Breaking Down Cango Inc. (CANG) Financial Health: Key Insights for Investors

You're looking at Cango Inc. (CANG) and seeing a company that flipped its entire business model in a year, so you defintely need a clear map of the financials, not just the headlines. The key takeaway is this: Cango Inc. is no longer an auto-finance play; it's a major Bitcoin mining operator with a 50 EH/s capacity as of October 2025, but its financial health is a tale of two numbers. While the second quarter of 2025 showed total revenues of US$139.8 million, the reported net loss was a staggering US$295.4 million due to one-off, non-cash impairment and discontinued operations charges from the strategic shift. Still, the core mining business showed strength, delivering an adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of US$99.1 million for the quarter, plus the company holds over 6,400 BTC as of October 31, 2025, which provides a strong liquidity cushion as they expand into energy and High-Performance Computing (HPC) applications.

Revenue Analysis

You need to understand one core thing about Cango Inc. (CANG) right now: its revenue profile has been completely rewritten. The company's strategic pivot to Bitcoin mining has transformed it from a Chinese auto-focused service provider into a digital asset player, with this new segment generating nearly all of its revenue in 2025.

The near-term growth story is volatile but undeniable. Based on the last twelve months (TTM) ending June 30, 2025, Cango's revenue was RMB2.85 billion, representing a massive year-over-year growth of 380.74% as the mining operations scaled up. That's a staggering jump, but it's a one-time structural change, not a sustainable organic trend yet. The real story is the business mix.

Here's the quick math on where the money is coming from, based on the second quarter of 2025 (Q2 2025) unaudited results, which is the most recent full-quarter data we have. The old business is essentially gone. This is a crypto miner now, plain and simple.

The total revenues for Q2 2025 were US$139.8 million (RMB1.0 billion), and the Bitcoin mining segment contributed US$138.1 million of that. This is the clearest evidence of the strategic shift: the legacy Automobile Trading Income segment, which used to be the core business, now accounts for barely over one percent of the top line.

What this estimate hides is the extreme volatility of the new primary revenue source. Bitcoin mining revenue is tied directly to the price of Bitcoin and the global hash rate (the total computing power used for mining), so any investment decision must factor in that macro risk. The company mined 1,404.4 Bitcoins in Q2 2025, but the cost to mine each coin was high, with all-in costs reaching $98,636 USD per Bitcoin. This is a critical metric to watch, as it directly impacts profitability, even with high revenue.

The significant change in revenue streams is the divestiture of the China-based assets, which was completed in May 2025 for US$352 million. This move formally ended the old business model and provided substantial liquidity to fuel the new, global Bitcoin mining operation, which reached a total mining capacity of 50 EH/s by the end of June 2025. This is defintely a high-risk, high-reward play.

• Bitcoin mining is the new, dominant revenue stream.
• Legacy auto-trading is now a negligible segment.
• YoY growth is distorted by the business pivot.
• Revenue is now highly sensitive to crypto market movements.

For a deeper dive into the risks and opportunities surrounding Cango's balance sheet and valuation, you should read the full analysis: Breaking Down Cango Inc. (CANG) Financial Health: Key Insights for Investors.

Profitability Metrics

The profitability picture for Cango Inc. (CANG) in the 2025 fiscal year is defintely complex, primarily due to its aggressive pivot from being an auto-related service provider to a major Bitcoin mining operation. You can't look at the headline numbers without understanding this business transformation.

For the second quarter of 2025, Cango Inc. reported total revenues of $139.8 million. The core profitability ratios show significant losses, but these figures are heavily skewed by strategic, non-cash charges. Here's the quick math on the reported figures:

• Gross Profit Margin: Approximately 16.45%. This is calculated from the reported revenue of $139.8 million and a cost of revenue (excluding depreciation and amortization) of $116.8 million.
• Operating Profit Margin: A loss of roughly -129.04%, stemming from a reported loss from operations of $180.4 million.
• Net Profit Margin: A substantial loss of about -211.30%, driven by a net loss of $295.4 million.

But here's what this estimate hides: The massive net loss is almost entirely attributable to a one-off loss on discontinued operations and a non-cash impairment loss on mining equipment, both tied to the strategic pivot and its timing, not poor day-to-day execution. This is why you must look deeper.

Operational Efficiency and Adjusted Profitability

The true measure of Cango Inc.'s operational efficiency, post-pivot, is its Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This metric strips out the noise of non-cash charges and one-time events like the divestiture of its China-based assets in May 2025.

The underlying strength of the new core business is clear. For Q2 2025, Cango Inc. delivered an Adjusted EBITDA of $99.1 million. This is a remarkable improvement from the prior year and shows the Bitcoin mining segment is generating substantial cash flow. The company is now an asset-light, high-growth digital asset player, which is a completely different risk profile than its legacy business.

Profitability Trends and Industry Comparison

The trend is a dramatic shift in business model. The company reported a full-year 2024 net income of $41.1 million, a significant turnaround from a net loss in 2023, largely due to the initial launch of the Bitcoin mining business. This shows the initial success of the pivot.

Comparing Cango Inc. to its legacy industry-used car transaction services-is now mostly an academic exercise, but it highlights the change. The remaining Automobile trading income was only $1.7 million in Q2 2025, a tiny fraction of the total revenue. For context, the used vehicle dealership industry saw an average gross margin of just 5.4% in Q2 2025. Cango Inc.'s overall gross margin of 16.45% (even with the legacy drag) is much higher, reflecting the high-margin nature of its new Bitcoin mining focus. This is a pure-play mining stock now, not an auto stock.

You need to evaluate Cango Inc. against other Bitcoin miners, not traditional auto dealers. The focus should be on their all-in mining cost of $98,636 per Bitcoin in Q2 2025 and their 50 EH/s mining capacity, which are the real drivers of future profitability.

For a deeper dive into the valuation and strategy, check out the full analysis: Breaking Down Cango Inc. (CANG) Financial Health: Key Insights for Investors

Debt vs. Equity Structure

You need to know how Cango Inc. (CANG) is funding its pivot to Bitcoin mining, and the good news is the balance sheet shows a surprisingly light touch on debt. The company is operating with a moderate level of financial leverage, which is a solid footing for a business undergoing a major strategic shift. This low leverage gives them significant flexibility for future growth or unexpected market shifts.

As of the most recent quarter, Cango Inc.'s total debt stands at approximately $225.19 million. While the exact split between short-term and long-term debt isn't immediately detailed, the overall picture suggests a manageable burden. More importantly, the company's cash position is robust; they actually hold more cash than debt on the balance sheet, which is a strong sign of liquidity. You defintely want to see that in a growth-focused, capital-intensive sector like crypto mining.

The core metric to watch here is the Debt-to-Equity (D/E) ratio, which measures how much debt a company is using to finance its assets relative to the value represented in shareholders' equity (the book value of the company). Cango Inc.'s D/E ratio is a low 0.34. Here's the quick math: for every dollar of shareholder equity, the company is using only 34 cents of debt. For the tech and digital economy sectors, a D/E ratio below 1.0 is generally considered healthy, so 0.34 is quite conservative, suggesting they rely heavily on equity and retained earnings rather than borrowing to fund their operations and expansion.

The company's recent corporate actions underscore this preference for non-dilutive, non-debt financing. When Cango Inc. terminated its American Depositary Receipt (ADR) program in November 2025 and directly listed its Class A ordinary shares on the NYSE, they specifically stated this move did not involve issuing new shares or raising additional capital. This action avoided shareholder dilution and new debt. It's a clean structural change, not a capital raise.

The balance of funding is clearly tilted toward equity, which is a safer, albeit sometimes slower, path to growth. They are not leveraging up their substantial assets to chase expansion. Instead, the company is managing its growth by utilizing its existing capital base, which, for a volatile business like Bitcoin mining, reduces the risk profile. You can see their strategic direction in their Mission Statement, Vision, & Core Values of Cango Inc. (CANG).

Here is a snapshot of Cango Inc.'s key financial position metrics for the 2025 fiscal year:

What this conservative debt profile hides is the need for significant capital expenditure (CapEx) to fuel their hashrate expansion in the Bitcoin mining business, which is a core part of their strategy. If they continue to expand aggressively, they will eventually have to decide between taking on more debt or issuing new equity. For now, the low D/E ratio means they have plenty of room to borrow if they choose to.

• Maintain a D/E ratio of 0.34, signaling low risk.
• Avoided dilution with the recent NYSE direct listing.
• Current Ratio of 1.64 shows strong short-term liquidity.

Liquidity and Solvency

You need to know if Cango Inc. (CANG) has the cash to cover its near-term bills, especially after its massive business shift to Bitcoin mining. The direct takeaway is that while the balance sheet shows strong immediate liquidity, the composition of current assets-reflected in a very low quick ratio-is a critical point for investors to understand after the divestiture of the old auto-finance business.

As of the end of the second quarter of 2025 (June 30, 2025), Cango Inc. reported a cash and cash equivalents balance of US$117.8 million. This liquid reserve is a solid base, but the true picture of short-term financial health comes from the liquidity ratios (current and quick ratios).

Current and Quick Ratios: A Tale of Two Businesses

The current ratio (current assets / current liabilities) stands at approximately 1.64, which is generally considered healthy, meaning Cango Inc. has $1.64 in current assets for every dollar of current liabilities. This suggests a positive working capital (current assets minus current liabilities) position. Here's the quick math: Current Assets are greater than Current Liabilities, which is what you want to see.

But here's the caveat: the quick ratio (or acid-test ratio), which excludes less liquid assets like inventory and certain receivables, is much lower at about 0.26. This stark difference is a direct result of the company's strategic pivot. The high current ratio likely still includes non-cash current assets from the legacy auto-finance business, while the quick ratio highlights that a relatively small portion of current assets is immediately convertible to cash, excluding those less liquid, non-core assets.

• Current Ratio: 1.64 (Healthy overall liquidity)
• Quick Ratio: 0.26 (Low immediate liquidity without selling non-cash assets)
• Working Capital Trend: Positive, but heavily reliant on the successful wind-down of legacy assets.

Cash Flow Statement Overview and Liquidity Strengths

The cash flow statement for Cango Inc. in 2025 is dominated by a major strategic event: the divestiture of its China-based assets in May 2025 for US$352 million. This is a massive, one-time cash inflow classified under Net Cash from Investing Activities that provided a substantial liquidity boost to fund the new Bitcoin mining focus. This is a huge, defintely positive, injection of capital.

The trend in Net Cash from Operating Activities is shifting. While the trailing twelve months (TTM) figure was negative at -US$42.50 million, the new core Bitcoin mining business is showing strong operational cash generation potential, evidenced by an Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of US$99.1 million in Q2 2025. Adjusted EBITDA is a good proxy for the cash-generating power of the new business, as it strips out non-cash charges like the US$256.9 million impairment loss on mining machines recorded in the quarter.

The Net Cash from Financing Activities is less of a concern right now given the large cash balance, but it's where you'd see future debt or equity raises to fund expansion. The company's immediate strength is its cash cushion, which is essential to weather the volatile crypto-mining industry.

The main liquidity strength is the large cash balance and the high-margin potential of the new Bitcoin mining business, which should lead to positive operating cash flow in the future. The risk is the low quick ratio, meaning if the company needed a very large amount of cash immediately, it would have to liquidate non-cash current assets from the legacy business or sell its Bitcoin holdings, which reached over 6,400 BTC as of October 31, 2025. For a deeper dive into the strategic shift, you can read more here: Breaking Down Cango Inc. (CANG) Financial Health: Key Insights for Investors.

Valuation Analysis

You're looking for a clear signal on Cango Inc. (CANG) after its dramatic shift to Bitcoin mining, and the traditional valuation metrics give a mixed, but telling, picture. The direct takeaway is this: Cango Inc. appears undervalued based on its Price-to-Book (P/B) ratio, but the lack of a meaningful Price-to-Earnings (P/E) ratio and the extremely high dividend payout ratio signal significant transition risk.

The company's strategic pivot means you must look beyond simple trailing numbers. For the second quarter of 2025, Cango Inc. reported total revenues of US$139.8 million, with Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) hitting US$99.1 million. That's a strong operational number, but the net loss from discontinued operations and non-cash impairment charges-a one-time cleanup from divesting the old China-based assets for US$352 million-is why the P/E ratio is currently not meaningful (NM).

• P/E Ratio: Not Meaningful (NM) due to a reported net loss in Q2 2025.
• P/B Ratio: 0.25.
• EV/EBITDA (TTM): 13.69.

Here's the quick math on the Price-to-Book (P/B) ratio: at 0.25, the stock is trading at only a quarter of its book value per share. That's a classic sign of being undervalued, but it often reflects market skepticism about asset quality or future profitability, especially during a massive strategic change. The Enterprise Value-to-EBITDA (EV/EBITDA) is around 13.69 (TTM), which is a more reasonable metric to use right now, as it strips out the one-off losses and non-cash charges that distorted the net income. It tells you the market is valuing the core operational business, which is now Bitcoin mining, at a moderate multiple of its cash-flow proxy. You need to focus on this operational strength.

Stock Trend and Analyst View

Looking at the stock price trend over the last 12 months, the market has been punishing the stock, with the price decreasing by -58.27%. The 52-week range runs from a low of $3.01 to a high of $9.66, and the latest close is near the bottom at $3.07. That tells you the risk is priced in, defintely.

Still, Wall Street is split. One analyst maintains a 'Strong Buy' consensus with an aggressive 12-month price target of $8.0. This target suggests a potential upside of over 160% from the current price, banking on the successful execution of the Bitcoin mining strategy and the value of the divested assets. It's an optimistic view, but it highlights the potential opportunity if management executes its Mission Statement, Vision, & Core Values of Cango Inc. (CANG).

The Dividend Reality

Don't be fooled by the dividend numbers. While the projected 12-month dividend yield is high at 7.49%, the reported payout ratio is an unsustainable 1,690.00%. This is a statistical anomaly, likely reflecting a one-time special dividend from 2022 that hasn't been fully purged from the trailing calculations, plus the recent net loss. The company has paid 0 dividends in the last 12 months, and given its capital-intensive Bitcoin mining expansion-reaching 50 EH/s total mining capacity in Q2 2025-it is highly unlikely to pay a significant dividend anytime soon.

Your action is clear: disregard the dividend yield for now. It's a growth story, not an income play. Focus on the low P/B ratio and the analyst's high price target as potential indicators of a deeply discounted asset, but only if you believe the Bitcoin mining pivot will generate consistent future earnings.

Risk Factors

You need to understand that Cango Inc.'s (CANG) financial health is currently defined by its strategic pivot to Bitcoin mining, which introduces a completely different risk profile than its former auto-financing business. The direct takeaway is this: Cango's primary risk is the extreme volatility of the cryptocurrency market, compounded by significant financial distress indicators, even as they scale operations.

Honestly, the company's financial strength is rated as distressed, with an Altman Z-Score of just 0.72, which signals a potential bankruptcy risk within the next two years. This is a serious red flag you can't ignore. Plus, the trailing twelve months' net margin sits at a deeply negative -80.44%. Here's the quick math: nearly all revenue now comes from Bitcoin mining, which accounted for 98.9% of the US$139.8 million in Q2 2025 revenue. So, the company's fate is tied directly to Bitcoin's price swings.

Operational and Financial Headwinds

The Q2 2025 earnings report highlighted some major financial and operational challenges, largely due to one-time events tied to the business transformation. The company reported a net loss of US$295.4 million (RMB2.1 billion) for the quarter. This was mainly driven by two non-cash charges: a non-cash impairment loss of US$256.9 million from mining equipment and a loss from discontinued operations of US$82.6 million related to the divestiture of its China-based assets.

Operational costs are also a persistent threat. The all-in cost to mine one Bitcoin was a high US$98,636 in the second quarter of 2025. If the price of Bitcoin drops, that cost structure immediately challenges profitability, despite the Q2 2025 adjusted EBITDA of US$99.1 million (RMB710.1 million) which attempts to normalize for those one-off losses. You're betting on the price of the coin staying high.

• Market Volatility: Bitcoin price swings directly impact 98.9% of revenue.
• Cost Pressure: All-in mining cost of US$98,636 per Bitcoin is a high-water mark.
• Competitive Risk: Increasing global competition in the Bitcoin mining industry.

Mitigation and Strategic Actions

Cango Inc. is defintely aware of these risks and has clear mitigation strategies, focusing on efficiency and diversification outside of China. They completed the divestiture of their China-based assets for a significant US$352 million by May 2025, giving them ample liquidity for this new direction. This move reduces regulatory exposure to the Chinese market but trades it for crypto-specific regulatory risk in the U.S. and other jurisdictions.

The company is pursuing an aggressive 'Mine and Hold' strategy, accumulating over 6,400 BTC as of October 31, 2025, which acts as a treasury hedge against short-term price dips. Operationally, they are focusing on cost optimization by acquiring low-cost mining sites, like the 50 MW facility in Georgia, USA, which was bought in August 2025 for US$19.5 million. They are also planning to retrofit facilities to support High-Performance Computing (HPC) and Artificial Intelligence (AI) applications, aiming to build a more dynamic, energy-focused business model that goes beyond just mining. That's a smart way to diversify their infrastructure use.

To understand the players behind these decisions, you should read Exploring Cango Inc. (CANG) Investor Profile: Who's Buying and Why?

Growth Opportunities

The future growth for Cango Inc. (CANG) hinges almost entirely on its aggressive pivot from auto services to becoming a global Bitcoin mining powerhouse. You need to look past the Q2 2025 net loss of RMB 2.1 billion-which was largely an accounting event from discontinued operations-and focus on the operational scale they've built. This is a new company, defintely. The core growth driver is a massive, rapid scaling of their mining capacity.

By July 2025, Cango Inc. had fully deployed a 50 Exahash per second (EH/s) global platform, representing about 6% of the entire global Bitcoin network hash rate. That's a serious footprint. This scale, combined with a strategic 'Mine and Hold' approach-meaning they are accumulating over 6,400 BTC as of October 31, 2025, rather than selling immediately-positions them as a digital asset treasury play. Plus, their geographic diversification across North America, the Middle East, South America, and East Africa helps mitigate single-region regulatory or energy risks.

The market is clearly expecting significant top-line expansion, though profitability remains a near-term question. Analysts project Cango Inc.'s revenue to grow by 39% per annum, with an Earnings Per Share (EPS) growth of 48.9% per annum. Here's the quick math on the full-year picture: Apollo Insights, for instance, increased its full-year 2025 revenue estimate to RMB 5,173 million back in May, though consensus estimates are closer to $621.08 million for the fiscal year 2025. The consensus EPS estimate for fiscal year 2025 is still negative at -$2.06, reflecting the high costs of this massive transition. You can dive deeper into who's backing this strategy by Exploring Cango Inc. (CANG) Investor Profile: Who's Buying and Why?

Strategic Roadmap and Competitive Edge

Cango Inc.'s strategic initiatives map directly to cost reduction and future-proofing the business. Their acquisition of a 50-megawatt (MW) mining facility in Georgia, U.S., for US$19.5 million in August 2025 is a concrete step to lower power costs and enhance operational stability in a key market. This is a shift toward owning more of the infrastructure, which is smart.

Beyond Bitcoin mining, the company is actively exploring the high-margin world of AI high-performance computing (HPC), which is a natural extension for a company that controls significant power and computing infrastructure. They are also focusing on using renewable energy projects, which will be critical for long-term cost control and environmental, social, and governance (ESG) compliance.

Their competitive advantages boil down to three things:

• Scale and Efficiency: A deployed hashrate of 50 EH/s gives them leverage in hardware and energy negotiations.
• Geographical Diversification: Operations span multiple continents, reducing single-point risk.
• Technology Focus: An average fleet energy efficiency of about 21.6 J/TH (Joules per Terahash) is competitive, especially with a large fleet of modern, water-cooled models.

What this estimate hides is the inherent volatility of Bitcoin's price, which directly impacts their revenue and the value of their treasury holdings. Still, the operational metrics show they are executing on their plan.

Next step: Operations: continue to track average operating hashrate efficiency and power consumption costs monthly to validate the competitive advantage.