Cango Inc. Q3 FY2025 earnings call

• Mining Performance: Third quarter total revenue reached USD 225 million, up 60.6% sequentially. Operating income was USD 43.5 million and net income was USD 37.3 million. Deployed hashrate is 50 exahash globally. Produced 1,930.8 Bitcoins, up 37.5% from the second quarter 2025. Reprioritized hashrate optimization by refreshing to T21 and S21 series, average operating hashrate improved from 40.91 exahash in July to 46.09 exahash in October, with efficiency surpassing 90%. Acquired a 50-megawatt mining facility in Georgia in August.
• Long-Term Strategy: Building a global distributed AI compute network powered by green energy, with Bitcoin mining as a practical on-ramp. Clean energy projects in Oman and Indonesia are underway, expected to commission within 1 or 2 years. AI compute focuses on flexible distributed compute units for small and midsized enterprises.
• Governance: Assembled a new leadership team with deep experience in digital infrastructure and finance, transitioned from APR listing to NYSE direct listing.
• Automotive Training: AutoCango delivered strong performance with $3.3 million revenue, up 90% sequentially.

Mining Operations: In the third quarter, revenue from Bitcoin mining business was $220.9 million. Total Bitcoins produced were 1,930.8, up 37.5% from the second quarter 2025, with an average daily production of 21 Bitcoins, up 36% from the second quarter. Deployed hashrate is 50 exahash globally. Automotive Training: Revenue from the used car export platform AutoCango was $3.3 million in the third quarter, up 90% sequentially. Revenue contribution: Mining operations contributed the majority, with automotive training a smaller segment.

• Continue to monitor volatile Bitcoin prices and manage deployed output, exploring partnership models to mitigate risks. - Phased road map with strict financial discipline, conducting small-scale pilots for energy and AI compute. - Clean energy projects in Oman and Indonesia expected to commission in 1-2 years, supporting subsequent AI infrastructure development.

• Volatile Bitcoin prices and significant fluctuations in market. - External factors like extreme weather and grid curtailment periodically affect mining availability. - Concerns about AI CapEx entering bubble territory.

Q: Given the current Bitcoin prices, will the company consider selling Bitcoin holdings to fund new business expansion or manage market risk or support operation needs?

A: This quarter, we continue to follow our mine and hold strategy, retaining all mined Bitcoin as part of our strategic reserve. We'll take a flexible approach across equity and other financing channels to support new initiatives. Our Bitcoin reserves also provide a meaningful liquidity buffer.

Q: What are the main factors behind the gap between October operational hashrate (46.6 exahash) and deployed hashrate (50 exahash)? And when do you expect full utilization?

A: After completing the acquisition of 18 exahash in late June, initial integration phase had temporary downtime due to cross state machine relocations and power system commissioning. Now uptime has stabilized about 90%, external factors like extreme weather affect availability, achieving 100% uptime not feasible, 90% uptime is industry-leading. Going forward, will enhance efficiency through upgrades.

Q: Can you elaborate on the financial benefit of converting short-term debt into long-term debt and what is your current cost of debt?

A: Converting short-term to long-term debt aligns capital structure with strategy, enhancing balance sheet stability. Current cost of debt is in the 7% to 8% annualized range.

Q: Given concerns about AI CapEx entering bubble territory, how do you view this risk as you enter the AI infrastructure space?

A: Cango takes a differentiated approach with flexible distributed compute units for small and midsized enterprises, leveraging distributed operational expertise and global energy footprint. We evaluate AI project investments based on potential returns and cash flow profiles.

Q: How does the recent pullback in Bitcoin affect your operating pace for Q4 2026 and how long can you operate under extreme market conditions?

A: We conduct frequent internal stress tests. With our asset-light model, we can dynamically adjust and even shut down high-cost sites in extreme scenarios. We focus on long-term return per unit of hashrate rather than short-term market noise.

Q: The Georgia site acquisition contradicts asset-light model. Will future expansion favor leased sites or acquisitions?

A: Acquired the Georgia site for securing low-cost power, stability, and infrastructure capabilities. Future will follow balanced model of lease first with selective strategic acquisitions, evaluating acquisitions against strict criteria like power cost and regulatory stability.