Cango Inc. Earnings Call: Bitcoin Mining Drives Growth

Cango Inc ((CANG)) has held its Q1 earnings call. Read on for the main highlights of the call.

Cango Inc.’s recent earnings call revealed a balanced sentiment, highlighting both significant growth and notable challenges. The company reported substantial revenue growth driven by its Bitcoin mining operations, maintaining a robust cash position and improving loan quality. However, it also faced operating and net losses, high mining costs, decreased Bitcoin mining output in April, and elevated electricity expenses. The overall sentiment reflects optimism about opportunities in the Bitcoin mining sector, coupled with strategic efforts to tackle existing challenges.

Significant Revenue Increase

Cango Inc. reported a remarkable increase in total revenue for the first quarter of 2025, reaching RMB 1.1 billion. This substantial growth, compared to RMB 64.4 million in the same period of 2024, was primarily driven by the company’s Bitcoin mining business, showcasing its potential as a significant revenue stream.

Bitcoin Mining Expansion

The company mined 1,541 Bitcoin in the first quarter of 2025 and has ambitious plans to increase its hash rate capacity to 50 exahashes per second by the end of July 2025. This expansion is a testament to Cango’s commitment to scaling its Bitcoin mining operations and capitalizing on the growing demand in the sector.

Strong Cash Position

As of March 31, 2025, Cango held cash and cash equivalents totaling RMB 2.5 billion. This strong cash position provides the company with solid support for future business expansion and strategic investments, ensuring financial stability amid market fluctuations.

Improved Loan Quality

Cango has successfully reduced its total outstanding loan balance to RMB 2.6 billion, with improved M1+ and M3+ ratios of 2.86% and 1.59%, respectively. These improvements reflect the company’s effective management of its loan portfolio and risk mitigation strategies.

Expansion of AutoCango Platform

The AutoCango platform continues to gain traction, attracting over 2.37 million visits, with more than 290,000 registered users and 480,000 used car listings. This expansion highlights Cango’s efforts to diversify its business operations beyond Bitcoin mining.

Operating and Net Losses

Despite the revenue growth, Cango reported an operating loss of RMB 155.5 million and a net loss of RMB 207.3 million in the first quarter of 2025. These losses were primarily attributed to a decline in Bitcoin prices, impacting the profitability of its mining operations.

High Cost of Bitcoin Mining

The average cost to mine Bitcoin, excluding depreciation, was USD 70,602.1 per coin, contributing to increased operational expenses. This high cost underscores the challenges faced by Cango in maintaining profitability in its mining operations.

Decrease in Bitcoin Mining in April

In April, Cango experienced an 11.3% decrease in Bitcoin mining output, producing 470 coins compared to March. This decline was due to an increased global network hash rate and mining difficulty, posing challenges to maintaining consistent output levels.

High Electricity Costs

Cango faced elevated electricity costs due to the premium associated with power procurement under the hosted operation model. These costs have added pressure to the company’s operational expenses, necessitating strategic measures to optimize energy consumption.

Forward-Looking Guidance

Looking ahead, Cango provided detailed guidance on its financial and operational performance. The company reported total revenue of USD 145 million, with USD 144 million from Bitcoin mining, resulting in a gross profit of USD 13.61 million. Despite an operating loss of USD 21.42 million, Cango maintains a strong cash position with USD 347 million in cash, cash equivalents, and short-term investments. The company plans to expand its hash rate capacity to 50 exahashes per second by July 2025, reflecting its commitment to scaling operations. Additionally, Cango remains dedicated to its “Mine and Hold” strategy, focusing on self-mining and long-term Bitcoin holding, while exploring M&A opportunities to further enhance its market position.

In conclusion, Cango Inc.’s earnings call presented a mixed sentiment, with significant revenue growth driven by Bitcoin mining, alongside challenges such as operating losses and high costs. The company’s strategic initiatives, strong cash position, and expansion plans in the Bitcoin mining sector offer a promising outlook, despite the hurdles faced. Investors and stakeholders will be keenly watching Cango’s progress as it navigates the evolving financial landscape.