Intchains Group Limited Q2 FY2026 earnings call

Financial Position & Cost Optimization

• The company's strong cash balance allows full internal funding of its next-generation ASIC chip development program, eliminating the need for external capital.
• Annualized labor cost savings of approximately 23.1 million RMB have been achieved through organizational restructuring, divestment of non-core crypto-related businesses, and expanded adoption of AI-enabled operational tools. Cost discipline will continue through the remainder of 2026.

New Product Development Milestone

• In July 2026, the company successfully completed the tape-out of its next-generation cryptocurrency mining ASIC chip, marking a major technical milestone that keeps the project on track for a commercial launch in Q4 2026.
• The new chip is designed on a mature process to balance performance, energy efficiency, reliability, and supply availability, improving unit economics for both retail and professional miners. The project has transitioned from the R&D design phase to engineering sample production and laboratory validation (performance, reliability, thermal testing).
• Following successful validation, the company will ramp initial production and complete system-level integration ahead of commercial launch under the Go-Show Miner product line, which will broaden the company's addressable market.

Strategic Diversification

• The company is in early-stage evaluation of new growth opportunities in artificial intelligence computing, including potential acquisitions that leverage its existing core competencies in custom chip design and hardware systems integration. The long-term goal is to reduce reliance on cryptocurrency market cycles and position the company in higher-value adjacent computing markets.

Capital Return & Treasury Strategy

• The board of directors has approved a new share repurchase program authorizing up to $15 million in ADS repurchases over the next two years, funded from existing cash. The program reflects management confidence in the company's long-term strategy and commitment to shareholder value.
• The company will maintain a prudent ETH treasury and staking position, preserving existing holdings and generating staking yields. Capital allocation will prioritize the next-generation chip program and new AI initiatives over additional ETH accumulation going forward.

The transcript does not break out revenue or financial performance for separate product segments. Aggregate first half 2026 total revenue was 11.1 million RMB, with total operating expenses of 42 million RMB, resulting in a basic and diluted net loss per ordinary share of 1.22 RMB. The company ended the period with 461 million RMB in cash, cash equivalents, deposits, and government securities. The fair value of the company's non-stablecoin cryptocurrency holdings as of June 30, 2026 was 98.9 million RMB, consisting of approximately 9,176 ETH.

• The new Go-Show Miner ASIC product is expected to contribute only modest revenue in the second half of 2026, with a far more meaningful revenue contribution in fiscal 2027 as commercialization accelerates.
• Management expects 2027 full-year revenue to exceed results from the 2024-2025 down cycle, and projects 2027 will be the company's strongest year in five years, driven primarily by mass production of the new ASIC product, with additional contribution from ETH staking revenue.
• Continued cyclical softness in altcoin demand and broader crypto market headwinds are expected to persist through the second half of 2026.
• If the broader crypto market recovers, older existing product lines for established altcoins will also contribute incremental revenue in 2027, as the company can quickly ramp production of these chips if demand rises.

• The company operates with exposure to continued cyclical softness in cryptocurrency demand, which has negatively impacted first half 2026 results and is expected to persist through the second half of 2026.
• The February 2026 PRC mining machine sales restrictions have added further pressure to current demand.
• New product commercialization is subject to risks: successful silicon validation and manufacturing ramp are required to meet the planned Q4 2026 launch target, and delays could impact projected 2027 revenue.
• The company's long-term strategic plan to diversify into AI computing is still in early evaluation stages, and there is no guarantee that potential opportunities will deliver meaningful revenue or strategic value. AI acquisition and development capital requirements are still uncertain.
• Actual future results may differ materially from management's forward-looking expectations due to known and unknown risks and uncertainties related to crypto market conditions, product development, and strategic initiatives.

Q: With the new $15 million share repurchase program, ongoing ASIC R&D, and potential AI M&A, what are the company's current capital allocation priorities? / A: The $15 million share repurchase program is confirmed and will proceed as planned. Capital requirements for existing current ASIC business operations will remain consistent with prior projects. For AI initiatives and potential M&A, the company is still evaluating multiple candidate opportunities, each with different capital needs, so no specific capital estimate can be provided at this stage. (163 characters)

Q: What milestones should investors watch over the next few quarters, and what is your outlook for 2027 revenue diversification? / A: The key near-term milestone is the commercial launch of the new ASIC in Q4 2026. The new product will only contribute modest H2 2026 revenue, but full mass production will be on track in 2027 to drive stronger revenue than the 2024-2025 down cycle. ETH staking will also contribute more meaningful revenue than in 2026, and any progress on AI initiatives will add additional upside. Management expects 2027 to be the company's best year in five years. (312 characters)

Q: How has competition changed in the ASIC design business amid the ongoing crypto bear market? / A: Competition for the new cryptocurrency that the company's next-generation ASIC targets is not intense. While the company is not the first entrant in this segment, management is confident the new product has leading performance relative to competing offerings. Management expects the crypto market will recover in the second half of 2026 or 2027, supporting revenue growth alongside improving crypto prices. (241 characters)

Q: Will existing ETH treasury holdings be converted to cash for M&A or other investment initiatives, or will they be held long-term? / A: The company's current strategy is to hold existing ETH rather than sell it for other projects, and will not allocate existing operating cash to additional ETH purchases going forward. Going forward, new ETH purchases will only be funded from operating profits generated by mining machine sales. Current cash reserves are prioritized for existing business operations, ASIC R&D, and AI initiatives. (263 characters)