Cango CEO Q2 Earnings Call: Mining and AI as Dual Core Businesses, Prioritizing AI Customer Deployment
- Key Takeaways: In Q2 2026, Cango proactively scaled down its Bitcoin mining operations and restructured assets, resulting in a net loss of $81.6 million. Meanwhile, its AI infrastructure business made substantial progress after the quarter-end, signing its first client contract and entering the commercialization phase.
- Key Elements:
- Q2 total revenue was approximately $50.8 million, with Bitcoin mining revenue at $47.4 million. The net loss of $81.6 million stemmed from non-cash impairment and disposal losses on mining machines.
- As of June 30, the company held 1,056 Bitcoins, with cash and cryptocurrencies totaling approximately $23 million, and long-term debt of $31.2 million.
- Self-operated hash rate stood at 19.84 EH/s, with leased hash rate at 7.74 EH/s, bringing total operational hash rate to 27.58 EH/s. The company mined 656 Bitcoins this quarter, with output declining quarter-over-quarter due to reduced self-operated capacity and the shift of some capacity to leasing.
- Average cash mining cost was $73,313 per coin, down 5% from the previous quarter. Hedging arrangements have been initiated to manage Bitcoin price volatility risk.
- AI business progress (post-early July): Construction at the Georgia LN mining site is complete, supporting up to 3 MW of capacity. GPUs have arrived in batches, and rack installation is in place.
- A first AI client contract has been signed, with revenue expected to be recognized in Q3. The business model includes bare-metal GPU hosting and colocation services, with the latter still under negotiation.
Hello everyone, and thank you for joining Cango's second quarter 2026 earnings call.
Performance Overview
Let me begin with a brief overview of the quarter. In our mining business, we proactively scaled down operations as planned—a shift that is reflected in our second-quarter results. On the AI front, since the end of the second quarter, we have made substantial progress on infrastructure build-out and signed our first customer contract, moving this business from the construction phase into commercialization. To be clear, these AI-related developments occurred after June 30, and therefore are not reflected in this quarter's financial results.
Turning to the numbers, total revenue for the quarter was approximately $50.8 million, with Bitcoin mining revenue contributing around $47.4 million. Net loss was approximately $81.6 million, primarily driven by non-cash impairment and disposal losses on mining machines—a direct result of our proactive restructuring of the asset base. As of June 30, we held 1,056 bitcoins. Additionally, our cash, cash equivalents, and cryptocurrencies totaled approximately $23 million, with long-term debt of around $31.2 million.
Now, let me provide more detail on both the mining business and the AI infrastructure business.
Bitcoin Mining Business
During the quarter, we continued to actively optimize the scale of our mining operations, disposing of less efficient mining machines and introducing a leasing model, shifting our focus from scale to economic efficiency.
As of June 30, our self-operated hashrate stood at 19.84 EH/s, with leased hashrate at 7.74 EH/s, bringing total operational hashrate to 27.58 EH/s. Under our leasing arrangements, the lessee bears the direct operating costs associated with that hashrate, which also reduces our exposure to variable costs.
We mined 656 bitcoins during the quarter. The sequential decline in production primarily reflects the intentional reduction in self-operated hashrate and the conversion of some capacity to leasing. We will continue to evaluate the mix between self-operated and leased hashrate based on economic returns rather than scale, and keep phasing out inefficient, older capacity.
During the quarter, we also began implementing hedging arrangements to manage our exposure to Bitcoin price volatility, thereby enhancing the predictability of operating cash flows.
Our average cash cost of mining in the second quarter was $73,313 per coin, down approximately 5% from the first quarter.
AI Infrastructure Business
Next, let's discuss AI infrastructure. A note on timing: everything I'm about to cover occurred after June 30, i.e., since the beginning of the third quarter, and is therefore not reflected in this quarter's financial results—but we wanted to share these updates with you.
On the infrastructure side: construction at our LN site in Georgia was completed in early July, and the site infrastructure can support up to 3 megawatts of capacity, with room for future expansion. Cabinets have been delivered and installed on-site, and GPUs are arriving in batches.
On the customer front, since the start of the third quarter, we have signed one customer contract, and discussions with potential clients are ongoing. This marks our AI business moving from the technical validation phase into the commercialization phase. This is a new development since the end of the quarter; contract revenue is still relatively small at this point, and we expect to begin recognizing related revenue in the third quarter.
In terms of business model, we plan to pursue two models in parallel: first, bare-metal GPU hosting, which leverages our existing site and power infrastructure to provide standardized deployment environments; and second, colocation services, which aim to improve overall infrastructure utilization. We have not yet signed any formal colocation contracts, and the terms are still under discussion.
We also have test nodes in Texas and on the West Coast, primarily to support future customers requiring proximity-based deployment. We are simultaneously evaluating several potential new sites and have not ruled out building our own facilities.
Strategic Outlook and Capital Allocation
We will continue to operate mining and AI as parallel business lines.
Looking ahead to the second half of the year, our priorities include: prudently managing the mix of self-operated and leased hashrate; executing on our initial AI deployments while continuing to sign new customers; and evaluating further site expansion based on the operational experience gained in Georgia. Capital discipline and operational efficiency remain our foremost considerations.
That concludes my remarks. I will now turn the call over to our Chief Financial Officer for a detailed review of the financials. Thank you.
