Cango (CANG) Q4 2025 Earnings Call Transcript

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DATE

Monday, March 16, 2026 at 8 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Peng Yu
• Chief Financial Officer — Yongyi Zhang
• Chief Investment Officer — Ming Yeung Tang
• Vice President, Strategy and Investor Relations — Juliet Ye

TAKEAWAYS

• Revenue -- $179.5 million for the fourth quarter; full-year revenue reached $688.1 million, driven by the Bitcoin mining business.
• Bitcoin Production -- 1,718.3 Bitcoin mined in the fourth quarter, totaling 6,594.6 for the year.
• Mining Costs -- Average cash cost per Bitcoin excluding depreciation was $84,552 in the quarter and $79,707 for the year; all-in cost per coin was $106,251 in the quarter and $97,172 for the year.
• EBITDA -- Full-year adjusted EBITDA was $24.5 million on a non-GAAP basis.
• Impairment and Losses -- An $81.4 million impairment loss from mining machines in the quarter and $338.3 million for the year; Q4 fair value loss on receivables for Bitcoin collateral was $171.4 million, and $96.5 million for the year.
• Net Loss -- Net loss from continuing operations was $285 million in the quarter and $452.8 million for the full year; total net loss attributable to shareholders was $622 million for the year, including a $169 million one-time book loss from discontinued operations and $257 million impairment linked to mining equipment and equity-settled transactions.
• Debt and Liquidity -- Long-term debt stood at $557.6 million and cash plus equivalents totaled $41.2 million as of year-end.
• Bitcoin Monetization -- In February 2026, 4,451 Bitcoin were sold, with proceeds used to repay loans, reflecting a strategic shift away from a pure accumulation strategy.
• Capital Injection -- Received a $10.5 million shareholder capital inflow and signed agreements for $65 million in new equity from Armada New Network Limited and Fortune Peak Limited.
• Hashrate Portfolio -- Achieved peak hashrate of 50 exahash per second, representing an estimated 4%-5% of the global network.
• Auto Trading Segment -- Fourth-quarter auto business revenue was $4.8 million and $9.8 million for the year, with management indicating no major new capital allocation planned for this line.
• AI Platform Launch -- Established EcoHash, a Texas-based subsidiary focused on modular AI inference nodes, targeting infrastructure reuse of mining sites.
• Georgia Site Pilot -- Initiated first-phase retrofit of the LN site in Georgia, planning a 1-2 megawatt pilot project for standardized AI compute deployment; estimated capital expenditure for 1 megawatt is approximately $20 million.
• Operational Strategy -- Management emphasized ongoing optimization by phasing out high energy-consuming mining machines and relocating capacity to lower electricity cost regions, prioritizing fleet efficiency over scale.

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RISKS

• Management reported an $81.4 million impairment of mining machines in the quarter, linked to the decline in Bitcoin prices and resulting fair value adjustments.
• CEO Peng Yu highlighted first, some nonrecurring transformation costs, including a onetime book loss of around $169 million from discontinued operations and a further loss of $257 million from impairment loss from mining equipment and the company acquired and settled in equity triggered by the significant appreciation in Cango's share price between selling and delivery. Second, towards the end of the fourth quarter, the price of Bitcoin and other cryptocurrencies declined sharply, driven by external macroeconomic factors and geopolitical tensions. This resulted in a fair value loss of $96.5 million on Bitcoin holdings and an additional impairment provision of $81 million on mining machines due to the downward price impact on their fair value.
• High average mining cost per Bitcoin in the fourth quarter was $84,552 cash cost and $106,251 all-in.
• Long-term debt remains elevated at $557.6 million, with CFO Yongyi Zhang stating the company depends on additional capital injections to fund new initiatives.

SUMMARY

Cango (NYSE:CANG) completed a strategic overhaul in 2025 by divesting its traditional auto finance operations and rapidly building out a 50 exahash global Bitcoin mining network. As market volatility and sharply lower crypto prices challenged the business model, the company reported significant impairment losses alongside large-scale asset repositioning. Notably, February 2026 saw Cango monetize more than half its Bitcoin reserves to reduce debt and preserve liquidity, diverging from its prior holding strategy. The launch of EcoHash, a modular AI infrastructure subsidiary, and a pilot deployment at the Georgia LN site signal an operational pivot toward AI compute offerings leveraging existing mining assets.

• Juliet Ye indicated a ballpark planned capital outlay for the inaugural Georgia AI pilot at around $20 million per megawatt, with a projected scope of 1-2 megawatts, subject to ongoing feasibility studies.
• Management stated that AI platform revenue is anticipated within the current calendar year, subject to successful pilot completion and initial infrastructure coming online in 4-6 months.
• Ming Yeung Tang noted any significant capital commitments will be funneled toward AI development rather than further expansion or renewal of Bitcoin mining hardware.
• CFO Yongyi Zhang explained, "we are focused on gradually validating the model through the Georgia pilot while ensuring that overall liquidity and financial stability remain intact."

INDUSTRY GLOSSARY

• Hashrate: The total computational power dedicated to mining and securing the Bitcoin network, measured in exahash per second (EH/s).
• Modular AI Compute Node: A portable, scalable hardware unit for AI inference tasks, designed for rapid deployment and efficient energy use, often leveraging existing mining infrastructure.
• Fair Value Loss on Bitcoin Collateral: A reduction in the carrying value of Bitcoin used as collateral, reflecting adverse price movements, as recognized in financial accounting.
• All-in Mining Cost: The comprehensive per-unit expense for Bitcoin mining, including cash operating costs and non-cash items such as depreciation.

Full Conference Call Transcript

Peng Yu: Thank you. Hello, everyone, and welcome to Cango's Fourth Quarter and Full Year 2025 Earnings Call. 2025 marks a landmark year in our company's history, our first year of transformation since pivoting to Bitcoin mining in November 2024. It was a year of accelerated execution, and we accomplished several critical objectives. First, asset restructuring and global deployment through a series of transactions, we relocated our assets from traditional auto finance business to our Bitcoin mining operations within 6 months. This helped us build a global distributed mining network. Second, leadership and management to align with our new strategy, we have strengthened our board and management team with seasoned industry professionals.

They have both deep expertise and established networks in both digital assets and infrastructure which has sharpened our competitive edge in the sector. Third, listing structure optimization during the year, we transitioned from an ADR listing to a direct stock listing. This move lays a solid foundation for us to access a broader range of capital market tools, reach a broader base of investors and reduce holding costs for existing shareholders. Operationally, 2025 showed a clear execution discipline despite significant market volatility in the second half of the year. We maintained professional standards across core metrics, including hashrate scale, Bitcoin production and minor uptime.

In the fourth quarter of 2025, we recorded total revenue of $179 million and produced 1,718.3 Bitcoin. For the full year, total revenue reached $688 million, with Bitcoin production totaling 6,595.6. As economy of scale took hold we achieved strong revenue growth and posted positive EBITDA for the full year. The net loss attributable to shareholders for 2025 was $622 million, mainly due to the following factors: First, some nonrecurring transformation costs.

This includes a onetime book loss of around $169 million from discontinued operations then a further loss of $257 million came from impairment loss from mining equipment and the company acquired and settled in equity triggered by us by the significant appreciation in Cango's share price between selling and delivery; second, towards the end of fourth quarter, the price of Bitcoin and other crypto currencies declined sharply, driven by external macroeconomic factors and geopolitical tensions. This resulted in a fair value loss of $96.5 million on our Bitcoin holdings and an additional impairment provision of $81 million on mining machines as a result of the downward price impact on their fair value.

In the early stages of our transformation constrained by our CapEx capabilities, we adopted a colocation model to rapidly secure a large share of the Bitcoin network hashrate. We quickly built a hashrate of 50 exahash per second, capturing approximately 4 to 5 of the global network. However, competition intensified globally and our cash cost per Bitcoin mine approached a high of $84,000 in the fourth quarter 2025, recognizing further price pressure heading into 2026, we took prudent actions, we reduced debt exposure, recovered liquidity and began phasing out inefficient capacity. These steps have strengthened our balance sheet and enhanced operational efficiency as we enter the new year.

In February 2026, we strategically sold 4,451 Bitcoin from inventory and used the proceeds to repay loans, reducing our overall debt, we then completed a $10.5 million capital injection from shareholders. Additionally, we signed agreement with Armada New Network Limited and Fortune Peak Limited for new funding around totaling $65 million. We expect these steps to progressively strengthen our active base and mitigate potential market volatility risks going forward. On the operation side, we are optimizing our operations by phasing out older high-energy-consuming mining machines. We are also gradually moving our computing power to regions with lower electricity price.

While this will lead to a contraction in our total hashrate scale in the short term, it will effectively improve the energy efficiency of our overall fleet, lower cost per coin and enhancing our resilience against dramatic -- drastic market fluctuations. Finally, many of you have asked about our AI business transformation, our efforts to reduce existing debt, strengthened equity capital and optimized Bitcoin operations have created the necessary flexibility to really make progress on AI.

On that note, we have officially established EcoHash, a wholly owned subsidiary based in Texas, dedicated to high-performance computing and AI inference, leveraging our accumulated experience in large-scale deployment and management of distributed computing infrastructure as well as our broadly partnered globally energy network of Bitcoin mining sites. We will launch standardized modular AI computing nodes aiming to provide highly flexible and cost-effective solutions for long-tail AI inference demand. As of today, we are making steady progress of feasibility studies and preparatory work.

Let me share a few updates on the infrastructure front, we have initiated the first phase retrofit of our owned LN site in Georgia USA, for standardized AI node deployment on the product side, our containerized GPU computing solutions also reached the leverage deliverable stage. Our objective is to leveraging our existing accessible skilled energy network to provide flexible and intelligent computing power to support the digital economy. In 2025, we demonstrated the speed of our transformation. In 2026, we will demonstrate our resilience and our ability to adapt and evolve. While the current macroeconomic environment presents challenges but also a long-term opportunity. The logic behind our decisions is clear, proactive adjustment, disciplined execution and commitment to the AI era.

With that, I will turn the call to Michael Zhang, our Chief Financial Officer, to take you through the financials in more detail.

Yongyi Zhang: Thanks, Paul. Hello, everyone, and welcome to our fourth quarter and full year 2025 earnings call. Before I start to review our financials, please note that unless otherwise stated, all amounts discussed are in U.S. dollars. Total revenue in the fourth quarter were $179.5 million, for the full year, revenue reached $688.1 million. Revenue during the quarter from the Bitcoin mining business was $172.4 million, with a total of 1,718.3 bitcoin mined during the period. The average cost to mine Bitcoin excluding depreciation of mining machine was $84,552 per coin with all-in cost of $106,251 per coin. For the full year, revenue from the Bitcoin mining business was $675.5 million with a total of 6,594.6 Bitcoin mined during the year.

The average cost to mine bitcoin, excluding depreciation of mining machine was $79,707 per coin with all-in cost at $97,172 per coin. Revenue from our automobile trading business was $4.8 million in the fourth quarter and $9.8 million for the full year. Now let's move on to our cost and expenses. Cost of revenue exclusive of depreciation in the fourth quarter was $155.3 million and $543.3 million for the full year. Depreciation in the fourth quarter was $38.1 million and $116.6 million for the full year. General and administrative expenses in the fourth quarter was $9.9 million and $28.9 million for the full year.

Impairment loss from mining machine in the fourth quarter was $81.4 million at $338.3 million for the full year. Loss from change in fair value of receivable for Bitcoin collateral in the fourth quarter was $171.4 million and $96.5 million for the full year. Operating loss for the quarter was $276.6 million with a net loss from continuing operations of $285 million in the fourth quarter. For the full year, the operating loss was $437.1 million and net loss from continuing operations was $452.8 million. On a non-GAAP basis, adjusted EBITDA for the full year was $24.5 million. Moving on to our balance sheet.

As of December 31, 2025, we had cash and cash equivalents of $41.2 million, our balance sheet also includes $663 million of receivables for Bitcoin collateral. In terms of operational assets, we carry out mining machine at a net value of $248.7 million of depreciation. On the liability side, we had $557.6 million in long-term debt. Together, these figures represent a core component of our financial structure as we closed the fourth quarter of 2025. This concludes our prepared remarks. Operator, we are now ready to take questions.

Operator: [Operator Instructions] Your first question today comes from Pingyue Wu with Citic Securities.

Pingyue Wu: This is Pingyue Wu from Citic Securities. And my first question is, the company recently launched EcoHash subsidiary focused on HPC and AI inference compute service? And how do EcoHash position itself in a highly competitive AI compute market? And what is the core logic behind our approach compared with traditional data centers?

Peng Yu: Thank you for your question. EcoHash is now designed to replace traditional hyperscale data centers. Instead, we're focus on targeted opportunities within specific segments of the AI compute market. Hyperscale facilities are built for large-scale centralized model training workloads. Those projects require significant upfront capital and construction time lines that can span several years. By contrast, our initial focus is on AI inference and generative AI workloads. These use cases have distributed demand and are sensitive to latency. This use case often require flexible deployment of compute nodes closer to end users rather than relying solely on massive centralized facilities. Our approach centers on resource reuse and modular design.

Notably, we can leveraged our global energy network connected to our existing Bitcoin mining sites. From this space, we are deploying standardized and modular AI compute nodes that can be deployed much faster than traditional data center infrastructure. This model shortens time lines, lowers upfront construction costs and delivers compute capacity more efficiently. For now, EcoHash remains in early phase of model validation and technical integration. We are taking a major approach, our primary objective is to explore how we can fully leverage our existing energy infrastructure to participate in the rapidly growing AI inference market. with a model that is asset light, quick to deploy and able to deliver stronger capital efficiency.

Pingyue Wu: And my second question is the company sold more than half of its Bitcoin holdings in February 2026 and this appears to be a notable shift from the mining hold strategy highlighted in the third quarter. And my question is what drives this decision?

Yongyi Zhang: Thank you for your questions. Actually, we understand that investors are watching this shift very closely. From a financial management perspective, our shift from a pure Bitcoin accumulation strategy towards more strategic monetization reflects our focus on maintaining balance sheet strength in the current market environment. Given the heightened volatility in Bitcoin prices since late in the fourth quarter and into early 2026, we made a decision in February to monetize a portion of our Bitcoin holdings. The objective was to reduce financial leverage and further optimize our balance sheet, ensuring that the company remains well positioned to navigate potential continued market volatility. It is also worth noting that we are seeing a broader shift across the mining industry.

In a cyclical environment with increasing volatility, maintaining excessive exposure to a single asset can introduce unnecessary balance sheet risk. As a result, a more balanced approach between long-term asset exposure and the financial stability is becoming increasingly common across the sector. At the same time, the company is entering a critical phase in validating the diversification of our computing power business. We see AI computing as an important long-term growth driver. By making this strategic adjustments, we are also creating greater financial and operational flexibility to support continued development and scaling of our AI-related initiatives. Thank you.

Operator: Your next question comes from [ Ming Zeng ] with China Securities.

Unknown Analyst: This is Ming Zeng from Citic, and thanks for this opportunity. I have 2 questions. The first one is that we noticed that the company's leverage ratio remained relatively high at the end of this reporting period, and the Bitcoin prices has been volatile simply, I mean the price remains weak, how will the company fund the development of its AI business? You mentioned that $10.5 million capital injection from the controlling shareholders and USD 16.5 million equity financing arrangement, how will the funds be allocated between -- manage billing and your AI initiatives in 2026?

And second question is that regarding the development of AI compute's network, what is the expected timeline over the next year and when could this began to contributing revenue. This is -- that's my question.

Yongyi Zhang: I will take your first question. We have taken proactive steps to strengthen our balance sheet, as I just mentioned. We recently sold 4,451 Bitcoin from inventory and used the proceeds to partially repay outstanding loans. This reduced our overall financial leverage and increased flexibility as we advance our AI initiatives. At the same time, we completed the closing of our USD 10.1 million capital injection and enter into agreement with Armada Network Limited and Fortune Peak Limited for an additional USD 65 million equity investment. Once this new round of financing is completed, the company's leverage ratio will decline further resulting in a stronger balance sheet that better support the development of our AI business.

AI segment, we intend to follow a disciplined and phased investment strategy. Phase 1 is product and business model validation. During this stage, we will rely primarily on internal capital. We can -- we will conduct pilot infrastructure upgrades and deploy compute products at our own LN mining site. Phase 2 begins once the model is validated, we plan to establish several backbone nodes in collaboration with selected partner mining facility. In these cases, infrastructure upgrades will be carried out jointly with site operators and project level structure financing such as GPU backed financing may be used to support expansion. Phase 3 occurs as the computer network gradually forms and begins generating stable operating cash flow.

At that point, we expect to use a flexible mix of equity and debt financing to fund the next stage of growth.

Peng Yu: Regarding the AI time line, our approach to the AI business remains major and pragmatic. The initiative is still in the early stages. So our near-term focus is on validating the commercial models and evaluating unit economics given where we are in the pilot phase, it would be premature to issue specific revenue forecast at this time. Currently, our most tangible progress is taking place at our self-operated LN mining site in Georgia. We are conducting a small-scale pilot project to deploy the first batch of standardized AI compute nodes there. This will allow us to validate the technical architecture and gather operational data. The border 1.2 gigawatt energy network that we can access serves a long-term strategic resource pool.

However, this represents a medium- to long-term capacity option. It is not necessarily a commitment to immediate large-scale capital expenditure. For now, we are focused on gradually validating the model through the Georgia pilot while ensuring that overall liquidity and financial stability remain intact. Thank you.

Operator: Your next question comes from Marco Zhang with Gelonghui Research.

Yuecong Zhang: This is Marco from Gelonghui. Congrats on your successful transformation last year. I have 2 questions here. First, you increased your hashrate from 32% exahash per second to 50 in 2025. So do you have specific hashrate expansion targets for 2026?

Peng Yu: For 2026, our focus is efficiency rather than scale. Our goal is to maintain a healthy cash flow and strong risk resilience across market cycles. In 2025, we produced approximately 6,600 BTC. We expanded the strength of our existing operational footprint. For 2026, we will implement a prioritized efficiency strategy. This starts with systematically phasing out older, high energy consumption, mining rigs. We will also gradually relocate some of our hashrate to regions with more competitive electricity pricing. This optimization may result in a temporary reduction in total hashrate in the year -- in the near term. However, it will greatly improve fleet-wide energy efficiency, lower cost per Bitcoin mined and strengthened our resilience during periods of volatility.

Our objective is to build a more resilient compute portfolio by phasing out inefficient capacity and freezing up liquidity. We strengthened our balance sheet. This also preserve capital resources that may later support our ongoing AI transition. Thank you.

Yuecong Zhang: Got it. My second question is for our modeling purpose, looking ahead from your perspective, how should investors evaluate Cango's valuation framework in 2026 and beyond? Should the company be viewed primarily as a mining company or as an AI infrastructure provider?

Peng Yu: Thank you for your question. Bitcoin mining remains our foundation, while AI represents our incremental growth engine. Over time, we believe investors may increasingly evaluate our performance through metrics, such as revenue per megawatt, whether we are deploying power into Bitcoin money or AI compute, the underlying principle is the same, converting energy into economic value, we will allocate resources towards whichever segment delivers the strong stronger returns. In that sense, Cango is evolving into a flexible compute platform, we can dynamically allocate energy-backed compute capacity across different market based on return potential. Thank you.

Operator: Your next question comes from Kevin Dede with HC Wainwright.

Kevin Dede: I'd like to quiz you a little bit more, Paul, please on detail behind your AI pilot in Georgia. How long do you think it will take you to validate the model? And do you think you might be able to turn to live market revenue sometime within this calendar year?

Ming Yeung Tang: Hi, Kevin, this is Simon Tang, Chief Investment Officer here. I'll step in and take this question if that's okay.

Kevin Dede: Perfect, Simon. Thank you.

Ming Yeung Tang: Great to reconnect. In terms of the AI pilot in Georgia because this is going to be a modular containerized solution, so it should be relatively quick, we anticipate that the -- from breaking ground to overall coming on stream, it should take somewhere between 4 to 6 months, and this is a relatively conservative estimate. And secondly, to answer your second question, in terms of revenue generation within this year, yes, we do anticipate that there is going to be some sort of revenue generated from this business model this year.

Kevin Dede: Okay. Simon, as you look at optimizing the Bitcoin mining fleet, how much of it -- of your 50 exahash would you classify as inefficient? And how much capital do you think you'll be able to allocate toward replacing the fleet versus investment in AI infrastructure.

Ming Yeung Tang: Got it. I think when we talk about inefficient, it's a function of both the mining machine model as well as the power price that we have in place for that particular site, right? So it's very difficult for us to quantify at the moment holistically how much of that we would classify as inefficient.

But overall, in terms of the general direction of this business, as Paul and Michael have alluded to earlier, we're looking at a variety of ways to increase the economics and outcome of this business, whether it be swapping some of these machines for newer models, whether it be moving them to some more cost-efficient sites or whether it be through renegotiating of these contracts, which are either expiring or which are just generally being renegotiated as well. And in terms of the capital allocation for this effort, I think our -- in terms of new capital investment, it's going to be more geared on the AI side.

So on the mining machine side, currently, we do not have any significant plans for allocating more investment into procuring new machines.

Kevin Dede: Okay. The auto business seemed to kick up pretty nicely in the fourth quarter. And I was hoping you could help me understand whether or not there was some seasonality there, how you would expect this year 2026 to progress? Do you think you should see an overall lifting in revenue there? And then -- please give us some indication of where you are on profitability in that business?

Yongyi Zhang: Thank you, Kevin, for your question. I think, yes, we see that there is a very quick development in our auto trading, I mean, overseas auto trading business overall. And we do expect that there is still got a significant -- I mean, the growth about -- related to that sector, I mean, in the coming year. But as Simon just mentioned, since we allocate the majority of our capital into the AI sectors, I mean, the AI initiatives. So we do not expect that we will allocate the further capital into the auto trading sectors.

So it's -- actually, it's a type of -- I mean internal growth, I mean, the genetical growth by our -- I mean, the auto trading business line itself. So I think -- yes. And also, it's also related to the demand side. You know that there is due to the geopolitical reasons and actually, the price volatility related to the energy. So I think it's very difficult for us to give a very clear view about -- I mean, the performance -- the financial performance for the automotive automobile trading business in the next year.

Kevin Dede: Paul. I'd like to offer my congratulations. It's really pretty amazing on how quickly you're able to transform the company, and I have no doubt that you'll be able to work out all the problems you may run into addressing HPC and AI. So congratulations on all the progress and good luck in the future.

Yongyi Zhang: Thank you, Kevin. Thank you for your time.

Operator: Your next question comes from William Gregozeski with Greenridge Global.

William Gregozeski: I just wanted to ask about how much of the Georgia facility is being allocated to the Phase 1 pilot? And are you able to give some kind of rough sense as to how much money is being spent on that Phase 1 pilot?

Juliet Ye: Hi, Bill, this is Juliet. Thank you for your question. I'll try to take this one. So with regard to the LN site, we are currently starting the retrofitting work for the site basically because we are actually adopting a modular kind of like approach. So we don't expect to turn like a major kind of like hashrate or megawatt into AI at this stage. So that one should be used as a showcase. So we will say 1 to 2 megawatts to show the possibility, to show the things we can do with our existing infrastructure.

So in terms of CapEx, so basically, we've been running demo projects as we actually discussed in previous calls last year in terms of AI transition. So we are thinking of like a ballpark of around like $20 million for 1 megawatt, including GPU. So just in case -- so it's still in the process of feasibility study. We will show more details, including numbers. When we have the LN site ready, probably later this year, as just mentioned by Simon. So for the retrofitting work, it might take around like 46 months in kind of like conservative approach. I hope that answers your question.

Operator: Thank you. This concludes our question-and-answer session. I would like to turn the conference back over for any closing remarks.

Peng Yu: Thank you for joining us. We're good. Thank you very much. Thank you, everyone, for joining our earnings call today. Thank you.

Operator: Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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