Intchains Group Ltd (ICG) 2025 Q4 法說會逐字稿

Thank you for standing by. Welcome to the Intchains Group Limited fourth quarter and full year 2025 earnings conference call. (Operator Instructions). I would now like to turn the conference over to Alice Zhang with the Equity Group. You may begin.

Thank you, operator. Good evening to everyone. Welcome to Intchains's fourth quarter and full year 2025 earnings conference call. Please be advised that the discussions on today's call will include forward-looking statements. These statements involve known and unknown risk and uncertainties and are based on the company's current expectations and projections regarding future events that may impact its financial condition, operating results.

And strategic direction although the company beliefs that the expectations expressed in these forward-looking statements are reasonable. It cannot assure you that such expectations will turn out to be correct, and the company cautions investors that actual results may differ materially from the anticipated results.

Investors should review other factors that may affect its future results in the company's registration statement and other filings with the SEC. The company undertakes no obligation to publicly update or revise any for statements to reflect subsequent events or circumstances or changes in its expectations except as required by law.

Please note that in today's call, we'll discuss certain non-GAAP financial measures. Please also refer to the reconciliation of non-GAAP measures to the comparable GAAP measures in the earnings press release. The presentation and webcast replay of this conference call will be available on the entrance website at www.ir.intchains.com.

It is my pleasure to introduce interim CFO, Mr. Chaowei Yan, who will provide an overview of full year 2025 financial results, recent operational achievements, and the company's long-term growth strategies before opening the floor for questions. Chaowei, please go ahead.

Thank you, Alice and welcome everyone. Any chance, engage in the design and development of outgoing mining machines, it accumulation and yield generating strategies, as well as the delivery of Web3 infrastructure services. Starting December 2025, following the completion of acquisition and launch of our Goldshell Stake platform, we also provide cryptocurrency staking services for individual and the institutional crypto investors.

Outgoing mining hardware and the Ethereum accumulation and the staking activities are the are the core pillars of our businesses, and with sales of our mining machines being the primary source of our revenues. As discussed in the past, we operate in an industry heavily influenced by cyclical volatility, and this has impacted net revenue for full year 2025.

Despite short-term market volatility, our ability to continuously and properly deliver state of the art mining products, showcases our business agility supported by a long-term commitment in R&D. 2025 was highlighted by launch of a series of mining products, including ALEO, Dogecoin, and XTM miners. In Q1, we introduced our first ALEO mining series to the market in response to the rapid growth of the crypto demand.

The launch achieved a strong customer adoption and contributed to substantially increased revenues in the first quarter. During the year, we also launched our groundbreaking BYTE, Goldshell BYTE dual manner, an innovative solution that allows our customers to maximize mining returns by switching seamlessly between algorithm cards, according to market conditions.

This new machine has generated significant market interest and the law supports mining, more support mining across six different cryptocurrencies using our proprietary algorithm cards. Throughout 2025, these products experienced rapid iterations with multiple additional product models released for ALEO and Dogecoin miners.

Late in this year, we introduced the XTM miners, another high-performing miner series, which accounted for a significant portion of our Q4 net revenues. Together, these products are launched have reinforced our market competency, reflecting interchange capabilities to seizing early market share in the innovative outgoing projects with the top tier next generation miners.

During the year, we also continued to explore ways to elevate our ETH Accumulation, holding, and staking strategies. On the ETH Accumulation side, we continued executing a disciplined and a self-funded ETH purchase strategy. Always mindful of prevailing market conditions and the price, more so during the second half of the year. 2025 was characterized by significant swings in ETH pricing.

Driven by macroeconomic uncertainty, shifting liquidity conditions, and the evolving institutional participation in digital assets. ETH experienced periods of sharp upward momentum followed by notable corruptions, creating a volatile but opportunity-rich environment. During a year full of volatility in ETH and overall crypto market, we adopted a more mindful approach in accumulating ETH.

And it took a conservative and strategic capital allocation approach in the second half of 2025. That's our long-term conviction in Ethereum ecosystem hasn't changed, and ETH remains the according to assets in our crypto treasury strategy.

As of December 31, 2025, we held a total of 8,826 ETH, increasing from 5,702 a year ago, growing this position by 56%. The same volatility continued in 2026 with ETH trading within a broader range as macro and peripheral sentiment fluctuated.

In February, it stabilizing a range that highlighted opportunistic entry points for long-term accumulation. As a result, we are pleased to announce that by February 23, 2026, we hit another significant milestone of our ETH Accumulation strategy, with over 9,000 units of ETH and remain one of the top players of ETH treasury holders.

Moving into the staking aspect of ETH holding, in 2025, we expanded our digital asset treasury to the, digital asset strategy, by partnering with FalconX to support ETH staking activities. Through FalconX institutional grade platform, we are able to securely state a portion of our ease holding, generating yield while maintaining operational flexibility, and a strong risk controls.

Furthermore, in December 2025, we acquired a group of stake platform and the launched Goldshell Stake platform, which operates as an independent PoS service platform under the Goldshell brand. As part of Intchains comprehensive Web3 infrastructure offering, we now provide cryptocurrency stake services for individual and institutional investors, converting ETH, our launch, Manta, and the Conflux.

And expected to expand this line business to broader international market, leveraging Goldshell's existing customer base and the market presence. I will provide additional details on dating strategy for 2026 shortly.

Turning to a summary of our full year 2025 financial performance as compared to fully 2024, FY 2025 revenue of RMB220.9 million or USD31.6 million decreased by 21.6% due to cyclical fluctuations in the market and softer demand for our products in this period.

Whereby our ALEO mining machine series contributed to increased revenues in the first six months in 2025 and overall demand for our product, products becomes softer during the second half. FY 2025 cost of revenue was RMB204.9 million or USD29.3 million, an increase of 56.1% impacted by impairment charge, impairment charges recorded against excess mining machines inventory for certain outgoing mining machines during the period.

FY25 total operating expenses were RMB120.6 million or USD17.3 million, decreased by 18.7%, primarily as a result of lower sales and R&D expenses. And primarily due to the reduced expenses, related to the preliminary research costs conducted for new outgoing mining projects.

As a result of lower revenues and gross margins, FY 2025 loss for operating was RMB104.7 million or USD150 million compared to the income from operations of RMB2.9 million. That's why 2025 interest income was RMB11 million or USD1.6 million decreased from FY 2024 mainly due to cash used to acquire ETH based cryptocurrency.

For the full year period, we recorded a gain in the value of cryptocurrency of RMB4.8 million or USD0.7 million, primarily a result of increased ETH holdings by 3,170 units since the beginning of the year, partially offset by an approximately decrease of 12.6% in each price during the period. Net loss for FY 2025 was RMB52 million or USD7.4 million compared to a net income of RMB51.5 million in FY 2024.

We continue to maintain a strong balance sheet. As of December 31, 2025, our cash position, which consisted of cash and cash equivalent, deposits, and government securities listed in long-term investment and short-term investments, was USD67.8 million. We had current assets of USD83.2 million, total assets of USD145.2 million, and total liability of just USD6.2 million.

And I would now like to provide an update to sales of our outgoing mining machines in Mainland China before discussing our 2026 strategies and business focus. On February 6, notice on further preventing and handling risks related to virtual currency was issued, prohibiting the provision of service such as sale of mining machines within Mainland China by mining machine production enterprises.

In response to the notice and the, and to ensure full compliance, we are enhancing internal control policies and undertaking, rectification measures. I would like to note that although our primary sales market have consisted of overseas or end users, as well as domestic channel partners within China, the company's business model is designed to serve a global customer base, and our channel partners purchase are primarily for export purpose.

So, as detailed in our earning release, management does not expect a notice to have a material adverse impact on company's business, financial condition, or result of operations. Now moving on to our 2026 business strategies. For 2026 and beyond, our growth is centralized on continued investment in R&D on the development and the sale of our Goldshell mining machines, and our ease accumulation and staking activities.

Supplemented with cost optimization to improve overall financial performance. In the first half of 2026, we remain focused on generating revenues from the sale of our existing mining machine series that were launched in 2025, including ALEO, Dogecoin, XTM, and.

Excuse me ladies and gentlemen, your conference will now resume. Chaowei, please go ahead.

Hi, sorry everyone. Let's continue for our, earnings, earnest conference call. So, 2026 is expected to be a year of margin improvements, due to steps we took to implement cost management and initiatives including workforce reduction and, for an organizational restructuring, aiming to enhance efficiency, optimize headcount, and operate with linear corporate level corporate model.

We believe these initiatives will enable us to force resources on core R&D efforts to maintain a leading position in outgoing mining product industry, driving further margin expansion for FY 2026 and beyond. Parallel to our outgoing hardware business, we are well equipped to enhance our ease accumulation and the transferring holding strategy.

In 2026, interchange participates continuing a prudent approach in ease purchasing by by pursuing selective, value-driven purchases when market conditions are favorable to gradually expand the ease treasury holding over time.

As of December 31, 2025, the fair value of our crypto currency assets other than stable coins such as USDC and USDT was RMB187.6 million or USD26.8 million, yeah, which includes, approximately 8,826 ETH based cryptocurrencies valued at RMB186.7 million. In 2026, interchange continued to accumulate ease and as of February 23, 2026, total ETH reached over 9,070 units.

As part of our efforts to generate incremental returns from idle assets, we plan to continue our dual-platform staking approach using Falcon X to stake ease we have accumulated in our Goldshell Stake platform to stake our third-party ease.

Staking on two platforms allows diversification and, we expect this practice of combination to maximize returns as we build our strategic ETH reserve and also from third-party staking. As an update, as of February 23, 2026, we have a total of 2,600 units of ETH or 28.7% of our total ETH country holding currently stated with 1,000 units or 11% staked in on FalconX and 1,600 units of 18% staked in on our own Goldshell Stake platform. Additionally, Goldshell Stakes currently stakes 1,359 units of ETH currently owned by crypto investors.

We remain optimistic about these initiatives, and we are implementing, combining sale of new and existing outgoing mining machines and a solid ease accumulation, holding and the staking strategy. Along with cost saving method we are undertaking to drive solid topline results and improve operational operation margins in 2026.

As a Web3 infrastructure provider, we have a market leading outgoing hardware business, and integrated hardware and software service portfolio such as Goldshell Valley and Goldshell Stake, and a prudent long-term ease strategy with staking service serving as a second growth engine beyond our mining machine business.

We have expanded into the blockchain infrastructure service sector. So, We are looking to further generate synergies across our business lines, capture and act on additional opportunities as we emerge.

With that operator, please open it up for questions.

(Operator Instructions) Matthew Galinko, Maxim Group.

Hi, thanks for taking my questions. I think you've covered this in the prepared remarks, but just to clarify, do you expect to launch, new mining products in the second half of '26 at this point?

Yes, we are targeting new outgoing mining machine in the second half, but it's also subject to market conditions and our R&D progress. Currently we have, multiple coins projects. It's under R&D process. Thank you.

Got it. Thank you. And on the, Goldshell Stake, I think you mentioned you have about 1,400 units of each, stake by, third-party investors. Did that come over with the acquisition or are those new users for the platform since you rebranded it?

I think it's both, yeah, the stake is ETH is about, the, we cannot, after the acquisition, I have, amount of growth in ETH unit. So it's, both, and half are prior to the acquisition and the and another half, post-acquisition. Thank you.

Thank you. Okay, I'll jump back in the queue.

(Operator Instructions). And we have no further questions at this time. I would like to hand it back to Chaowei Yan for closing remarks.

Yeah, thanks again to all of you for joining us. We are always open to a dialogue with investors. Please feel free to reach out to us or our investor relation firms, the equity group, for, any additional questions. We look forward to speaking with you all again on our next quarterly call. Thank you.

Thank you and ladies and gentlemen this now concludes today's conference call. Thank you all for joining you may now disconnect.