Intchains(ICG) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q1 2025 reached $18.2 million, representing a 78.5% quarter-over-quarter increase and exceeding previous guidance of $15 million to $16 million [7][14] - Gross margin improved significantly to 56.9%, up from 26.2% in the previous quarter, reflecting a 286.9% increase [8] - Operating income turned positive at $5.1 million, a recovery from the loss in Q4 2024 [8][15] - Net income was negative $4.7 million, impacted by a noncash revaluation loss of $9.8 million on cryptocurrency holdings [15][16] Business Line Data and Key Metrics Changes - The successful launch of the Allele miner series accounted for nearly 75% of total revenue in Q1 2025 [14] - Cost of revenue increased modestly from $7.5 million in Q4 to $7.9 million in Q1, growing at a slower pace than revenue [15] - The company reported positive operating income, distinguishing itself among crypto mining companies [15] Market Data and Key Metrics Changes - The total market cap of cryptocurrency declined by 18% during the quarter, with significant price drops for Ether, Dogecoin, and Allele [7][13] - Despite market headwinds, the company maintained a steady pace of Ethereum accumulation, increasing holdings by over 23% to approximately 7,043 units [9][16] Company Strategy and Development Direction - The company focuses on product optimization and operational efficiency, aiming to maintain a gross margin higher than the industry average for Bitcoin miners [11] - Plans to refine the gold point miner through chip upgrades and enhanced production design to become a top player in gold coin mining equipment [13] - The strategy includes exploring Web3 innovations to drive long-term growth and maintaining a long-term accumulation strategy for Ethereum [10][19] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the future of Dogecoin and plans to continuously upgrade the Dogecoin miner program [24] - Anticipated catalysts for long-term growth include interest rate cuts, regulatory support for crypto-linked ETFs, and advancements in blockchain applications [17][19] - The company remains confident in Ethereum's future and the broader blockchain ecosystem, projecting revenue for the first half of 2025 to be approximately RMB 180 million to 200 million [19] Other Important Information - As of March 31, 2025, cash, cash equivalents, and short-term investments totaled $74.9 million, up from the end of 2024 [16] - The company aims to standardize hardware design while leveraging technical expertise across multiple cryptocurrencies with the launch of the GoldShell Byte miner [29] Q&A Session Summary Question: Revenue mix and future mining rigs - Management is optimistic about the future development of Dogecoin and plans to continuously upgrade the Dogecoin miner program, aiming to become a top-tier supplier in the industry [24][25] Question: Potential of GoldShell Byte miner - The GoldShell Byte miner addresses the pain point of needing new machines for different projects, allowing miners to switch easily based on market conditions [29] Question: Inventory expectations - Most inventory consists of both coin miners and related chips, with plans to adjust prices based on market conditions to sell inventory rather than write it off [36][37] Question: R&D spending outlook - R&D spending is currently down but future projects may lead to increased spending, though specific timelines cannot be predicted [50][51]