Bgin Blockchain (NASDAQ:BGIN) Q4 2025 Earnings Call

0:00 Good morning and good evening, ladies and gentlemen. Thank you for standing by. Welcome to BGIN's Earnings Conference Call. At this time, all participants are in a listen only mode. We will be hosting a question and answer session after management's prepared remarks. Please note that today's event is being recorded. I will now turn the conference over to Jennifer Jiang, Investor Relations Director of the company. Please go ahead, ma'am. Thank you. Hello, everyone, and welcome to BGIN's earnings call for the full fiscal year 2025. With us today are CEO, Qin Feng Wu Chairman, Xuehua Li Chief Corporate Development Officer, Reshua Mirza Co CFO, Zhao Xian and Finance Director, Carrie Wang.

0:48 Reshwan will provide a business overview for last year. Then Carrie will discuss the financials in more details. Following their prepared remarks, CEO Qin Feng Wu, Chairman Chew Hua Li and CFO Zhao Xiang will be available for the Q and A session. You can refer to our yearly financial results on our IR website at ir.bbqing.com. You can also access a replay of this call on our IR website when it becomes available a few hours after its conclusion. Safe Harbor statement. Before we begin, I would like to remind everyone that certain statements made during this call are forward looking in nature, including but not limited to statements regarding the company's future plans and partnerships.

1:41 These statements involve risks and uncertainties that are based on our current expectations and projections. You can identify these forward looking statements by words or phrases such as aims, anticipates, beliefs, estimates, expects, intends, plans, potential, projects, will, would, should, could, may, or similar expressions. Although not all forward looking statements contain these identifying words, the company undertakes no obligation update or revise publicly any forward looking statements to reflect events or circumstances that occur after this call or changes in its expectations, except as may be required by law.

2:36 Although the company believes that the expectations expressed in these forward looking statements are reasonable, it cannot be assured that such expectations will turn out to be correct. The company cautions investors that action results may differ materially from preliminary or anticipated results and encourages investors to review other factors that may affect its future results in the company's registration statements and other filings with the U. S. Securities and Exchange Commission. Thank you. I will now turn the call over to the Chief Corporate Development Officer of the Beijing, Reswan Thank you, Jennifer.

3:23 Good evening, everyone, and welcome to Bgin's inaugural earnings call as a publicly traded company. I'm Reswan Mirza, chief corporate development officer of Bgin Blockchain Limited. 2025 was a transformative year for us. In addition to our successful IPO last October, we also proactively refocused our r and d capabilities away from our initial core Altcoin chip business and towards the larger cap cryptocurrencies. We primarily focused our r and d efforts on Bitcoin and Dogecoin in 2025 and continue to do so in 2026. These efforts are already yielding results. In March of this year, the company successfully developed a four nanometer Bitcoin miner prototype based on the b t one ASIC chip.

4:13 This represents a major technical milestone and serves as a powerful validation of our execution capabilities. Today, I will walk you through our three core revenue engines, starting with the bedrock of our company, hardware sales. Engine one, proprietary hardware and innovation. Our journey began in 2019 when our founders seeking to enter into the self mining business and facing a shortage of available miners chose to design their own mining rigs. This engineer first mindset allowed us to be self sustaining from day one using mining machine sales revenue to fund successive generations of r and d. To date, we have successfully executed seven tape outs and developed 29 distinct mining models with nine currently in active deployment.

5:04 In 2024, our focus on altcoins such as Caspa and Alio generated $192,000,000 in sales of mining machines. In 2025, mining machine sales declined to $15,000,000 driven by market volatility and our strategic decision to prioritize our Bitcoin and Dogecoin transition. Looking ahead, our road map is clear. We are accelerating the next generation advanced architecture to optimize the combination of energy efficiency and costs to deliver superior operating performance in Bitcoin and Dogecoin mining. Engine two, high efficiency mining operations. Our management team has prioritized operational excellence over raw scale.

5:52 To maximize margins, we optimized our fleet in early twenty twenty five, phasing out older CASPA units in favor of next generation efficiencies. We swapped out our older KS five miners with our more efficient KS five seven machines. Our focus on operating efficiencies allowed us to deliver $42,900,000 in mining revenue in 2025, holding remarkably steady against the 45,000,000 record dollars recorded in 2024. We continue to seek continue seeking additional sites to grow our mining farm power capacity under the same disciplined operating efficiency parameters. Engine three, scalable hosting services.

6:40 Our third engine, hosting, generated $3,300,000 in 2025. While smaller in scale, this remains a low capital investment, high gross margin business. We provide small to midsize miners with turnkey solutions through two flexible models, fixed rate hosting for predictability and a revenue share partnership for performance alignment. This model allows us to monetize our operational expertise without the heavy CapEx typically required for capacity expansion. The synergy of these three engines creates a natural hedge against market volatility in the cryptocurrency industry. In bull markets, we capitalize on surging hardware demand and peak sales margins. In bear markets, we pivot to efficiency first self mining and cost controls.

7:30 While across all cycles, hosting provides a resilient high margin foundation of recurring cash flow. We continue to enhance our hosting capabilities. For example, to further refine our software infrastructure to support Bitcoin and Dogecoin hosting in the future, we have targeted our cloud mining hosting product towards Alio miners. Initial feedback from customers utilizing our cloud mining platform has been positive, and we plan to build on that momentum. In 2026, we will continue along our transformational journey from an Altcoin chip designer into a fully integrated digital asset infrastructure platform. While Bitcoin is our primary focus, we maintain the flexibility to capture opportunities in promising Altcoins when market conditions align.

8:21 In addition to commercial miners, we are also exploring opportunities to expand our machine sales into the B2C segment. Next week, at the Bitcoin twenty twenty six conference in Las Vegas, we will debut a prototype of our portable BTC. It is a commemorative prototype model created to mark our entry into the Bitcoin mining hardware journey. As BGIN continues to explore value added consumer driven miners in line with our focus on democratizing crypto mining, this prototype is an early stage sample of a rewards based approach to crypto mining. Although the prototype to be shown at the Bitcoin twenty twenty six conference is limited and not for sale, future commercial nonlimited products will follow.

9:07 Our retail miner offering should enable consumers to bring Bitcoin mining into their homes. This aligns with our mission, crypto for all. I would like to discuss our four key priorities for 2026. First, we will continue enhancing our research and development capabilities to deliver competitive mining solutions. Second, our mining operations remain anchored in cost effective energy strategies and power sources that provide structural advantages. Third, we are exploring cloud mining and new consumer focused product lines to democratize access to cryptocurrency mining. Fourth, while large cap cryptocurrencies such as Bitcoin and Dogecoin are our primary focus, we will maintain the flexibility to opportunistically capture opportunities in promising smaller cap altcoins.

9:59 We made difficult choices in 2025, choices that position us for success in 2026 and beyond. We are confident in building the world's most cost effective digital currency mining infrastructure, straying true to our vision of crypto for all and executing on our b two c strategy to deliver sustainable long term value for our shareholders. Thank you for your trust and support. I will now ask my colleague, Carrie Wong, to go over the 2025 financial results in detail. Carrie? Thank you. Thank you, Ruth. Good day, everyone. This is Carrie Wong, finance director of BGIN. I am very pleased to walk you through our full year 2025 financial performance. Before diving into numbers, let me provide you an overview of our results.

10:47 2025 was our pivotal transformation year, a year where we made strategic decisions to reposition BGIN for our diversified Altcoin chip supplier to a large cap coin focused infrastructure company. The financial results reflect this strategic pivot, and I will help you understand the story behind the numbers. We recorded a net loss of $177,000,000 in 2025 compared to net income of $66,100,000 in 2024. The majority of the loss are noncash items, includes inventory provision and write off of obsolete alkaline mining machines and also impairment of property and equipment as well as others.

11:37 These write offs, provisions, impairments resulted from our asset of certain product lines and reflected proper accounting treatment of assets that were no longer aligned with our business direction. As we move forward, our balance sheet is now better positioned to support our Bitcoin and Dogecoin strategy. Meanwhile, we redirected substantial capital into R and D to fund our proprietary ASIC chip development with primary focus on Bitcoin and Dogecoin mining technologies. One result we see from our R and D investments is our successful four nm Bitcoin ASIC tape out in March 2026. Now let's dive into the financial details.

12:23 Start with our top line. Total revenue of 2025 was $67,400,000 down from $302,300,000 in 2024. This decline accompanied our strategy shift from altcoin machine sales to building Bitcoin infrastructure business. Let me break down our revenue by segment. Mining revenue came in at $42,900,000 essentially flat comparing to $45,000,000 in 2024. Despite our transformation, our mining operations remain resilient. The slight decline was mainly driven by lower average price for ALPH and our strategic decision to cease iron mining during the year.

13:10 Sales of mining machines were $15,300,000 compared to $192,200,000 in 2024. The change resulted from the decline in average selling price of our CAS mining machines and also the decreased sales volume, driven by increased market competition and decreased customer demand. As we have transitioned our focus to Bitcoin and Dogecoin infrastructure, CAS mining machine sales have worn down accordingly. Hosting revenue was 3,300,000 down to $6,200,000 in 2024. The change was mainly due to the reduced customer demand caused by cap price volatility. Mining pool revenue contributed $5,900,000 compared to $58,800,000 in 2024.

14:01 The change resulted from three factors: lower average CAS prices, reduced mining of other cryptocurrency during our strategic refocusing, and stricter pool entry requirement that reduced the participating minors in 2025. Now let's look at our cost structure. Total cost of revenues were $143,000,000 down from $1.70 $104,600,000 in 2024. The decrease was primarily driven by lower machine sales volume, although this is partially set off by increasing mining costs as we deploy additional capacity into mining. Cost of mining revenue increased to $63,300,000 from $29,700,000 in 2024.

14:54 The increase is a result of combined impact from an increase of $11,500,000 in depreciation costs attributable to the deployment of additional mining machines in 2025, an increase of $1,700,000 in other costs, primarily comprising logistics, duties, rental costs, and labor, driven by higher operating costs associated with the increased number of mining machines deployed, and an increase of 20,400,000 in utility expenses, which was consistent with the higher average number of mining machines we deployed in 2025. Cost of sales of mining machines were $71,200,000 down from $81,700,000 in 2024.

15:46 We sold fewer units, less than 10,000 units in 2025 compared to more than 100,000 units in 2024, resulting in a $32,000,000 decrease in cost of sales. We also rolled off $3,000,000 in obsolete mining machines and components in 2025, comparing to $24,100,000 write off in 2024. The decrease was offset by an significant increase in inventory provision of 46,700,000 recognized based on net realizable value assessments following the decline in cash prices. Costs of hosting revenue decreased to $2,600,000 from 4,900,000 corresponding with the decrease in hosting revenue.

16:36 The absence of significant change in gross margin in 2025 actually reflects the continued maturation of the business. Cost of mining pool revenue dropped to $5,800,000 to $58,300,000 also corresponding with the mining pool revenue decline. Moving to operating expenses. G and A expenses increased $13,900,000 from $7,200,000 in 2024. Let me explain the key drivers. We invested $2,800,000 more in employee salaries and benefits to support our business expansion, particularly our growing U. S. Operations. We saw a $2,700,000 increase in professional fees, primarily related to our successful IPO in October 2025.

17:31 We also recorded $1,600,000 increase in credit loss provisions versus 2024. These increases were partially offset by a $2,400,000 decrease in merchant service charges due to the reduced machine sales volume. R and D expenses increased 23% to $20,200,000 in 2025 from $16,400,000 in 2024. This was a strategic investment. Funding our proprietary ASIC chip development for Dogecoin and Bitcoin mining machines. This R and D investment directly enabled our successful four nm Bitcoin ASIC tape out in March 2026. Our net loss was 177,000,000 compared to the net income of 66,100,000 in 2024.

18:25 A significant part of this loss among other non cash costs and expenses, approximately 126,000,000 represented depreciation, inventory provision, write offs, and impairment of property and equipment that came from the machine and parts of our Altcoin product lines. Provision, write offs, and impairment were prudently assessed by the company with the support from independent third party appraiser to reflect the fair value of these assets. This prudent assessment was a necessary step to fairly present our balance sheet and with validating results aligned to our strategic pivot into large cap points. Basic and diluted net loss per share was $1.62 compared to the net income per share of $0.61 in 2024.

19:21 Now, let's talk about our financial position. As of 12/31/2025, we held $26,300,000 in cash and $22,500,000 in cryptocurrencies. They give us a total liquidity of 48,700,000 Let me be clear about our runway. Our financial culture is rooted in capital efficiency. Until our IPO in 2025, which is our first ever external financing, we relied entirely on operating on internally generated cash flow. This created a DNA where every dollar is focused on return on investment, and this discipline remains central to how we operate today.

20:07 With our current liquidity position, we are able to allocate our capital to maintain our product pipeline, to support our intended expansion of mining sites, to further enhance our energy efficiency, and to continue investing in R and D to maintain our technology leadership. Our IPO has provided us with strategic flexibility we never had before. As we look ahead, future capital raises will directly determine our capacity ramp speed and technology iteration cycles. We will continue evaluating financing opportunities based on clear return on investment metrics. Unit capital leverage per MW deployed, per terahash produced, and per dollar of revenue generated.

20:57 The difficult decisions we made in 2025, the strategic pivot from Altcoins and the increased R and D investment into large cap points has positioned us to deliver growth across all three revenue engines like Rex described. We have financial discipline, the technical execution capability, and the strategic vision to build the world's most cost effective mining infrastructure while delivering sustainable long term value to our shareholders. Thank you. And that concludes our prepared remarks. Back to you, operator. We are now ready to take questions. Thank you. We will now begin the question and answer session. To ask a question, please press 11 Our first question comes from the line of Anshi Wang of China Renaissance.

22:01 Your line is now open. Please go ahead, ma'am. Hi, thanks for your presentation. So I have two questions here. The first one is, I know some like other industry players are pivoting to AI. So why isn't BGIN is doing that? And the second question would be, what differentiates BGIN from other industry players who also have chip design and mining capabilities? Thank you. Thank you, Angie. I'll leave this question for the Chairman to answer. Oishi Chewali, please go ahead.

22:49 Oh, okay. Hello. I'm chairman of BGIN. Actually, thanks for the for the question. And look. It's a really fair questions. We have seen a number of player in this space, p v two AI. And I understand why investor are curious. But the honest answer is we are really good at what we do. We have complete seven simple chip tap ups. We know how to decide. We know how to build and run the high efficiency mining operation, and we know how to manage power infrastructure. That's our age. And we think it's a meaningful one.

23:37 That's it. We are not wearing brightly brighter. If we seen an opportunity where our capability, chief decides power management facility operation can create real value in adjacent area, we absolutely evaluate it. Before careful assessment and evaluation on real opportunity, we choose to state discipline and deliver result in the area where we have proven expertise. And for the for the for for for the question two yeah.

24:24 It's really great questions. But the biggest difference is that we owe our entire stack. We design our old chips. We owe our mining facility. We run the operation ourselves. That's quite unique in this industry, and it gave us it gave us a level of cost control and flexibility that hard to replicate. A good example of why we that matter. In 2025, when customer price dropped sharply, we were able to move quickly. We phased out older units, and we placed them with our high efficiency case seven models.

25:13 On our old timeline without having to wait for someone else to make a decision. And then that's a busy model itself. We have three wherein revenue engines, hardware sales, self mining, and hosting. They naturally balance each other across market cycles. When crypto price are strong, hardware demand is robust. When price softens, we shift towards self mining where we benefit from lower level hedge rates. And hosting provides steady recurring revenue regardless of where the market is.

26:01 That is how we managed to see stable mining revenue in 2025 even through a challenge transition year. And thank you. Thank you for the questions. One moment for the next question. Our next question comes from the line of Vincent. Your line is now open. Please go ahead. Hi. Thanks so much for taking my questions. My name is Vincent. I'm an individual investor. So I have three questions today. I'll go through those one by one. So the first question is, can you walk us through the key drivers behind the significant impairment charges recorded in 2025?

26:51 Okay. This is a finance question. I will leave this for CFO, Zhao Xiang, to answer. Zhao Xiang, Mark, go ahead. Okay. Thank you, Vincent. My name is Zhao Xiang, Mark, and I and the c co CFO of BGIN. Let me answer your question. We recorded a 42,600,000 impairment of of PPE, primarily as a result of the recoverability test performance over our asset group. The key assumption of the analysis include the simulated future cash price that is committed useful lives of this asset and the relevant OpEx, CapEx, and tax rate based on historic performance and expected adjustment.

27:57 Among these factors, the decreasing tariff price trend in 2025 played a significant role in the analysis. Average KS price fell about 43% year over year, where our average deployed fleet size Leonie doubled to about 25,000 units in 2025. We executed our strategic phase out of latency models in response to the market change, replacing some of them with high efficiency test seven unit by year end.

28:47 As a result, active team machines utilization dropped from over 18% at year end twenty twenty four to about 6% by the end of twenty twenty five, with the remaining active plates consisting primarily of CAS seven. Furthermore, we recognized a $62,300,000 inventory provision and write off based on a less reliable video licensee. The variation factored in the recent sales price, inventory turnover, market traders and expected future demand, all of which is debit or high collection with cash price trend.

29:48 To ensure the objective and prudence of this relation, we engaged an independent third party operator defending related over stranded paywall. Latency, outgoing models no longer align with our balance sheet objectives. As we transition into the non cash charge effectively de risk of our financial position, clearly historical burdens and positioning us for the next chapter of growth.

30:43 That's all. Thank you. Thank you. I appreciate the reply. So for my second question, you mentioned crypto for all is your mission beyond the portable BTC product. I guess, what are your specific BTC investment and product plans for this year? Thank you. I will leave this question for CEO, Allen of TingFengWu to answer. Allen, go ahead. Okay. Thank you, Vincent. Hello, everyone. I am Alan Wu, CEO. I will take this one. Crypto for all is in some new marketing mind for us. It has been in our DNA since 2019.

31:32 When we as founders started to get around the equipment shortage, everyone was facing better then. So let me walk you through what we are doing on the b two. First, beyond our commercial miners, we are actively pushing into the consumer sentiment. Next week at the Bitcoin twenty twenty We will be showing a prototype of something we portable BTC. Think of it as a commemorative piece. It marks our entry into the, and it is an early look at where we are consumer oriented money.

32:24 To be clear, the competence is limited, commercial version will follow. The idea is simple. We want people to do to be able to bring Bitcoin. And second, and this is often look over. Our hosting business is it sells b to c bridge. We give small and mid size miners 22 solution with flexible models, either fixed rate hosting, they want certainty or revenue share diamond. Our cloud mining product is targeted at value miners has been encouraging.

33:18 We are building on that and the main includes structure to support our Bitcoin and So portable BTC isn't a pivot. It is the natural next step in scaling the mission. We our integrated infrastructure to make more accessible period Thanks. Thanks for the reply. So my third question is on the Bitcoin chip timeline and commercialization.

34:03 So you achieved first pass silicon success on the four nanometer BT1 chip back in March. Can you provide more specific timelines on the mass production expected pricing and maybe how the energy efficiency compares to other industry players? Thanks. Yes. That's a great question. Our bitcoin chip program is the cornerstone of BGIN's transformation. So let me give you the context first. We tap out in October 2025. And on March 17 this year, we achieved first pass silicon success. Very first attempt.

34:51 It is a real validation of our engineering team's steps. Right now, we are in extensive test profiling performance across different operate operating conditions, corner case, the full picture. This is the phase where you turn a working chip into a commercial product, and we are taking the time to get it right. Now we are not ready to disclose go to market specific yet. We are progressing through our standard development playbook, testing, validation, higher production, and then commercial launch.

35:43 And we want to bring and we want to bring this to market until we are confident. It meets the performance and efficiency by our customers is We will provide more detailed guidance on timing, pricing, and expense as we get closer to launch. Please stay tuned. Thank you. Awesome. Thank you so much. Thank you for the questions. As there are no further questions, I would like to hand the conference back to management for closing remarks. Thank you again for joining our call today. If you have any further questions, please feel free to contact us or submit request through our IR website.

36:35 We're looking forward to speaking with everyone in our next call. Have a good day and a good night. Bye. That does conclude today's conference call. Thank you for your participation. You may now disconnect your lines.