Cango Inc. Q2 2026 Earnings: Mining Restructuring and AI Infrastructure Commercialization

Monday, Aug. 31, 2026 at 9:00 p.m. ET

Call Participants

• CEO – Paul Yu
• CFO – Simon Tang

Key Takeaways

• Total Revenue: $50.8 million ($47.4 million mining, $3.4 million other).
• Revenue Change: ~50% decrease QoQ due to hashrate reduction and leasing transition.
• Net Loss: $81.6 million, driven by ~$51 million in noncash impairment and disposal losses.
• Bitcoin Production: 656 BTC mined.
• Hashrate: 27.58 EH/s total (19.84 EH/s self-mining, 7.74 EH/s leased).
• Cash Mining Cost: $73,313 per BTC (~5% lower QoQ); all-in cost $98,405.
• Impairment / Disposal: $42.9 million impairment on older S19 machines; $8.5 million disposal loss.
• Crypto Fair Value: $4.1 million loss vs. $151.8 million in Q1.
• Cost of Revenue: $50.7 million ex-depreciation (down from $99.6 million).
• Cash & Reserves: $10.1 million cash; 1,056 BTC treasury.
• Debt: $31.2 million long-term; ~$8 million short-term (BTC-denominated loan).
• Adjusted EBITDA: Loss of $10.7 million (non-GAAP).
• AI Infrastructure: 3 MW Georgia site completed early July 2026.
• Depreciation: $16.9 million (down from $29.4 million).
• G&A: $8.4 million, including $647,653 related-party fees.

Risks

• Potential regional power curtailment during July and August summer months.

Summary

Cango Inc. (NYSE:CANG) shifted toward unit economics by rightsizing mining operations and launching AI infrastructure commercialization. Management proactively reduced hashrate, retired inefficient S19 hardware, and moved capacity to a leasing model. A Bitcoin hedging program was introduced to manage price volatility. Since quarter-end, the company completed its first AI site in Georgia and signed its initial customer contract.

• Georgia site supports up to 3 MW with expansion capability.
• AI revenue expected in Q3 2026 following post-cutoff contract signing.
• Newer S21 machines now exceed one-third of operational self-mining capacity.
• Hedging uses short-term BTC loans to reduce cash-flow sensitivity.
• Power price reduction mechanisms tied to Bitcoin price movements.
• Evaluating additional AI sites in Texas and on the West Coast.

Industry Glossary

• ASIC: Application-Specific Integrated Circuit for Bitcoin mining.
• Bare-metal GPU hosting: Physical GPU resources without virtualization.
• Colocation: Data center space, power, and cooling for customer hardware.
• EH/s: Exahashes per second; one quintillion hashes per second.
• Hashrate: Total computational power for mining and transaction processing.
• S19 / S21: Bitmain mining machine series.

Full Conference Call Transcript

Operator: Welcome to the Cango Inc. Second Quarter 2026 Earnings Conference Call. [Operator Instructions] I now turn the call over to Paul Yu, CEO.

Paul Yu: Thank you. We deliberately scaled back mining operations as planned, and that is reflected in our second quarter results. Since quarter-end, we completed our Georgia AI infrastructure site and signed our first customer contract, moving that business from build-out into commercialization. These AI developments occurred after June 30 and are not reflected in this quarter’s results. Total revenue was approximately $50.8 million, with $47.4 million from Bitcoin mining. Net loss was approximately $81.6 million, mainly driven by noncash impairment and disposal losses on mining machines. As of June 30, we held 1,056 Bitcoins. Cash, cash equivalents, and cryptocurrencies totaled approximately $23 million, while long-term debt was $31.2 million.

We continued to rightsize mining, disposing of lower-marginal-efficiency machines and introducing a leasing model to focus on economics rather than scale. Self-mining hashrate was 19.84 EH/s and leased hashrate was 7.74 EH/s, for a combined 27.58 EH/s. Under leasing, the lessee bears direct operating costs, reducing our variable cost exposure. We mined 656 Bitcoins, down sequentially due to capacity restructuring. We will continue to evaluate self-mining versus leasing based on economics and keep phasing out legacy capacity. We also began a hedging program to manage Bitcoin price volatility. Average cash mining cost was $73,313 per coin, down about 5% from Q1.

On AI infrastructure, construction at our Georgia site was completed in early July, supporting up to 3 MW with room for expansion. Container units are being installed and GPUs are arriving in batches. Since the start of Q3, we signed a customer contract and are in discussions with prospective customers, taking the AI business into commercial monetization. Contracted revenue is still small; we expect to begin recognizing it in Q3. We plan to pursue bare-metal GPU hosting and colocation, though colocation terms are still being worked out. We have test nodes in Texas and on the West Coast and are evaluating additional sites, including potential owned facilities.

Our priorities for the second half are managing the self-mining and lease hashrate mix, executing AI deployment, signing new customers, and building on the Georgia operating experience while evaluating further site expansion. Capital discipline and operating efficiency remain priorities.

CFO Simon Tang: Thanks, Paul. All amounts are in U.S. dollars unless otherwise noted. Total revenue was $50.8 million; mining revenue was $47.4 million with 656 BTC mined. Average cash mining cost was $73,313 and all-in cost was $98,405. Revenue decreased roughly 50% QoQ due to proactive hashrate reduction and the leasing transition. Cost of revenue excluding depreciation was $50.7 million, down from $99.6 million. Depreciation was $16.9 million, down from $29.4 million. G&A was $8.4 million. Impairment was $42.9 million and disposal loss was $8.5 million. Crypto fair value loss was $4.1 million versus $151.8 million in Q1, driven by lower Bitcoin prices partially offset by hedging.

We implemented a Bitcoin hedging program to reduce cash-flow sensitivity to price volatility; it is a risk management tool, not speculative. The short-term BTC-denominated loan of approximately $8 million is on the balance sheet. Operating loss was $80.6 million; net loss from continuing operations was $81.6 million. Non-GAAP adjusted EBITDA was a loss of $10.7 million. Cash was $10.1 million; treasury held 1,056 BTC; mining machines net value was $58.7 million. Long-term debt was $31.2 million.

Operator: Our first question is from Pingyue Wu, Citic Securities.

Pingyue Wu: Three questions: Can management provide detail on the hedging program’s notional size, instrument structure, and duration, and clarify whether it is risk-mitigating or directional? Regarding AI progress, was the Georgia milestone material to Q2, and can it be incorporated into Q3 models? What is the timeline and revenue contribution from the new customer contract?

Simon Tang: The hedging program is a short-term BTC loan, reflected as short-term debt of ~$8 million, sold at spot. If Bitcoin falls below that level, we repay with mined BTC. This is purely risk management.

Paul Yu: AI developments occurred after June 30; only immaterial property costs were capitalized in Q2. AI revenue is expected in Q3, initially modest, validating commercial viability.

Operator: Next question from Siddharth Rajeev, Fundamental Research Corp.

Siddharth Rajeev: Should Q3 mining revenue stabilize or see further hashrate cuts?

Simon Tang: Hashrate is unlikely to change significantly, but summer power curtailment is possible.

Siddharth Rajeev: Current S19 versus S21 mix?

Simon Tang: Excluding leased capacity, S21 is slightly above one-third of operational self-mining.

Siddharth Rajeev: Cash cost outlook and further reductions?

Simon Tang: Costs optimized via host-site negotiations; many contracts have power price reduction mechanisms tied to Bitcoin price, providing downside protection.

Siddharth Rajeev: How much mining infrastructure could convert to AI over three years?

Simon Tang: Focused on our 50 MW Georgia site, with small test nodes at partner sites elsewhere; evaluating owned builds.

Operator: That concludes Q&A. Thank you for attending.

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