Cango Inc.’s pivot from Bitcoin mining toward AI computing infrastructure took shape in its second-quarter results, as the company reported $50.8 million in revenue but an $81.6 million net loss largely tied to writing down and disposing of older mining equipment.
Bitcoin mining supplied $47.4 million of revenue in the quarter ended June 30, according to Cango’s unaudited earnings release. The remaining $3.4 million came from other revenue. The company mined 656 BTC while reducing its operating fleet, phasing out older S19-series machines and moving part of its capacity into a hosting-and-leasing model.
The reported loss included a $42.9 million non-cash impairment charge on mining machines and an $8.5 million loss on disposals. Those charges accounted for more than half of the quarter’s $81.6 million net loss from continuing operations, suggesting the result reflects a substantial reset of Cango’s mining asset base rather than mining operations alone.
Cango’s operating loss narrowed sharply from $254.4 million in the first quarter to $80.6 million in the second. Adjusted EBITDA, a measure that excludes items such as depreciation and certain non-cash charges, was a loss of $10.7 million, compared with a $154.1 million loss in the prior quarter. The second-quarter figure included a $4.1 million loss from changes in the fair value of crypto assets.
Lower hashrate cuts revenue while costs fall
Second-quarter revenue fell about 50% from the first quarter as Cango reduced its operating hashrate and removed less-efficient miners. Total operating hashrate stood at 27.58 exahashes per second, or EH/s, at the end of June. That included 19.84 EH/s from self-mining machines and 7.74 EH/s from leased hashrate.
The smaller mining footprint reduced production volumes, but it also brought operating costs down. Cost of revenues excluding depreciation fell to $50.7 million from $99.6 million in the first quarter, while depreciation expense declined to $16.9 million from $29.4 million.
Cango said its average cash cost per Bitcoin declined about 5% quarter over quarter to $73,313. That metric tracks direct cash spending required to produce a Bitcoin and excludes depreciation and impairment charges. The reduction gives the company a somewhat lower operating threshold, though the cost level remains sensitive to changes in Bitcoin’s price, network competition and electricity-related expenses.
General and administrative costs, including related-party items, totaled $8.4 million. Total operating costs and expenses were $131.4 million for the quarter, reflecting the impairment, disposal charge, depreciation and crypto-asset fair-value loss alongside routine mining and corporate expenses.
The results show the near-term trade-off in Cango’s strategy: less mining capacity produced less revenue, while equipment retirements created a large accounting loss. Removing aging machines could reduce exposure to higher-cost hardware, particularly when network difficulty rises and older rigs generate weaker returns.
Mining assets reset as hedging begins
Cango ended the quarter with a net book value of $58.7 million for its mining machines, after recognizing the impairment and disposal losses. The lower carrying value means future depreciation charges could be reduced, although the company will also have a smaller base of mining hardware available for self-operated production.
The company held $10.1 million in cash and cash equivalents on June 30, up from $7.2 million at the end of March. It also reported 1,056 BTC as inventory. Long-term related-party debt reached $31.2 million, compared with $30.6 million three months earlier.
Cango also began a Bitcoin hedging program during the quarter, with related short positions recorded on its balance sheet. A short hedge is generally designed to offset losses in the value of Bitcoin held or expected to be mined if the market price falls. The program introduces another layer of financial management for a company whose revenue and inventory remain closely tied to Bitcoin prices.
The earnings release did not provide detailed hedge volumes or pricing, but the move places part of Cango’s exposure under active risk management rather than leaving all mined Bitcoin and inventory exposed to spot-market swings.
Georgia site prepares for GPU hosting revenue
Alongside the mining restructuring, Cango completed a modular retrofit at its LN site in Georgia in early July for AI computing workloads. The infrastructure can support up to 3 megawatts of capacity, marking an initial physical deployment for the company’s planned data-center services operation.
Cango said server racks had been delivered and installed, while GPU hardware had been purchased with deliveries scheduled in stages. The company expects to begin recognizing revenue from the Georgia buildout during the third quarter.
The AI infrastructure effort is organized around two service lines: bare-metal GPU hosting and colocation. Bare-metal hosting provides customers with dedicated physical servers rather than virtualized computing resources, while colocation involves housing and supporting customer-owned hardware in a facility with power, cooling and network connectivity.
Test nodes have also begun operating in Texas and on the U.S. West Coast. These deployments suggest Cango is testing operational capacity across multiple locations rather than relying solely on the Georgia site.
The transition gives Cango a potential source of revenue less directly connected to Bitcoin block rewards and mining difficulty. Yet the company’s second-quarter figures also show that the new business is not yet contributing reported revenue. For now, Bitcoin mining remains the dominant operating line, while the AI hosting buildout is being funded and developed during a period of lower mining output and substantial equipment write-downs.
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