Cango Q1 Earnings Call Highlights

Cango (NYSE:CANG) reported first-quarter 2026 revenue of approximately $102 million, driven primarily by its Bitcoin mining business, as management said the company is prioritizing cost discipline and cash flow resilience over hash rate scale during a period of industry adjustment.

Chief Executive Officer Peng Yu said the quarter reflected “macro headwinds” and the company’s ongoing strategic transition. Cango reported a net loss from continuing operations of $261.1 million, which management attributed mainly to non-cash impairment charges on Bitcoin mining machines and losses from changes in the fair value of receivables for Bitcoin collateral tied to a decline in Bitcoin’s market price.

By the end of the quarter, Cango held 1,025.7 Bitcoin and reduced long-term debt to $30.6 million, down sharply from $557.6 million at year-end, according to Chief Financial Officer Simon Ming Yeung Tang.

Bitcoin mining revenue falls as Cango reduces hash rate

Cango generated $98.4 million in revenue from Bitcoin mining during the first quarter, mining 1,266.1 Bitcoin. Tang said total revenue declined about 43% from the fourth quarter of 2025, primarily because the company proactively reduced its operational hash rate as it began phasing out older and less efficient S19 series mining machines and temporarily shifted some capacity into a leasing model.

As of March 31, Cango’s total operational hash rate was 37.01 exahashes per second, including 27.98 exahashes per second of self-mining capacity and 9.02 exahashes per second of hosted hash rate. Peng said the company’s current operational model “prioritizes margin resilience over scale.”

The company’s average cash cost to mine one Bitcoin, excluding depreciation, was $76,928 in the first quarter, down 9% from the fourth quarter. Tang said the all-in cost was $99,747 per Bitcoin. Cost of revenue, excluding depreciation, fell to $99.6 million from $155.3 million in the fourth quarter, driven by lower electricity and hosting expenses following hash rate reductions.

Fleet upgrades and site changes aimed at lowering costs

Peng said Cango’s cost reductions were driven by the retirement of higher-energy-consumption S19 mining machines and the selective deployment of more efficient S21 series machines. He also cited migration of hash rate to regions with lower power costs, including locations such as Paraguay and Oman, and the use of temporary revenue-sharing arrangements at certain higher-cost mining sites.

As of the end of May, Peng said the company’s self-mining hash rate composition was approximately 80% S19 models and 20% S21 models. He said Cango is seeking to manage the mining segment toward an operational baseline that can support stronger cash flow resilience.

In April, Cango’s self-mining operations produced 230.04 Bitcoin, and Peng said the average cash cost per coin decreased further. As of April 30, the company operated a total hash rate of 31.58 exahashes per second across 26 active mining sites globally, comprising 20.43 exahashes per second in self-mining capacity and 11.15 exahashes per second in hosted capacity.

In response to an analyst question, Tang said Cango is not setting a hard hash rate target and is instead focusing on margin and cash flow metrics. He said total hash rate may experience modest short-term fluctuations as the company continues retiring older machines at higher-cost sites while selectively deploying S21 equipment.

Leasing model designed to limit cash losses at higher-cost sites

Management described the leasing or revenue-sharing model as a temporary arrangement, especially at some higher-cost mining sites. Under the structure, Tang said Bitcoin mined goes to the site owner, which then shares mining revenue with Cango based on agreed ratios. The site owner bears power, maintenance and operation costs.

“From a cash flow perspective, this leasing model ensures that we do not mine at a loss purely as a result of the higher cost,” Tang said. He added that the leased hash rate is mainly deployed in certain parts of America and may change as hosting contracts expire, new contracts are signed or machines are moved to alternative sites.

Balance sheet deleveraging and Bitcoin treasury shift

Tang said Cango’s cash and cash equivalents were $7.2 million as of March 31, down from $41.2 million at year-end, mainly because of debt repayments and operational activities. The balance sheet also included cryptocurrencies of $7.9 million and receivables for Bitcoin collateral of $68.2 million. Mining machines were carried at a net value of $130.8 million.

The company recorded depreciation of $29.4 million, general and administrative expenses of $7.2 million, an impairment loss on mining machines of $49 million and a $20.3 million loss on disposal of mining machines. The loss from changes in fair value of receivables for Bitcoin collateral was $151.8 million, compared with $171.4 million in the fourth quarter. Tang said the non-cash loss was primarily driven by Bitcoin’s price decline during the quarter.

Operating loss was $254.4 million, and adjusted EBITDA was a loss of $154.1 million, including a $151.8 million impact from the fair value loss on Bitcoin collateral receivables.

Asked about Bitcoin holdings, Tang said Cango’s treasury strategy has shifted from “mine and hold” to a more dynamic and balanced approach, with greater emphasis on liquidity and balance sheet strength. He said Bitcoin sales in the first quarter were mainly used to reduce Bitcoin-backed loans. As of April 20, Peng said Cango’s remaining Bitcoin reserves stood at 1,057.46 Bitcoin.

EcoHash AI infrastructure pilot advances

Cango also provided updates on its AI infrastructure initiative, EcoHash, which Peng said is intended to leverage the company’s power access and mining operational expertise to develop standardized compute solutions. He said pilot evaluation, site retrofitting and hardware installation at the company’s Georgia location had progressed significantly, with testing underway for modular high-density compute units.

Tang said the Allen site is Cango’s only fully self-owned infrastructure asset, with 50 megawatts of grid-connected capacity and a power contract in place through 2029. Construction and renovation are close to completion, and the company has placed orders for standardized compute containers that are arriving in phases for installation and testing.

The site is expected to serve as a real-world production environment and showroom for air-cooled, liquid-cooled and hybrid containers under different environmental conditions, Tang said. He added that Cango has not set a specific revenue target for the AI project, but revenue generation is expected to begin in the second half of 2026. The company’s immediate priority is completing technical validation of the pilot before working with partners to deploy additional compute nodes.

On funding, Tang said Cango is taking a phased approach. The company has used its own capital for site renovation, while the bulk of future project capital expenditures would be for server purchases. He said Cango is open to other financing structures, including GPU-backed financing, financial leasing models and strategic partnerships.

Peng said Cango’s 2026 priorities are to continue improving the cost efficiency of its mining business and to methodically advance the evaluation and technical testing of EcoHash.

About Cango (NYSE:CANG)

Cango Inc (“Cango”) is a leading smart automotive transaction service provider in China, headquartered in Shanghai. The company operates an online‐to‐offline platform that integrates vehicle sourcing, financing, distribution and insurance, offering a comprehensive ecosystem for automakers, dealers and consumers. Leveraging big data analytics and cloud computing, Cango connects buyers and sellers through its proprietary digital infrastructure, facilitating transparent and efficient transactions across the automotive value chain.

Cango's core offerings include auto financing solutions for new and used vehicles, extended consumer loans and wealth management products.

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