Cango Inc (NYSE: CANG) has released the unaudited results of its financial statement for the first quarter of 2026, and it reported 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 has wiped out its balance-sheet debt in a single quarter while simultaneously supercharging its entry into the artificial intelligence compute market.
Why is Cango’s $261 million loss not a problem?
$151.8 million out of the total net loss came from changes in the fair value of bitcoin collateral receivables, a non-cash accounting charge driven by falling bitcoin prices, while a further $49 million reflects impairment losses on mining machines, also triggered by the same price decline.
Together, these two items account for more than three-quarters of the reported loss.
Bitcoin fell by 22.6% over the first quarter of 2026, and this was driven by delays in key crypto legislation, macroeconomic unease, and uncertainty over Federal Reserve leadership, among other factors.
Miner revenue 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 is $0.034 for 1 TH/s of hashing power per day, according to The Block data.
Public miners are also letting go of their Bitcoins in droves to fund pivots towards AI infrastructure, having collectively sold a record 32,000 $BTC during the quarter.
Cango recorded $102.0 million in total revenue, with $98.4 million coming from bitcoin mining. The company mined 1,266 bitcoin over the quarter at a total operational hashrate of 37.01 EH/s, comprising 27.98 EH/s of self-mining and 9.02 EH/s of leased hashrate.
Cost of revenue fell from $155.3 million in the prior quarter to $99.6 million, driven by lower electricity and hosting costs after the deliberate reduction in hashrate that accompanied the phase-out of older S19 series machines.
How much does the debt reduction actually change Cango’s strategic position?
Away from its headline loss, Cango reduced its long-term debt from $557.6 million to $30.6 million, a 94.5% reduction, by offloading roughly 4,451 $BTC, approximately 60% of its holdings at the time, to repay related-party debt.
The company ended the quarter holding 1,026 bitcoin in reserve alongside $7.2 million in cash, down from $41.2 million at year-end 2025.
According to Cango’s April 2026 operational update, the company’s average cash cost per bitcoin declined further to $68,061 in April from $76,928 in Q1, a 9% sequential reduction that management attributes to fleet optimization and the ongoing transition from legacy S19 hardware to more efficient S21 series miners. Cango’s Bitcoin reserves rose to 1,057 $BTC by the end of April. At 31.58 EH/s, the total operational hashrate was lower than Q1 as the fleet transition continued, but the margin profile improved.
Chief Financial Officer Simon Tang stated, “Despite a challenging quarter affected by industry adjustments and non-cash impacts, we made meaningful progress in improving our cost structure and strengthening our balance sheet. We reduced long-term debt and achieved continued declines in mining cash costs through disciplined execution.”
How far along is Cango’s AI pivot?
During the first quarter, Cango launched EcoHash that built around modular, containerized GPU compute units targeting the AI inference and high-performance computing market.
According to Cango, pilot deployments are underway, with the roadmap beginning at GPU leasing and scaling, the company says, toward a global AI compute network. In April, the launch was followed by the completion of a $65 million strategic investment and a $10 million convertible note, indicating external capital is being lined up to fund the expansion.
Cango’s CEO, Paul Yu, stated, “By leveraging our global energy network and operational expertise, we are well-positioned to enhance efficiency, capture emerging AI compute opportunities, and drive sustainable long-term value.”
While the debt is gone, the work continues for Cango. The company recorded an adjusted EBITDA loss of $154.1 million, which, when compared with the $1.7 million loss it recorded in the same period of 2025, highlights the grounds the business needs to recover.
