Cango Inc. (NYSE: CANG) released the unaudited results of its first quarter 2026 financial statement, reporting a net loss of $261.1 million.
However, most of these losses came as a result of non-cash charges. The company also reported that it eliminated its balance sheet debt in one quarter while simultaneously enhancing its entry into the AI computing market.
Why isn’t Cango’s $261 million loss a problem?
$151.8 million of the total net loss came from changes in the fair value of Bitcoin collateral receivables, a non-cash accounting charge driven by the decline in Bitcoin prices, while another $49 million reflected impairment losses on mining machines, also caused by the same price decline.
Together, these two components account for more than three-quarters of the reported loss.
Bitcoin fell 22.6% during the first quarter of 2026, and this was driven by delays in major cryptocurrency legislation, concerns about the macro economy, and uncertainty about the Federal Reserve’s leadership, among other factors.
Mining revenues also suffered as a result, collapsing to a post-halving low of roughly $28 to $30 per petahash per second per day by early March.
As of June 1, the Bitcoin hash price index stands at $0.034 for 1 Tbps of hash power per day, according to data from The Block.
Public miners are also giving away their bitcoins in droves to fund pivots toward AI infrastructure. Sold collectively A record high of 32,000 BTC was generated during this quarter.
Kangoo registered $102.0 million in total revenue, with $98.4 million coming from Bitcoin mining. The company mined 1,266 Bitcoin during the quarter for a total operational hash rate of 37.01 exahash/s, including 27.98 exahash/s from self-mining and 9.02 exahash/s from rented hash rate.
Cost of revenue decreased from $155.3 million in the prior-year quarter to $99.6 million, driven by lower electricity and hosting costs following the deliberate reduction in hash rate that accompanied the phase-out of legacy S19 series devices.
How will debt reduction actually impact Kangoo’s strategic position?
Beyond its main loss, Cango reduced its long-term debt from $557.6 million to $30.6 million, a 94.5% reduction, by offloading approximately 4,451 BTC, roughly 60% of its holdings at the time, to pay off related party debts.
The company ended the quarter with 1,026 BTC in reserve along with $7.2 million in cash, down from $41.2 million at the end of 2025.
According to Cango’s April 2026 operational update, the company’s average cash cost per bitcoin fell to $68,061 in April from $76,928 in the first quarter, a 9% sequential decline that management attributes to fleet optimization and the ongoing transition from legacy S19 hardware to more efficient S21 series miners. Kanjo’s Bitcoin reserves rose to 1,057 BTC by the end of April. At 31.58 EH/s, the operating gross hash rate was lower than Q1 as the fleet transition continued, but the margin profile improved.
CFO Simon Tang said: “Despite a challenging quarter impacted by industry adjustments and non-cash impacts, we made tangible progress in improving our cost structure and strengthening our balance sheet. We reduced long-term debt and achieved sustained reductions in cash mining costs through disciplined execution.”
How far is Cango’s AI pivot?
During the first quarter, Cango launched EcoHash technology built around modular and containerized GPU compute modules targeting the AI inference and HPC market.
According to Cango, it is currently conducting pilot deployments, with the roadmap starting with leasing GPUs and scaling them, the company says, toward a global AI-powered computing network. In April, the launch followed Through completion From a strategic investment of US$65 million and convertible bonds of US$10 million, indicating that external capital is being mobilized to finance the expansion.
“By leveraging our global power grid and operational expertise, we are well positioned to drive efficiency, seize emerging AI computing opportunities, and deliver long-term sustainable value,” said Paul Yu, CEO of Cango.
While the debt is gone, work continues in Canggu. The company posted an adjusted EBITDA loss of $154.1 million, which, when compared to the $1.7 million loss it posted in the same period in 2025, highlights the reasons the company needs to recover.
