Cango's Q2 2025 Earnings Call Contradictions: Shifting Mining Strategy, Asset Model, and Green Energy Plans

The above is the analysis of the conflicting points in this earnings call

Date of Call: None provided

Financials Results

• Revenue: RMB 1.0B; Bitcoin mining contributed RMB 989.4M and automobile trading RMB 12.4M; no prior-period comparison disclosed

Guidance:

• Near term: maximize value from 50 EH/s via efficiency upgrades, machine optimization, and selective low-cost site acquisitions (Georgia as model).
• Open to M&A to expand computing power; maintain strict capex discipline.
• 2H focus on acquiring sites that reduce electricity costs, improve energy security, and build operational expertise.
• Advance green energy + storage through global M&A and pilot projects with partners.
• Mid/long term: retrofit facilities for AI/HPC and balance Bitcoin mining with AI workloads.
• Reporting currency to change to USD starting with Q3 2025 results.

Business Commentary:

• Strategic Transformation and Computing Power Expansion:
• Cango Inc. successfully completed its strategic transformation, scaling to 50 exahash of computing power, representing 6% of the global network's hash rate.

• The expansion was driven by the acquisition of mining equipment, strategic divestiture of China assets, and the onboarding of a senior management team with expertise in digital asset infrastructure, finance, and energy investments.

• Financial Performance and Operational Strength:

• Cango reported RMB 1 billion in total revenue for Q2 2025, with Bitcoin mining contributing RMB 989.4 million.
• Excluding accounting adjustments, adjusted EBITDA was RMB 710.1 million, showcasing the underlying strength of the Bitcoin mining business.

• The company maintained a strong balance sheet with $118 million in cash and cash equivalents as of June 30, 2025.

• Green Energy and Renewable Storage Initiatives:

• Cango acquired a 50-megawatt mining site in Georgia to reduce power costs and enhance operational stability.
• The company plans to pilot new renewable energy storage projects and achieve near-zero cost mining operations in the midterm.

• These initiatives are part of Cango's long-term strategy to build a dynamic computing platform that balances Bitcoin mining and AI workloads.

• Revenue Diversification and Used Car Export Platform:

• Cango's used car export platform, AutoCango.com, attracted over 6 million visits and surpassed 456,000 registered users since its launch.
• The platform now hosts more than 800,000 vehicles, with 70,000 different models on offer, connecting China's used car market with international buyers.
• Steady growth opportunities are expected in this segment, supporting revenue diversification.

Sentiment Analysis:

• Management highlighted scaling to 50 exahash (~6% of network) and July production of 650.5 BTC, up 44.4% from June. They cited adjusted EBITDA of RMB 710.1M (vs RMB 5.4M prior year) and a "fortress balance sheet" with ~$118M cash. Losses were attributed to one-off discontinued operations and non-cash fair value adjustments, emphasizing underlying strength of the mining business and a clear path to expand via low-cost sites and efficiency.

Q&A:

• Question from Emerson Zhao (Goldman Sachs): Roadmap for computing power and capex plans over next 12 months; update on green energy + storage timeline?
  Response: Near term, optimize the existing 50 EH/s via efficiency upgrades and selective low-cost site acquisitions; remain disciplined on capex and open to M&A; green energy + storage will progress via targeted M&A and pilot projects with partners.

• Question from Pingyue Wu (CITIC Securities): Does acquiring mining sites mean shifting from an asset-light model; will you buy more low-cost sites and which regions/criteria?
  Response: Site acquisitions support stable energy, operational know-how, and future AI data centers while maintaining an asset-led model; prioritizing the U.S. (and considering the Middle East) with criteria of low-cost power, capacity/redundancy, and grid stability.

• Question from Julie Chi (Guo Jing Securities): How will you maintain market share at 50 EH/s; any miner supply/efficiency bottlenecks; U.S. policy risks?
  Response: Competitiveness will come from efficiency optimization, upgrading and retiring inefficient rigs, and opportunistic M&A; miner supply isn’t a constraint; U.S. policy is manageable with local compliance, as many states are supportive.

• Question from William Gregorzenski (Greenridge Global): Exit-year BTC cost outlook; will you repurchase stock given valuation or prioritize expansion?
  Response: Scale and new equipment should aid costs but rising network hash rate is a headwind; cash will primarily fund high-return growth and transformation, while buybacks remain a balanced, opportunistic tool.

• Question from Kevin Dede (HC Wainwright): August effective hash rate was ~44 of 50 EH/s—how will you capture the remaining capacity?
  Response: Effective rate (~87%) will improve through upgrading inefficient miners and better operations; U.S. summer curtailments were a drag but efficiency should increase over time.

• Question from William Gregorzenski (Greenridge Global): Key takeaway from the June-quarter report for investors?
  Response: Transformation is executed—divested China assets, scaled to top-tier hash rate, built strong BTC holdings (>5,000 BTC), validated the B2B model, and see further cost-optimization opportunities.