with criteria including low-cost electricity, sufficient capacity, and grid stability. Prioritize U.S. currently, with Middle East in consideration, focusing on climate, energy prices, etc.

Q: Road map for computing power to maintain market share, and policy risks in U.S. infrastructure investment.

A: Maintain competitiveness via deep optimization of computing power efficiency, dynamic phase-out of inefficient capacity. Monitor U.S. policy environment, have local compliance team and legal advisers.

Q: Cost per BTC outlook and stock repurchase plans.

A: Cash cost per BTC around $83,000, all-in cost around $8,000, new equipment expected to improve metrics but industry headwinds may affect. Focus on strategic cash deployment for expansion, consider share repurchases for long-term value.

Q: Explanation on improving from 44 exahash to 50 exahash and most important aspect of June report.

A: Effective operational hash rate is lower initially due to implementation and curtailment, will improve via efficiency upgrades. Most important aspect is milestone of 50 exahash, entering first tier, Bitcoin holdings over 5,000 BTC, and solid financials with cost optimization focus.