Q4 2024 Canaan Inc Earnings Call
Okay.
Operator: Ladies and gentlemen, thank you for standing by and welcome to the Canaan Inc's fourth quarter and full year of 2024 earnings conference call. At this time, all participants are in a listen only mode.
Ladies and gentlemen, thank you for standing by and welcome to the China, Inc. Fourth quarter and full year of 2024 earnings conference call at.
At this time all participants are in addition to only marriage after the management's perpetual mark. So it will have a question and answer session. Please note that this event is being recorded.
Operator: After the management's prepared remarks, we will have a question and answer session. Please note that this event is being recorded.
Gwyn Lauber: Now I'd like to hand the conference over to your speaker host today, Ms. Gwyn Lauber, Investor Relations Director of the company. Please go ahead, Gwyn. Thank you, operator.
Speaker Change: Now I'd like to hand, the conference I bet, you'll speak a host today Ms Gwyn Lauber Investor Relations director of the company. Please go ahead Glen.
Gwyn Lauber: Thank you operator, Hello, everyone and welcome to our earnings Conference call.
Gwyn Lauber: Hello, everyone, and welcome to our earnings conference call.
Gwyn Lauber: Joining us today are our Chairman and CEO, Nangeng Zhang, and our CFO, Jin James Cheng.
Speaker Change: Joining us today are chairman and CEO, Nanking gang, and our CFO, Jim James Jang.
Gwyn Lauber: Leo Wang, Vice President of Capital Markets and Corporate Development, and Xi Jiang, Senior IR Manager, will also be available during the question and answer session. Our CEO will start the call by providing an overview of the company and performance highlights for the quarter. Our CFO will then provide details on the company's operating and financial results for the period before we open up the call for your questions.
Leo Wang Vice President of capital markets, and corporate development and she Jang senior IR manager.
Speaker Change: They'll be available during the question and answer session.
Speaker Change: Our CEO will start the call by providing an overview of the company and performance highlights for the quarter.
Speaker Change: Our CFO will then provide details on the company's operating and financial results for the period.
Speaker Change: While we open up the call for your questions.
Gwyn Lauber: Before I begin, I would like to refer you to our Safe Harbor Statement in our earnings press release. Today's call will include forward-looking statements. These statements include, but are not limited to, our outlook for the company and statements that estimate or project future operating results or the performance of the company. These statements speak only as of today, and the company assumes no obligation to revise any forward-looking statements that may be made in today's press release, call, or webcast, except as required by law. These statements do not guarantee future performance and are subject to risk, uncertainties, and assumptions.
Speaker Change: Before I begin I would like to refer you to our safe Harbor statement in our earnings press release.
Speaker Change: Today's call will include forward looking statements. These statements include but are not limited to our outlook for the company and statements that estimate or project future operating results or the performance of the company.
Speaker Change: These statements speak only as of today and the company assumes no obligation to revise any forward looking statements that maybe made in todays press release call or webcast.
Speaker Change: Sept as required by law.
Speaker Change: These statements do not guarantee future performance and are subject to risks uncertainties and assumptions. Please.
Gwyn Lauber: Please refer to the press release and the risk factors and documents we file with the Securities and Exchange Commission, including our most recent annual report on Form 20-F for information on risks, uncertainties, and assumptions that may cause actual results to differ materially from those set forth in such statements.
Speaker Change: Please refer to the press release and the risk factors and documents, we file with the Securities and Exchange Commission, including our most recent annual report on form 20-F for information on risks uncertainties and assumptions that may cause actual results to differ materially from those set forth in such.
Speaker Change: Statements.
Gwyn Lauber: In addition, during today's call and webcast, we will discuss both GAAP financial measures and certain non-GAAP financial measures which we believe are useful as supplemental measures of the company's performance. These non-GAP measures should be considered in addition to, and not as a substitute for, or in isolation from, GAP results. You can find additional disclosures regarding these non-GAAP financial measures, including reconciliations with comparable GAAP results in our earnings press release, which is posted on the company's website.
Speaker Change: In addition, during today's call and webcast, we will discuss both GAAP financial measures and certain non-GAAP financial measures, which we believe are useful as supplemental measures of the company's performance fees.
Speaker Change: These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results.
Speaker Change: You can find additional disclosures regarding these non-GAAP financial measures, including reconciliations with comparable GAAP results in our earnings press release, which is posted on the company's website.
Nangeng Zhang: With that, I will now turn the call over to our Chairman and CEO, Nangeng Zhang. Please go ahead. Hello, everyone. This is NG, CEO of Canaan. Thank you for joining our call. James, our CFO, and I are pleased to speak with you from our headquarters in Singapore and share our updates for the fourth quarter and the recent developments. In the fourth quarter of 2024, the trends of Bitcoin price and total network hashrate was relatively favorable for miners. Bitcoin price steadily rose from US$61,000 at the beginning of the quarter to US$93,000 at the end of the quarter.
Speaker Change: With that I will now turn the call over to our chairman and CEO Nanking Chang. Please.
Speaker Change: Please go ahead.
Nanking Chang: Hello, everyone.
Speaker Change: Synergy CEO of Kenya.
Speaker Change: You for joining our call James <unk>, our CFO and I are please.
Speaker Change: To speak with you from our headquarters in Singapore, and the sharing updates for the fourth quarter and recent developments.
Speaker Change: In the first quarter of 2020 for the trends.
Speaker Change: Between price and total network hash rate was.
Speaker Change: Our activity.
Speaker Change: Go for miners.
Speaker Change: Pete corn price.
Speaker Change: <unk> from.
Speaker Change: 61 stores in the U S. At the beginning of the quarter to 93 southern into U S dollars at the end.
Nangeng Zhang: The total network hash rate also increased from 622x hash per second to 842x hash per second. That said, in Q4, Bitcoin price grew faster than the hash rate. This is a typical electricity cost of $0.06 per kilowatt hour. Miners using our A50 machines saw their growth margin rise from about 40% at the start of the quarter to as high as 60% by the end. This created a more profitable environment for mining and boosted miners' confidence. We fully leverage this positive market trend and push sales and the delivery of mining machines and to grow the energized hatchets for our mining operations We achieved approximately 89,000 signatures.
Speaker Change: The total network hash rate also increased from 622 extra cash per second to 800.
Speaker Change: 42 eggs hash per second.
Speaker Change: That said in Q4.
Speaker Change: Price grew faster than they have right.
Speaker Change: As you know a typical.
Speaker Change: Electricity cost.
Speaker Change: Six.
Speaker Change: 65 cents per kilowatt hour monitors are using our <unk> machines, so their gross margin.
Rice from about 40% at the start of the quarter to as high as 60% by the end of this.
Speaker Change: Great Apes more.
Speaker Change: Export environment for mining and postpaid.
Speaker Change: Mine there is confidence.
Speaker Change: We fully leverage this positive market trend and push sales and the delivery of mining machines central grow the energized.
Speaker Change: That's great for our mining operations.
Speaker Change: We achieved approximately today.
Speaker Change: 89.
Nangeng Zhang: The meeting US dollars in total revenues this quarter, well above our guidance of 80 million US dollars. For the full year, we achieved almost $270 million in revenue, up 27.4% year-over-year. For mining machine cells, we focused on new product results. The high-performance A15 series officially entered mass product delivery in Q4. We sold 9.1 million terahashes per second of computing power, up 66% year-over-year, and up 24.7% quarter-over-quarter. reaching a record high in our company's history. This contributed US$73 million to mining machine revenue, up 64% year-over-year, and making a two-year quarterly high. In this quarter, we fulfilled large orders from North American public mining companies like Cypher, CleanSpark, and Hive, and received strong positive feedback.
Speaker Change: Yes.
Speaker Change: In total revenues this quarter well above our guidance.
Speaker Change: Maybe in the U S centers.
Speaker Change: For the full year, we achieved almost 270.
Speaker Change: Mainly in U S dollars in revenue.
Speaker Change: Up 27, 4% year over year.
Speaker Change: Sure.
For mining machine itself.
Speaker Change: Forecast new product for yourselves.
Speaker Change: The high performance <unk> serious officially entered mass product delivery in Q4.
Speaker Change: So.
Speaker Change: Nine 1 million Tallahatchie, Tara <unk> per second of computing power.
Speaker Change: 66% year over year.
Speaker Change: And up 24, 7% quarter over quarter.
Speaker Change: Reaching a record high.
Speaker Change: In our Companys history.
Speaker Change: This.
Speaker Change: Contributed 73.
Meaning that you asked us to.
Speaker Change: Mining machinery revenue up 64% year over year in the making.
Speaker Change: Two year quarterly high.
Speaker Change: In this quarter, we fulfilled notch odorous from North American public mining companies like cipher transport and hive.
Speaker Change: <unk> received strong positive feedback.
Nangeng Zhang: for the full year of 2024. North America became our largest regional market, accounting for approximately 40% of mining machine sales, showing the success of our expansion in the region during the past years. The rising Bitcoin price also helped us clear previous generation's inventory. In Q4, the previous generation products remained popular in regions with energy advantages like Southeast Asia and Africa. To date, sellable inventory of traditional models like A16 and A14 has been mostly cleared and A15 has become our main product. This completes the upgrade of our inventory portfolio. Our first consumer product, the NanoStream Mining Heater, continues to be welcomed by individual users around the world.
Speaker Change: For the full year of 2024.
Speaker Change: No North America became our largest.
Speaker Change: Regional market accounting for approximately 40% of mining machines house.
Speaker Change: The success of our expansion in the region during the past years.
Speaker Change: The REIT A&P comprise also half half clear.
Speaker Change: Generations inventory in Q4.
Speaker Change: Period.
Speaker Change: Generation products remained popular you'd regions suites energy advantages like southeast Asia.
Speaker Change: And Africa.
Speaker Change: To date.
Speaker Change: Inventory.
Traditional models like.
Speaker Change: <unk>.
Speaker Change: As Jim also be cleared.
<unk> has.
Speaker Change: Our main product.
Speaker Change: Yes.
Speaker Change: <unk> the upgrade of our inventory portfolio.
Speaker Change: Our first concern.
Speaker Change: Few more product to nano streamlining heater.
Speaker Change: It should be welcome by individual users around the world.
Nangeng Zhang: By year-end, consumers from 80 countries around the global have ordered our products through our online shop. Since their launch, we received a total of 24,000 Nano orders. with more than 50% coming from customers in Europe and North America. This also helps increase our brand recognition in this region. In 2025, we launched several new Avalon Home products, including the Nano 3S, Avalon Mini 3, and Avalon Cube. These new products are available on our website for pre-order with small batches being delivered in Q1. As of now, total orders for these new consumer-grade products have reached 12,000 units, with total amount of over 5 million US dollars.
Speaker Change: By year end.
Speaker Change: Numerous from 88 countries around the global.
Speaker Change: Although our products through our online shop since their launch we received a total of 24000 than others.
Speaker Change: I wish more than 50% coming from.
Speaker Change: Customers in Europe, Europe, and North America.
Speaker Change: This also helped increase our brand recognition in this route days.
Speaker Change: In 2025.
Speaker Change: Several new Avalanche.
Speaker Change: Avalon home products, including the nursery as Avalon Ministry and I would argue.
Speaker Change: These new products are available.
Speaker Change: Our website for preorder at small batches being TD already in Q1.
Speaker Change: As of now total orders for these new consumer grade products have reached.
Speaker Change: Our first album units, we as total amounts.
Speaker Change: <unk> 5 million in U S dollars.
Nangeng Zhang: Some of these orders also come from distributor clients who have now established cooperation with us. Considering that the northern hemisphere will soon enter summer and indoor heating demand will gradually decline, this level of pre-sale performance has greatly exceeded our expectations. It also shows that many individual customers are eager to try and participate in Bitcoin mining. Our mining business also delivered a strong performance this quarter. We mined 186 bitcoins. 84% year over year. With higher online hash rates and stronger Bitcoin prices, our mining revenue reached $15.3 million, up 313% year over year. We continued to take advantage of low electricity costs in Africa and expanded local mining capacity.
Speaker Change: Some of these others also come from.
Speaker Change: Distributor clients.
Speaker Change: We have now established a corporation with us.
Speaker Change: Considering that northern Hemisphere, we'll sure Andrew summer and indoor heating demand.
Speaker Change: Gradually decline this level of priest, our performance has greatly exceeded our expectations.
Speaker Change: It also shows that many individuals.
Speaker Change: Customers are eager to try and participate.
Speaker Change: In bitcoin mining.
Speaker Change: Our mining business also delivered a strong.
Speaker Change: <unk> this quarter.
Speaker Change: 186 three points.
Speaker Change: 84% year over year.
Speaker Change: These higher online cost rates and a stronger it comprises I'll remind you revenue reached.
Speaker Change: <unk> 15.3 million U S dollars.
Speaker Change: 313% year over year.
Speaker Change: <unk> to take advantages of low electricity costs in Africa, and expanded local mining capacity.
Nangeng Zhang: By the end of 2024, our total installed mining hash rate reached 5.4x hash per second with 4.8x hash per second energized. Our average all-in power cost remained at 4 U.S. cents per kilowatt-hour. With Bitcoin price trending up in Q4, our mining growth margin increased to 42%, much higher than the 22% in Q3. Our efficient mining operations also help grow our Bitcoin holdings. By the end of 2024, our owned Bitcoins on balance sheet reached 1,293, a new high. The rising price of Bitcoin at quarter end also resulted in fair value gain to this asset. This gain shows the preliminary benefits of our mining operations as a long-term strategy and our decision to hold Bitcoin.
Speaker Change: By the end of territory for our total installed.
Speaker Change: Miami Hatch rate reached five point Forex hedge for a second.
Speaker Change: Yes.
Speaker Change: <unk> eight <unk> per second energized.
Speaker Change: Average OEM power cost remained at four <unk>.
Speaker Change: <unk>.
Speaker Change: You're asking about our.
Speaker Change: This fiscal year with Piedmont price trending up in Q4.
Speaker Change: Our mining gross margin increased to 42% much higher than 22% in Q3.
Speaker Change: Our efficient mining operations also helped grow our disquiet holdings by the end of 2008, it before our owned bead clients about a balance sheet.
Speaker Change: Reached whilst salt into 193.
Speaker Change: A new high.
Speaker Change: The rising price.
Speaker Change: At quarter at quarter end also resulted in furrow radio came to this asset.
Speaker Change: This gain shows.
Speaker Change: Preliminary benefits of our mining operations.
Speaker Change: A long term strategy and our decision to hold with volumes.
Nangeng Zhang: At our mining business expense, we provide additional information to the capital market at the standard with the other public miners. Starting in January 2025, we began releasing monthly mining updates. By the end of February 2025, we announced that we had 7 active joint mining projects worldwide with 6.28x hash installed and 5.73x hash energized. Our own Bitcoin holdings had reached 1,355 by the end of February. As we previously announced, since Q1 2025, we have expanded to North American mining projects. through upgraded partnerships. We are moving towards our mid-2025 goal of reaching 10x hash per second deployed in North America and 15x hash per second globally.
Speaker Change: Our mining business experience, we provide additional information to the capital markets.
Speaker Change: Rps standards.
Speaker Change: Republic miners.
Speaker Change: Starting in January 2025, we began.
Speaker Change: Good evening, Mark III mining updates.
Speaker Change: And our February 2025.
Speaker Change: Most of that we had seven active trying to mining project projects worldwide.
Speaker Change: Six points to eight X hash installed and the five partners seven eight III extra hash energized.
Speaker Change: Our own <unk>.
Speaker Change: Quite a holdings had reached a wife's all those 365 by the end of February.
Speaker Change: As we are.
Speaker Change: <unk> previously.
Speaker Change: <unk> previously announced.
Speaker Change: Q1, 2025, we have expanded to north American mining projects.
Speaker Change: Through upgraded partnerships.
Speaker Change: We are moving.
Speaker Change: Towards our mid 20 tariff our goal of reaching 10 net cash.
Speaker Change: <unk> deployed in North America, and 15 next has protected globally.
Nangeng Zhang: We expect our mining business to achieve a new high in revenue in the first quarter of 2025.
Speaker Change: We expect our mining business to achieve a new high yield revenue in the first quarter of 2025.
Nangeng Zhang: Today, we are also pleased to announce that we recently signed a new cooperation agreement with two partners to expand mining capacity sites in Pennsylvania and Texas. Once these two projects gradually go online in Q2 2025, we expect to increase our operated hash rate in North America to approximately 4.7 ETH per second. We have already built a strong and experienced operations and business development team in North America. and they are actively in discussions with several potential partners for joint mining. Based on our current observations, the cryptocurrency site resources in North America market still show strong potential, which is in line with our earlier strategic assessment.
Speaker Change: Today, we are also pleased to announce that we recently signed new.
Speaker Change: Cooperation agreements with two partners.
Speaker Change: <unk> Chan mining capacity.
Speaker Change: In Pennsylvania and Texas.
Speaker Change: Once these two products gradually go online in Q2 2025.
Speaker Change: We expect to increase our operated hatch rate in North America to approximately 4.7 hedge for a second we have already built a strong and.
Speaker Change: Experienced operations and our business development team in North America.
Speaker Change: Jr activity in discussions with several potential partners for our product money.
Speaker Change: Based on our current observations.
Speaker Change: Quipped currencies site the southeast.
Speaker Change: In North America.
Speaker Change: The market is still show a strong potential.
Speaker Change: Which is in line with our earlier stress Tek assessments.
Nangeng Zhang: The expansion of joint mining and hosted mining in North America has been progressing very smoothly. As a manufacturer with minor research and development capabilities, we are increasingly welcomed by mining site owners for joint mining ventures. The new U.S. administration is expected to ease regulations, provide more energy resources to the industry, and support Bitcoin mining at both the federal and state levels. Recently, our key competitors' critical affiliate company has been added to U.S. entities list. We believe we will benefit from the growing tension and rising costs in the mining hardware supply chain. And that many mining site owners will increasingly view Canaan as a preferred partner.
Speaker Change: The expansion of truck mining and <unk>.
Speaker Change: Postpaid mining in North America has been progressing very smoothly.
Speaker Change: As a manufacturer is minor research and development.
Speaker Change: Capabilities.
Speaker Change: Increasingly will come by monocytes onerous for my New ventures.
Speaker Change: The new U S.
Speaker Change: At the Ministration is expected to east regulations provide more energy resources to the industry and the spot with quite mining at both federal and state levels recently, our key competitors are critical.
Speaker Change: Each company has been added to U S entities list.
Speaker Change: We believe we will benefit from the growing tension and the rising cost.
Speaker Change: In mining hardware supply chain and the Jackson main mining.
Speaker Change: Many mining site owners will increasingly view <unk> as a preferred partner we also hoped.
Nangeng Zhang: We also hope to reinvest most of the funds raised in U.S. capital markets back to local projects and gradually build ourselves into a company with a strong mining footprint in the United States. Both our mining machine cells and mining operations rely on continuous R&D efforts. In the fourth quarter, we successfully wrapped up mass production of A15 series. Working closely with our foundry partners, we carried out ongoing process improvements to boost product performance and the yield rate. Looking ahead, we expect to deliver more computing power using the same number of wafers, including more high-end A15 Pro models.
Speaker Change: Reinvest.
After the follow ups right in U S capital markets back to local projects.
Speaker Change: And gradually build ourselves into a company with a strong mining footprint in U S States and the United States.
Speaker Change: Sure.
Speaker Change: Both our mining machine sales and the mining operations, where they are.
Speaker Change: <unk> R&D efforts.
Speaker Change: In the fourth quarter, we successfully reps up mass production.
Speaker Change: <unk> series.
Speaker Change: Working closely with our foundry partners, we carried out ongoing process improvements to boost.
Speaker Change: Product performance and the euro rate looking.
Speaker Change: Looking ahead, we expect two <unk> more computing power using the same number of wafers.
Speaker Change: Including more high end <unk> portal models.
Nangeng Zhang: In addition to our standard air-cooled miners, we continue to provide customized mining solutions based on clients' specific needs. and their site conditions. For example, in a previous collaboration with Public Miner Clean Spark, we delivered 3,800 units of our A1566i emerging-cooled miners. These machines ran stably on-site, performed beyond the contract specifications, and received very positive feedback from the client. In 2024, although mining chips were generally not subject to U.S. export control restrictions at the time, we continued to proactively manage our supply chain to prepare for potential regulatory changes in the future. In January 2025, the U.S.
Speaker Change: In addition to our standard error minors.
Speaker Change: We continue to provide customized mining solutions based our clients specific needs.
Speaker Change: There can.
Conditions.
Speaker Change: For example.
Speaker Change: Previous collaboration with public manifest spot.
Speaker Change: We delivered a result 800 units of our a 15 66 I emerging crude minus these machines to run stably on site.
Speaker Change: Performed beyond the contract structures and received very positive feedback from the client.
Speaker Change: In 2024.
Speaker Change: Although mining chips or generate launch.
Speaker Change: Subject to U S export control restrictions.
Speaker Change: At the time.
Speaker Change: We continue to proactively manage our supply chain to prepare for potential regulatory changes in the future in January 20th century fire.
Nangeng Zhang: BIS issued new rules that suddenly imposed additional constraints on the global semiconductor supply chain. Off-source assembly and testing vendors were now effectively limited to those on an approved white list, drastically narrowing available options overnight. Thanks to our early planning, we were able to swiftly transition a 15-chip packaging to OSAT partners within the whitelist, minimizing delays in the manufacturing process caused by the new regulations. Subsequently, through continued collaboration with our foundry partners to support license applications. We were informed this month that all our in-production wafers have received the necessary license to be released even to the OSAS without approved WATLIST status.
Speaker Change: <unk> issued new rules that suddenly imposed additional constraints on the global semiconductor supply chain.
Speaker Change: Outsource assembly and testing vendors.
Speaker Change: We're now effectively if activity is limited to those on and approvals whitelist.
Speaker Change: Drastically narrowing available operates <unk> overnight.
Speaker Change: Thanks to our early planning, we were able to swiftly transition a 15th chip packaging to OCI partners with <unk>.
Speaker Change: What it is.
Speaker Change: Minimizing delays in the manufacturing process caused by the new regulations.
Speaker Change: Subsequent to date.
Speaker Change: <unk> continued collaboration with our foundry partners to spotlight.
Speaker Change: Applications.
Speaker Change: We were informed that this months that all our in production wafers.
Speaker Change: I received the necessary licenses to be released reduced even to the old SaaS without.
Speaker Change: Approved what is the status.
Nangeng Zhang: As a result, our choices of OSOT is largely no longer restricted. This put us in a strong position to scale up production and reduce costs more quickly in response to rising market demand. It is the result of our long-standing commitment to compliance. We will continue to work to anticipate and mitigate the potential impacts of future policy changes. Additionally, we have completed R&D on our next generation A16 mining machines and finished the tape-out process. Once again, we are pushing the limits of manufacturing technology due to the advanced ship design of our products. The production is very complex and time consuming.
Speaker Change: As a result, our choices of all SaaS is largely no longer restricted.
Speaker Change: This put us in a strong position to scale up our production and reduce costs.
Speaker Change: More quickly in response to rising market demand.
Speaker Change: It is the result of our long standing commitment to compliance.
Speaker Change: We will continue to working to anticipate and mitigate.
Speaker Change: The potential impacts of future policy changes.
Speaker Change: Additionally, we have completed to R&D, our next generation <unk> hundred 16 mining machines.
Speaker Change: And the finished the tape out process.
Speaker Change: Once again, we are pushing the limits of manufacturing technology.
Speaker Change: Due to the advanced shift is done of our products. The production complex is very complex and time consuming.
Nangeng Zhang: But we continue to work closely with our foundry partners to bring the ultra-performance product to customers as soon as possible. The standard IR-cooled A16 is expected to reach nearly 300 terahertz per second. As usual, we will release new products and send simple machines to customers after we finish the full system testing and obtain real-world data.
Speaker Change: But we continue to work closely with our foundry partners to bring the ultra performance product.
Speaker Change: Two customers as soon as possible.
Speaker Change: The standard <unk> 16.
Speaker Change: Expected to reach nearly 300 Tetrahydric second.
Speaker Change: As you know, we released new products to understand.
Speaker Change: Simple machines to customers. After we finished our full system testing and obtained.
Speaker Change: Real World data.
Nangeng Zhang: In our consumer production product line, during the first quarter of 2025, we successfully launched several new additions to the Avalon home series. This includes the upgraded Nano 3S desktop mining heater, Avalon Mini 3, a quiet home heater with integrated mining capabilities, and Avalon Q, our first low noise. home mining device that supports 110 volts and is compatible with major global voltage standards. Through this portable, silent, aesthetically designed, and functionally home-oriented consumer product, we aim to make Bitcoin mining more accessible to everyday users and in the future promote the concept of decentralization. We invite everyone to visit our official website to learn more about this product.
Speaker Change: In our consumer production product line during the first quarter of 2025.
Speaker Change: We successfully launched several new additions.
Speaker Change: I've got a whole series. This include upgraded nursery as tax.
Speaker Change: Top mining heater.
Speaker Change: Our own Ministry.
Speaker Change: Quite home <unk> integrated mining capabilities.
Speaker Change: Our Q, our first low noise.
Speaker Change: Home monitoring device, a device that plus 110 votes.
Speaker Change: <unk>.
Speaker Change: Compatible with major global voltage standards.
Speaker Change: Through this protocol silent.
Speaker Change: Secondly, designed and functionally home our retained cash.
Speaker Change: Zoom or products, we aim to make bitcoin mining more accessible to everyday use users and future promote cost after the Saturday day ship, we invite everyone to visit our official website.
To learn more about.
Speaker Change: These products.
Nangeng Zhang: On the operation side, we achieved significant positive changes in the fourth quarter, thanks to the large-scale delivery of our A15 products, strong growth in mining revenue, and continued cost optimization. Our growth loss narrowed sharply by 70.5% quarter over quarter to 6.4 U.S. dollars. At the same time, after excluding non-cash adjustments, such as fair value changes and their prudent accounting treatment, we turned profitable at the EBITDA level in Q4, which achieved an adjusted EBITDA gain of $19.3 million. This marks our first EBITDA profitability since the mining machines market downturn began two years ago. Looking into 2025, we will continue to push forward with the sale and mass delivery of our A15 series products.
Speaker Change: On the operation side.
Speaker Change: We achieved significant positive changes in the fourth quarter.
Speaker Change: Thanks to the large scale to delivery of our <unk> products strong growth in mining revenue and continued.
Speaker Change: Cost optimization.
Speaker Change: Our gross loss narrowed sharply by 75% of our quarter to $6 4 million in U S dollars.
Speaker Change: At the same time after excluding noncash.
Speaker Change: Adjustments such as fair value changes in there.
Speaker Change: Prudent accounting treatment, we turned profitable at the EBITDA level in Q4, which you achieved an adjusted EBITDA gain.
Speaker Change: Non team point 3 million U S dollars.
Speaker Change: This marks our first EBITDA profitability.
Speaker Change: Since mining machines market downturn began two years ago.
Speaker Change: Looking to 2025, we will continue to push forward with the sale and domestic delivery of our <unk> series products.
Nangeng Zhang: Thanks to their strong performance, the test bench of A15 products received high recognition from customers, and orders have been coming in actively. Our delivery schedule is now booked into May and June for this year. Our key focus now is to work closely with our foundry partners to ramp up production capacity and steadily increase our delivery volume. We also aim to future improve computing power and yield rate through process optimization, which will enhance profitability, product competitiveness, and customer satisfaction. In addition, we are actively balancing the allocation of money machines between customer orders and our money operations based on real-time market dynamics to achieve better synergy between the two business segments.
Speaker Change: Due to their strong performance.
Speaker Change: The test bench of 15 products received a high.
Speaker Change: Recognition from customers and others have been coming in.
Speaker Change: Kimberly.
Speaker Change: Our TV reschedule is now booked into May and June for this year.
Speaker Change: Our key focus now is to work closely with our foundry partners to ramp up production capacity and steadily increased our <unk> with.
Speaker Change: We also aim to future improved computing power on the yield rate through process optimization.
Speaker Change: Which will enhance our probability product.
Speaker Change: Hum and competitiveness and customer satisfaction.
Speaker Change: In addition, we are actively balancing the allocation of mining machines between customer orders in our mining operations based on real time market demand dynamics, we to achieve better.
Speaker Change: Synergy between the two business segments.
Nangeng Zhang: The first quarter is traditionally a slow season, we completed the first phase of our supply chain compliance adjustment, mostly during the Lunar New Year holiday. So the impact on the chip production cycle was kept within a limited range. However, starting in February, major changes in the global political and economic environment have caused significant Bitcoin price volatility. This has negatively affected market assessment, future expectations, and especially financing activities across the market. Given these combined factors, we are maintaining a very cautious outlook for the first quarter of 2025. We expect Q1 revenue to be approximately $75 million.
Speaker Change: The first quarter.
Speaker Change: Traditionally a slow season.
Speaker Change: Completed the first phase of <unk>.
Speaker Change: Our supply chain.
Speaker Change: This adjustment.
Speaker Change: Most of the deal.
Speaker Change: Lunar new year holiday.
Speaker Change: So the impact on the chip production cycle was capita with limited rich.
Speaker Change: However, starting in February major changes in the global political and economic environment have caused significant bid claim price.
Speaker Change: Sure.
Speaker Change: This had an activity affected market assessment future.
Speaker Change: Patients and specialty financing activities across the markets.
Speaker Change: Given these combined factors we are.
Speaker Change: Maintaining a very cautious outlook for the first quarter of 2025.
Speaker Change: We expected Q1 revenue to be approximately 75 million U S dollars.
Nangeng Zhang: We expected that in Q2, the production capacity ramps up and our mining project deployment moves towards completion. Our performance will see a big improvement compared to Q1. We currently estimate total revenue for Q2 of 2025 to be in the range of $120 million to $150 million. We are maintaining our previously issued full year 2025 guidance. This total annual revenue is expected to be in the range of $900 million to $1.1 billion. This outlook is based on the company's current market and operational conditions. However, given the recent market volatility and uncertainty about how long it may continue, actual results may differ.
Speaker Change: We expected that in Q2, the production capacity ramps up and our mining project deployments more towards.
Speaker Change: Our commission our performance, we will see a big improvement compared to Q1.
Speaker Change: Currently estimate total revenue for Q2 of 2021 2025 to be in the range.
Speaker Change: $120 million to 150 million U S dollar.
Speaker Change: Yes.
Speaker Change: We are maintaining our premise day issue of the full year 2025 guidance with total.
Speaker Change: Daniel.
Speaker Change: Revenue expected to be in the range.
Speaker Change: $900 million to $1 1 billion U S dollars.
Speaker Change: This.
Speaker Change: Outlook is based on the company's current market and operational conditions.
Speaker Change: However, given.
Speaker Change: Recent market volatility and uncertainty.
Speaker Change: About how long it may continue actual results may differ.
Nangeng Zhang: From Beijing to Singapore to Silicon Valley, from delivering the first ASIC miner to going public on NASDAQ and launching home-series mining machines, Canaan has been frogging ahead on the path of decentralization. Looking back at the past year, we remain firmly committed to R&D and to delivering high-quality, high-performance, and customized Bitcoin mining solutions. Our A15 series has been embraced by demanding customers by the North American market. Our Avalon Home series, which combines Bitcoin mining and home-use functionality, is designed to meet the needs of a diverse global customer base. We have continued to strengthen our global presence, winning orders from and building our strategic partners with leading publicly listed miners in North America, thus raising our brand awareness and market share in the region.
Speaker Change: From Beijing to Singapore to Silicon vary from TV.
Speaker Change: <unk> for us to ASIC monarch, two going public on NASDAQ and launching <unk>.
Home serious mining machines.
Speaker Change: Ken has been.
Speaker Change: Throbbing hat answer parts of decentralization looking back at the past year.
Speaker Change: We remain.
Speaker Change: Firmly committed to R&D and to delivering high quality high performance and customized FIFA mining solutions, our <unk> series.
Speaker Change: Series has been embarrassed by demanding customers, but NAS.
Speaker Change: Britain market, our INR home series.
Speaker Change: Combined with our mining at home use.
Speaker Change: Optionality is designed to meet the needs of diverse global customer base. We have continued to strengthen our global presence winning orders from building our strategic partners.
Speaker Change: Our leading publicly listed minus in North America.
Speaker Change: Rising our brand awareness and the market share in the region.
Nangeng Zhang: As a NASDAQ listed company, we are impressed by America, empowered by America, and dedicated to America. We have actively leveraged the strengthening of U.S. capital markets to support our growth, and we are rapidly advancing heavy assets projects, such as mining operations in U.S., which is now beginning to take shape. At the same time, we continue to push forward our global strategy. We are optimizing our strategy for R&D, supply chain manufacturing, and logistics. We are exploring local production to adapt to the evolving compliance environment. We remain confident in the long-term potential of Bitcoin. We will stay focused on innovation, operational excellence and reinforcing our role as an important player in the Bitcoin ecosystem.
Speaker Change: The NASDAQ listed company, we are impressed by.
Speaker Change: Is priced by America, empower a biomarker and.
Speaker Change: Dedicated to America.
Speaker Change: We have activity now reached to the stress.
Speaker Change: U S capital markets.
Speaker Change: As part of our growth and we are rapidly.
Speaker Change: Rising heavy assets protect such as mining operations in U S, which is now beginning to take shape.
Speaker Change: Same time, we continue to push forward our global strategy, we are optimizing our strategy for R&D supply chain manufacturing and logistics.
Speaker Change: Exploring.
Speaker Change: Local production to adapt.
Speaker Change: To the evolving compliance environment, we remain confident in the long term potential of bitcoin.
Speaker Change: We will stay focused on innovation operational excellence and reinforcing our role as an important player in the ecosystem.
Nangeng Zhang: This concludes my prepared remarks. Thank you everyone.
Speaker Change: This concludes my prepared remarks. Thank you everyone I will now turn the call over to our CFO James Thank you.
James Cheng: I will now turn the call over to our CFO James. Thank you. Thank you, NG, and good day, everyone. This is James, CFO of Canaan. I'm very glad to share our Q4 financial results with you today. As NG stated at the start of the call, in Q4 last year, the trends of Bitcoin price and total network hash rate were relatively favorable for miners. We fully leveraged this positive market trend, leading to increased sales and the delivery of mining machines, and to the growth in energized hash rates of our own mining operations.
Speaker Change: Thank you Angie and good day, everyone. This is James CFO Cana and there is a lot to share our Q4 financial results with you today.
Speaker Change: As stated at the start of the call in quarter four last year, the chance of Bitcoin price in total network hash rate were relatively favorable for miners.
Speaker Change: We fully leveraged as positive market trends, leading to increased sales and the delivery of mining machines and to the growth in energize the hash rates of our own mining operation.
James Cheng: Let me give a quick summary of our financial performance for the fourth quarter. First, the computing power sold reached 9.1 million TeraHash per second, breaking our previous record. Total revenue reached approximately $89 million, beating our guidance of $80 million, and resulting in year-over-year growth of approximately 81%, as well as the highest quarterly revenue in the past two years. Secondly, through the increased deployment in our mining operations, our mining revenue reached 15.3 million US dollars in this quarter, and increased approximately 313% year-over-year, exceeding the pre-halving level in 2024. We mined 186 bitcoins in this quarter and increased of 84% year over year.
Let me give a quick summary of our financial performance for the fourth quarter.
Speaker Change: First the computing power. So they reached the $9 1 million Taro has put certain breaking our previous record.
Speaker Change: Total revenue reached approximately $89 million, beating our guidance of $80 million and a resulting in year over year growth of approximately 81%.
Speaker Change: As well as the highest quarterly revenue in the past two years.
Speaker Change: Secondly through the increased deployment in our mining operations, our mining revenue reached $15 3 million U S dollars in this quarter and increased approximately 313% year over year exceeding the three have been level in 2024.
Speaker Change: We mined 186 points in this quarter, an increase of 84% year over year.
James Cheng: As we've reported in our monthly production updates, in Q1, we continued the trajectory of accumulating more bitcoins. In the end of February, our total bitcoin holding reached 1,355. We are steadily advancing towards our target of achieving 10 exahash per second in North America and 15 exahash per second globally by middle of 2025. As announced today, we further expanded our North American mining capacity by signing agreements with two new partners in Pennsylvania and Texas, which will add 4.7 exa-hash per second to our North American mining capacity. This will bring our global deployed mining capacity to have potential to grow to 11 exahash per second with 6 exahash per second in North America.
Speaker Change: As we reported in our monthly production update in quarter, one we continue that trajectory of accumulating market corn.
Speaker Change: In the end of February our total bid Kwan holding reached 1355, we are steadily advancing towards our target of achieving task. The hospice segment in North America, and 15 extra cash consistent globally.
Speaker Change: Sure.
Speaker Change: <unk> hundred five.
Speaker Change: As announced today, we further expanded our north American mining capacity by signing agreements with two new partners in Pennsylvania, and Texas, which will add for several ex us.
Speaker Change: Second to our North American mining capacity.
Speaker Change: This will bring our global deploy the mining capacity to have potential to grow to 11% with different at the hospital segment in North America.
James Cheng: Next, we completed the upgrade cycle of the product portfolio of our mining machines, and the A15 series is now our main sellable product, leading to US$73 million of machine sales revenue. More than 17,000 units of the A15 series were delivered in Q4, of which over 80% came from the large orders of public mining companies, including Cypher, CleanSpark, and Hive. These results demonstrate that our North American focus which began just over two years ago is having a positive impact on our business.
Speaker Change: Next we completed the upgrade cycle of the product portfolio of our mining machine and <unk> is now our main sellable products, leading to $73 million of machine sales revenue.
Speaker Change: More than 17000 units of the <unk> theorists, who are delivered in quarter four of <unk>.
Speaker Change: Rich over 80% came from the large orders of public mining companies, including diaper clean spot and a half.
Speaker Change: These results demonstrate that our North America focused.
Speaker Change: Which began just over two years ago is having a positive impact on our business.
James Cheng: On the consumer front, our first home series consumer product, the Avalon Nano 3, continued to gain adoption by individual users globally. In 2024, the total orders for Avalon Nano 3 reached approximately 24,000 units and contributed $2.7 million to the four-year revenue. At the beginning of 2025, our Avalon home series was further expanded, and to date, the orders for the new product reached more than 12,000 units valued at $5 million. Finally, thanks to the significant narrowing of gross loss and the upward Bitcoin price, we achieved a gain of quarterly adjusted EBITDA of $19 million for the first time since the start of market downturn two years ago.
Speaker Change: On the consumer front, our first home theater is consumer product to the Avalon Nano suite continues to gain adoption by individual users globally.
Speaker Change: In 2010 before the total orders for Avalon. Nonetheless, we reached approximately 24000 units and contributed $2 $7 million to the full year revenue.
Speaker Change: After the beginning of 2025, our Avalon homes series was further expanded and to date the orders for the new products reached more than 12000 units valued at $5 million.
Speaker Change: Finally, thanks to the significant narrowing of gross loss and in the upward the corn price. We achieved a 10 of quarterly adjusted EBITDA of $19 million for the first time since the start of market downturn two years ago.
James Cheng: Additionally, our cash flow from production and operations turned positive, contributing $17 million in this quarter, strengthening our cash balance and allowing us to end the year with $96 million.
Speaker Change: Additionally, our cash flow from production and operations turned positive contributing $17 million in this quarter strengthening our cash balance and allowing us to end the year with $96 million.
James Cheng: Moving to our Profit and Loss for the quarter. Total revenue was approximately $89 million. As I mentioned earlier, mining revenue contributed $15.3 million in Q4, an outstanding year-over-year increase of 313%. We mined 186 bitcoins in the quarter, year-over-year increase of 84%. This increase was primarily driven by more computing power installed for our mining business, which reached 5.4 exahash at the end of this quarter, resulting in a historical high. As announced today, we have recently expanded our North American mining footprint by 4.7 exa-hash-per-second through two new projects in Pennsylvania and Texas. When fully operational, these additions will bring our ore-rider mining capacity to have the potential to grow to around 11 exahash per second, with 6 exahash per second in North America.
Speaker Change: Moving to our profit and loss for the quarter.
Speaker Change: Total revenue was approximately $89 million as I mentioned earlier <unk> revenue contributed $15 $3 million in Q4, an outstanding year over year increase of 300.
Speaker Change: 13%.
Speaker Change: We mined 186 points in the quarter year over year increase of 84%. This.
Speaker Change: This increase was the primarily driven by more computing power installed for our mining business, which reached.
Speaker Change: Five four at the harsh SD end of this quarter, resulting in a historical high.
Speaker Change: As announced today, we have recently expanded our north American mining footprint by $4 seven extra hushed second through two new projects in Pennsylvania and Texas.
Speaker Change: Fully operational these additions will bring our rider mining capacity to have the potential to grow to around the level of extra hospital sector with <unk> <unk> seven in North America, We will continue to disclose the operational progress in our monthly mining report.
James Cheng: We will continue to disclose the operational progress in our monthly mining report.
James Cheng: Now turning to product revenue. Revenue from machine sales was approximately $73 million, an increase of approximately 64% year-over-year. We delivered a total computing power of 9.1 million TeraHash per second, representing a year-over-year increase of 66% and marking a record high quarterly sales volume. The average selling price, or we say AST, remained stable at $8.1 per TeraHash per second compared to $8.2 per TeraHash per second in the same quarter of 2023. With the de-stocking of our A13 and A14 series nearly completed, we expect the average selling price to return to a more reasonable level in the first quarter of 2025.
Speaker Change: Now turning to product revenue revenue from <unk> sales was approximately $73 million an increase of approximately 64% year over year. We delivered a total computing power totaled $9 1 million Taro hospice segment, representing a year over year.
Speaker Change: <unk> of 66% and marking a record high quarterly sales volume.
Speaker Change: The average selling price I would say ASP remained stable at $8 $1 apparel, hodgkin setup compared to $8 $2 per Taro has put <unk>.
Speaker Change: In the same quarter of 2023.
Speaker Change: Was that the stocking of our <unk> nearly completed we expect the average selling price and returned to a more reasonable level in the first quarter of 2025.
James Cheng: More than 17,000 A15 mining rigs were delivered in Q4, of which nearly 80% were delivered to the public mining companies in North America, including Cypress, Innsbruck, and Hyatt. Turning to the revenue from our Avalon Home Series, by end of 2024, we received orders for approximately 24,000 units of our nanoproducts, reaching customers in 80 countries and contributing revenue of approximately $2.7 million since their launch. Our newly launched Avalon Mini and Avalon Q have also attracted significant attention to this consumer product line. To date, we have received orders for more than 12,000 units of this new Avalon Home product.
Speaker Change: More than 17000, <unk> mining rates for delivery in Q4 of which nearly 80% will be delivered to the public mining companies in North America, including Sanford, but in Ohio.
Speaker Change: Turning to the revenue from our Avalon home series by end of 2024, we received orders for approximately 24000 units of our nano products, reaching customers in 80 countries and is contributing revenue or gross profit by approximately $2 seven.
Speaker Change: Since the launch of our newly launched the ethanol Mimi and Avalon Q have also attracted significant attention to this consumer product lines to date, we have received orders for more than 12000 units of this new Avenue home products.
James Cheng: with a total amount of $5 million. For our mining machine costs, we accrued $13.6 million for inventory write-down in a quarter. With the successful clearance of pre-age generation product inventory, inventory write-down decreased 76% year-over-year. The non-cash write-down is made under U.S. GAAP rules impacting on our gross profit but with no impact on our cash balance. Excluding the above write-down, our mining machine sales would have break-even for this quarter. Leveraging the rising Bitcoin price and our efficient management of mining operating costs, our direct mining margin improved to 42%. Please note that direct mining margin is calculated by subtracting our mining operation costs for energy and hosting from our mining revenues, but without the depreciation of deployed machines.
Speaker Change: With the total amount of $5 million.
Speaker Change: For our mining machine costs, we accrue the 13 6 million for.
Speaker Change: For inventory write down in the quarter with a successful clearance of previous generation productivity inventory inventory slide down decreased to 76% year over year. The noncash write down was made on the U S. GAAP rules impacting on our gross profit about with no impact on our cash balance.
Speaker Change: Excluding the above right on our mining machine sell wood.
Speaker Change: Breakeven for this quarter.
Speaker Change: Leveraging the rising bitcoin price and our efficient management of our mining operating costs, our direct mining margin improved to 42%. Please note that direct margin is calculated by subtracting our mining operation cost for energy and hosting from our mining.
Speaker Change: Revenues without the depreciation of deployed in machine.
James Cheng: Demonstrating our robust top-line growth and our effective cost optimization measures, our gross loss for the fourth quarter was $6.4 million, a substantial reduction of 88% year-over-year. Turning to the expenses, our operating expenses totaled $49.3 million, increasing $10.1 million year-over-year. This rise was primarily driven by our global business expansion and our risk mitigation activities, including staff costs, professional service fees, and R&D expenditures. We recorded $9.3 million for one-off expenses in the quarter, including share-based compensation cancellation, one-time R&D expenditures, and consulting fees. If these one-off expenses were excluded, operating expenses would have been $39.8 million, remaining stable year-over-year.
Speaker Change: Now most stretching our robust topline growth and effective cost optimization measures our gross loss for the fourth quarter was $6 $4 million of substantial.
Speaker Change: A substantial reduction of 88% year over year.
Speaker Change: Turning to the expenses, our operating expenses totaled $49 3 million, increasing $10 $1 million year over year. This rate was primarily driven by our global business expansion and our risk migration activities, including staff costs professional fees.
Speaker Change: <unk> and R&D expenditures.
Speaker Change: We recorded a $9 $3 million for one off expenses in the quarter, including share based compensation cancellation onetime R&D expenditures and consulting fees.
This one off expenses, excluding operating expenses will have been $39 8 million.
Speaker Change: You mentioned stable year over year.
James Cheng: As mentioned, in Q1 2024, we chose to adopt the FASB new accounting rules on cryptocurrency assets on January 1, 2024. These new rules allow cryptocurrencies to be carried at their fair market value. In the fourth quarter, the price of Bitcoin increased to around $95,000 at the year-end of 2024 versus around $63,500 on September 30, 2024, contributing to an aggregate gain on crypto assets of $39 million during this quarter. All things above considered, our adjusted EBITDA was a gain of $19.3 million, mainly driven by the solid revenue growth and significant narrowed gross loss, as well as the upward Bitcoin price.
Speaker Change: As mentioned in quarter, one 'twenty 'twenty four we chose to adopt Fasb's, new accounting rules on crypto currency assets on January one.
Speaker Change: Any thoughts this new rules allow crypto currencies to be carried at their fair market value.
In the fourth quarter, the price of corn increased to around $95000.
Speaker Change: The year end of 2024 versus around was 63 point $5000 on September 30, <unk> hundred <unk> contributing towards aggregate again on capital assets.
Speaker Change: $39 million during this quarter.
Speaker Change: All things above consider our adjusted EBITDA once again.
Speaker Change: $19 $3 million magnitude by the solid revenue growth and a significant to narrow the gross losses as well as the upward a bit corn price. This is the first time, we achieved a quarterly EBITDA profitability since quarter, one 2020 suite.
James Cheng: This is the first time we achieved quarterly EBITDA profitability since Q1 2023.
James Cheng: In Q4 2024, we recorded a valuation allowance against our deferred tax assets. as well as unrecognized tax benefits liability. This follows the conservatism principle in accounting and resulted in a non-cash income tax expense of $85 million. When we generate profits in the future, this deferred tax asset can still be used to offset our income tax expense.
Speaker Change: In quarter four 2024, we recorded a valuation allowance against our deferred tax assets.
Speaker Change: Well as unrecognized tax benefit liability.
Speaker Change: This follows the Pennsylvania, GSM principal accounting and it resulted in a noncash income tax expense.
Speaker Change: $85 million.
Speaker Change: Well, we generate profits in the future. This deferred tax asset can still be used to offset our income tax expenses.
James Cheng: In the quarter, we issued 30,000 Series A1 Preferred Shares, with a gross proceeds of $30 million. The third tranche of the Series A Preferred Shares issued in Q3 2024 was still recognized as a convertible liability at fair value as of the year-end. This financing incurred an excess of fair value over proceeds received and fair value changes. This non-cash accounting treatment hit our Q4 bottom line for a total of $4.8 million. In order to represent our performance more accurately and more comparably, we excluded the impact of this accounting treatment from our non-GAAP measure.
Speaker Change: In the quarter, we issued 30000 series a.
Speaker Change: A one preferred shares with gross proceeds of $30 million. The third tranche of the series a preferred shares issued in quarter. Three 2024 was still recognized as a convertible liability at fair value as of the year and this financing incurred.
Speaker Change: The excess of fair value over proceeds received and the fair value changes this noncash accounting treatments, Peter our Q4 bottom line for a total of $4 8 million.
Speaker Change: In order to represent outperformance more accurately and more comparably, we excluded the impact of this accounting treatment from our non-GAAP measures.
James Cheng: Turning to our balance sheet and cash flow, at the end of Q4, we held a cash of $96 million on our balance sheet, an increase of around 34% compared to the end of Q3. During the quarter, our cash flow from production and operations turned positive. generating 17 million dollars. A cash outflow of $71 million for production and operation was offset by a cash inflow of $82 million from sales and $6 million from export VAT refunds. In Q4, we received $30 million from our preferred shares financing and we paid $22 million to secure our wafer supply.
Speaker Change: Turning to our balance sheet and cash flow at the end of quarter. Four we held cash of $96 million on our balance sheet, an increase of around 34% compared to the end of Q2 Q3.
Speaker Change: During the quarter, our cash flow from production and operations turned positive.
Speaker Change: <unk> generated $17 million.
Speaker Change: Our cash outflow of $71 million for production and operation was offset by a cash inflow of $82 million from cells and $6 million from export Vit rebounds.
Speaker Change: In quarter, four we received a $30 million from our preferred share financing and then we paid $22 million to secure our wafer supply.
James Cheng: With stable cash flow and the fourth halving completed, we have leveraged strategic financing tools to secure product capacity through prepayments. These activities will allow us to capitalize on the upcoming bull market while preparing for long-term mining demand despite short-term volatility of Bitcoin price.
Speaker Change: With stable cash flow in the fourth having completed we'll have leverage strategic financing tools to secure.
Speaker Change: That capacity through prepayments these activities will allow us to capitalize on upcoming pool markets.
Speaker Change: <unk> preparing for long term mining demand.
Speaker Change: Despite short term volatility of the corn price.
James Cheng: At the end of 2024, we entered into an ATM agreement. From the end of 2024 to February 19, 2025, we utilized the ATM for fundraising with net proceeds of $42.5 million at an average price of $2.08 per ADS. We did not utilize the ATM after February 19, 2025. In early March, we closed the first tranche of New Series A1 Preferred Shares with net proceeds of $99.7 million. Total proceeds of approximately $145 million will be used to fund the expansion of our production scale and manufacturing or investing in our mining operations in North America.
Speaker Change: At the end of 2024, we entered into an ATM agreement from the end of 2019 for till February 19, 2025, we utilized the ATM for fund raising with net proceeds of $42 5 million.
Speaker Change: At an average price of 2.0 $8 for Aes.
Speaker Change: We did not utilize the ATM. After February 19 2025 in early March we closed the first tranche of New series, a one preferred shares with net proceeds of $99 $7 million total proceeds of approximately $145 million.
Speaker Change: Will be used to fund the expansion of our production scale and a manufacturing or investing in our mining operation in North America.
James Cheng: At the end of Q4, the aggregate balance of inventory and prepayments and other current assets was $185.5 million, a decline of $40.6 million compared to the end of Q3. This decline was driven by the clearance of pre-generation product inventory and upgraded inventory composition.
Speaker Change: At the end of the Q4, the aggregate balance of inventory and prepayments and other current assets was $185 5 million a decline of $46 million compared to the end of Q3. This decline was driven by the series of Korea.
Speaker Change: Generation product inventory and upgraded a union fee compensation.
James Cheng: Now turning to our Bitcoin assets, Bitcoin held as our own holding asset increased in this quarter, reaching a record high of 1,293 bitcoins as of December 31st. This is 81 more than 1212 at the end of last quarter. On December 31st, 2024, the fair market value of our own bitcoins totaled around $123 million. And our total strategy gain was approximately $66 million, higher than the original value of the bitcoins that we gained from mining or other operations. As of February 28th, our total Bitcoin holdings increased to 1,355 as already disclosed. By the end of 2024, we pledged 600 bitcoins for secured loans with an aggregate carrying value of $24 million, which we believe is a reasonable interest level.
Speaker Change: Now turning to our bitcoin assets bitcoin held at.
Speaker Change: Our own holding assets, increasing this quarter, reaching a record high of 1293 big clients as of December 31st.
Speaker Change: This is 81 more than.
12, 12 at the end of last quarter on December 31, 2020 for the fair market value of our own the big clients total around $123 million.
Speaker Change: And our total strategy again was approximately $66 million.
Speaker Change: Higher than the original value of the bitcoin that weekend from mining or other operations as.
Speaker Change: As of February 28, our total Bitcoin holdings increased to 1355 as already disclosed.
Speaker Change: By the end of 2024 pledged 600 declined four secured loans with an aggregate carrying value of $24 million, which we believe is a reasonable interest level.
James Cheng: The secured loans enable additional liquidity for our production, expansion, and operations. We also transferred 100 bitcoins into a fixed-term product with a guaranteed minimum annual return. In the future, as part of our hold-on strategy, we will explore more ways to increase capital liquidity through our own crypto assets. Please note that bitcoin pledged or transferred into fixed-term products are recognized as crypto currency receivables in our balance sheet, and the classification between current and non-current assets is consistent with the period of corresponding secured loans or fixed-term products.
Speaker Change: Cumulative loans enable additional liquidity for our production expansion and operations. We also transferred 100 clients the towards the term product with a guaranteed.
Many months annual return in the future as part of our total strategy, we will explore more ways to increase capital liquidity through our own <unk> assets. Please note that bitcoin pledged our transfer agent. Its term products are recognized as critical currency receivables in <unk>.
Speaker Change: Our balance sheet and a classification between current and non current assets is consistent with the peer rates of corresponding secured loans are fixed rate term products.
James Cheng: In the first quarter of 2025, as the CEO mentioned, we anticipate the revenue of $75 million due to the seasonality of our business confounded by the uncertain economic environment as well as the volatility of Bitcoin prices. Based on our current visibility on orders and waiver capacity, we anticipate revenue of $120 to $150 million for the second quarter of 2025.
Nanking Chang: In the first quarter of 2025 as CEO mentioned that we anticipate the revenue of $75 million due to the seasonality of our business compounded by the uncertain economic environment as well as the volatility of bitcoin prices.
Nanking Chang: Based on our current visibility on orders and our wafer capacity, we anticipate revenue of $120 million to $115 million for the second quarter of 2025.
James Cheng: This concludes our prepared remarks.
Nanking Chang: This concludes our prepared remarks, we are now open for questions.
Operator: We are now open for questions. Thank you. We will now begin the question and answer session.
Nanking Chang: Thank you we will now begin the question and answer session.
Operator: As a courtesy to other investors and analysts who may wish to ask a question, please limit yourself to three questions at a time. If you have any follow-up questions after the Q&A session, the Investor Relations team will be available after the call.
Nanking Chang: Okay.
Nanking Chang: Investors and analysts who may wish to ask a question. Please limit yourself to three questions at this time.
Nanking Chang: You have any follow up questions. After the Q&A session. The Investor relations team will be available after the call.
Operator: For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. If you would like to ask a question, please press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Thank you.
Nanking Chang: For the benefit of all participants on today's call. If you wish to ask your question to management in Chinese. Please immediately repeat your question in English.
Nanking Chang: If you would like to ask a question. Please press star one and one on your telephone.
Nanking Chang: <unk> for your name to be announced to withdraw your question. Please press star one and one again.
Thank you.
Nicholas Giles: We will now take our first question. This is from the line of Nick Giles from B Reilly Securities. Please go ahead. Thank you, operator, and good morning, everyone. And G&T, congrats on the progress here more recently.
Nanking Chang: We will now take our first question.
Speaker Change: This is from the line of Nextgen <unk> from B Riley Securities. Please go ahead.
Speaker Change: Thank you operator, and good morning, everyone.
Speaker Change: And Jane and team congrats on that.
Speaker Change: Progress here more recently.
Nangeng Zhang: My first question is, can you give us an update on any site acquisition activity or how you're approaching procuring power infrastructure in the current environment? Curious if you've observed any changes or challenges here in 2025 as demand for power assets remains very strong. Thanks very much. uh, morning Let me see the questions. I think we have been actively looking for the sites in energy. North America. Our cooperation model is very flexible. We can do fixed rate hosting, joint mining with profit sharing, or even acquire and build our own sites. Right now, the site resources we've secured are high, actually more than enough to support our current deployment plan, which targets its 10x hash in the first half of the year.
Speaker Change: First question is can you give us an update on any site acquisition activity or how.
Speaker Change: How you're approaching procuring.
Speaker Change: Power infrastructure in the current environment.
Speaker Change: I'm curious if you've observed any changes or challenges here in 2025 as demand for.
Speaker Change: Power assets remains very strong thanks.
Speaker Change: Thanks very much.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Alright.
Speaker Change: Let me take questions.
Speaker Change: Yeah.
Speaker Change: I think we have been.
Speaker Change: It could be looking for the types of.
Speaker Change: Energy.
Speaker Change: Energy reached regions across.
Speaker Change: North America.
Speaker Change: Our operational model.
Speaker Change: Very flexible.
Speaker Change: We can to fix the rate hosting.
Speaker Change: Towards mining.
Speaker Change: Profit shares.
Speaker Change: Sherri or even acquire and build our own sites.
Speaker Change: Now the site our resources.
Speaker Change: Cured are high.
Speaker Change: Actually more than enough to support our current deployment plan.
Speaker Change: We should target.
Speaker Change: <unk>.
Speaker Change: Half of the year.
Nangeng Zhang: Since the shift of our focus to the U.S. from last year, we have seen more opportunities than we originally expected, and recently, due to some changes in U.S. policy, it seems that new power generation capacity may become available in the near future, which would benefit us even more. We have also noticed that some institutional players in North America are thinking about allocating part of their power resources to AI or HPC hosting. We truly hope those efforts succeed. AI and HPC business can bring more predictable cash flow for our customers. which in turn could attract more institutional interest and rise the overall valuation of their operations, would help their business, including having more power and capital available, then they can go to Bitcoin mining to consume their electricity.
Speaker Change: Sales shift our focus to U S.
Speaker Change: From last year.
Speaker Change: We have see more opportunities than we.
Speaker Change: Operationally.
Speaker Change: Expected and recently.
Speaker Change: During the due to some.
Speaker Change: Changes in U S.
Speaker Change: Policy.
Speaker Change: It seems that new power generation.
Speaker Change: <unk> team, maybe become available in the near future.
Speaker Change: Which benefits us even more.
Speaker Change: We have also noticed that.
Speaker Change: Institutional players in North America, I think about allocating part of their power resources to AI or HBC hosting.
Speaker Change: We truly hope those efforts succeed.
Speaker Change: And HBC business can bring more.
Speaker Change: Predictable cash flow for our customers.
Speaker Change: Which in turn could attract more institutional interest rates overall.
Speaker Change: <unk> of their operations.
Speaker Change: Would help there.
Speaker Change: Their business, if we can have more power and capital.
Speaker Change: Our variable debt.
Speaker Change: They can go through it.
Speaker Change: <unk>.
Speaker Change: So consumed.
Speaker Change: Terry electricity so.
Nangeng Zhang: Well, Bitcoin mining has much lower capex needs than AI or HPC. It consumes far more energy. On the other hand, AI and HPC offer very stable cash flows. That's why we believe these two sectors are actually complementary in the mid to long term. I hope we can see both Bitcoin mining and AI applications grow side by side going forward.
Speaker Change: Well on mining has much lower capex needs for that AI all HBC.
Speaker Change: It consumes far more energy.
Speaker Change: The other half AI and its PC over over a very stable cash flows.
Thats why we believe these two sectors actually complementary in.
Speaker Change: Two long term.
Speaker Change: I hope we can see both please.
Speaker Change: Mind, you that AI applications go side by side.
Speaker Change: Four.
Nicholas Giles: Yeah, thank you. Thank you very much, NG.
Speaker Change: Yes. Thank you.
Speaker Change: Thank you very much and Jeep.
Nicholas Giles: My next question is just on overall demand. Obviously, your 2Q guidance is a nice improvement from the 1Q guidance, and so I was wondering if you could Give us a sense for what the second half could look like. Is demand still improving? Your annual guidance does. imply a stronger second half. So wondering if you could comment on how you're seeing demand today and particularly on the pricing side and how that translates to your annual guidance. Okay, I will say something and maybe James will add some numbers to your question. I think look at our actual sales performance in Q4.
Speaker Change: My next question is just on overall demand.
Speaker Change: Obviously your <unk> guidance is a nice improvement from the <unk> guidance and so I was wondering if you could.
Speaker Change: Give us a sense for what the second half could look like.
Speaker Change: Is demand still improving.
Speaker Change: Your annual guidance does imply.
Speaker Change: Imply a stronger second half so wondering if you could comment on how you're seeing demand today.
Speaker Change: And particularly on the pricing side.
Speaker Change: And how that translates to your annual guidance.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: I'll say something and then maybe James to your add some numbers to your question.
Speaker Change: I think look at our actual sales performance in Q4.
Nangeng Zhang: It was quite good. We sold 9.1 million terahash of computing power. And it's already achieved our best. Yeah, it's already achieved our best result, historical result. And it includes the deliveries to North American big state companies like Cypher, Prince, Spark, and Hype. Yeah, this is reflects the success we have had in expanding our presence in North American market. In fact, customer order volumes at the end of the year is driven by the rise in Bitcoin price starting in November. Yeah, and as a result, we cleared our inventory, then we started to build our new inventory.
Speaker Change: It was.
Speaker Change: Quite good we saw $9 1 million Terra hash compute empower.
Speaker Change: Yes.
Speaker Change: Uh huh.
Speaker Change: And it's already achieve our best.
Speaker Change: Yeah It has already.
Speaker Change: Best result, Stifel a result.
Speaker Change: And.
Speaker Change: Citigroup.
Speaker Change: <unk> to North America in the state of Companys stock Cytori clean spark and ties.
Speaker Change: Yes at this stage.
Speaker Change: Reflects the success, we have had in expanding our.
Speaker Change: Pre sales in North American market.
Speaker Change: In fact customer order volumes at the end of <unk>.
Speaker Change: Year.
Speaker Change: It's driven by the <unk>.
Speaker Change: Right.
Speaker Change: Prior to starting in November.
Speaker Change: So.
Speaker Change: Yes.
Speaker Change: As a result, we can.
Speaker Change: Our inventory down we start to build our new inventory.
James Cheng: Most of the vapors still comes out, start from Q2 to Q3. The machines will come out majorly in Q2 and Q3, so we can foresee that from Q2 the number will be much larger than Q1. For the second half, I think the key is maybe about the Bitcoin price or the economic environment, which is really hard for us to predict today. But what I can say is, if the Bitcoin price is like, we don't need another historical high, maybe only like 100k, it's very significant for us to achieve our annual target. Yeah, I will add some color, Nick.
Speaker Change: Most of it.
Speaker Change: The wafer steel comes out start from Q2.
Speaker Change: For Q3.
Speaker Change: The machines will come.
Speaker Change: <unk> comes out later into 'twenty three.
Speaker Change: So we.
Speaker Change: Can foresee that from Q2, the number of a much louder than Q1.
Speaker Change: For the second half I think the key is.
Speaker Change: Maybe about.
Speaker Change: That will comprise or the.
Speaker Change: Economic environment, which is really hardcore.
Speaker Change: For us to predict today.
Speaker Change: But.
What I'd say is that it comprises like we don't need a historic another historic high.
Speaker Change: The only electric.
Speaker Change: <unk> is a very it's very significant for us to achieve our annual targets.
Speaker Change: Yes, I will add some color.
James Cheng: I think from our guidance on Q1, it has already showed in 2025, quarter one, the revenue is more than double of last year's same quarter. So the demand was strong. But as we both know, our orders and the revenue are highly correlated with Bitcoin prices. So recently, the turbulence in Bitcoin prices definitely have an impact on the speed of accumulating more contract orders, and also the trajectory of the price increases. But it looks our customer orders are still quite strong from the market. And we also have our North American mining sites building up on target.
Nick: Nick I think.
Speaker Change: From our guidance on Q1. It has already showed in 2025 quarter one than revenue is more than double.
Nick: Last year same quarter. So the demand was strong but as as we both know our orders and revenue are highly correlated with bitcoin prices. So recently the turbulences bitcoin prices.
Nick: Hi.
Nick: Definitely have an impact on the speed of accumulating more contract to orders and also the trajectory of the price increases.
Nick: Looks like our customer orders are still quite strong from the market and.
Nick: No.
Nick: And we also have our <unk>.
Nick: <unk> America mining sites during up on targets.
James Cheng: That's why I think we are still confident to work on towards the four-year target. And I think we are working on that, and NG just shared the capacity perspective. But demand perspective in quarter three or quarter four, we definitely need the macro environment turns to be more positive, and the Bitcoin price climbs to a new high. And then at that time, the demand could be strong and the price trajectory could be favorable to us. And then we will try to maximize our revenue for the full year. But currently, I think we are still stick to the annual target, and we are working towards this target.
Nick: That's why I think we have steel competence to work on towards the full year target.
Nick: And.
Nick: I think we are.
Nick: Working on that and <unk> just shared the capacity.
Nick: That is the demand perspective.
Nick: Quarter, three or quarter, four we definitely needed.
Nick: Macro environment.
Nick: To be more positive and bitcoin price clients to new Heights, and then at that time the demand could be strong end of the price trajectory could be favorable to us and then we will try to maximize our revenue.
Nick: For the full year.
Nick: Currently I think we are still stick to the annual targets and we are working.
Nick: Towards this target.
Nicholas Giles: Thank you Nick. NG, James, thank you so much for all the comments and keep up the good work. Thank you. Have a nice day. Thank you.
Nick: Thank you Nick.
Angie James: Angie James Thank you so much for all the comments and keep up the good work.
Speaker Change: Thank you thank you Vanessa.
Angie James: Thank you.
Operator: We'll now take our next question.
Angie James: We will now take our next question.
Kevin Cassidy: This is from the line of Kevin Cassidy from Rosenblatt Securities. Please go ahead. Yes, thanks for taking my question. Congratulations also on the great progress.
Speaker Change: This is from the line of Kevin Cassidy from Rosenblatt Securities. Please go ahead.
Kevin Cassidy: Yes, Thanks for taking my question and congratulations also on the great progress.
James Cheng: Just as we're talking about the full year revenue, can you say what the your ASIC orders are with your foundry partner that may not be accounted for by customer orders just yet? You know, how far out are your orders with the foundry versus what's your backlog? Thank you. Yeah. I think we just come from bear markets. We typically, in bear markets, we typically produce based on sales orders. which helps the company control the risks about product inventory. Currently, we are just out of the bear market and at the early stage of bull market. for mining machines.
Kevin Cassidy: Just as you were talking about the full year revenue can you say what the.
Speaker Change: Your <unk> orders are with your foundry partner that may not be accounted for by customer orders just yet how far out are your orders with the foundry versus what's your backlog.
Speaker Change: Thank you.
Speaker Change: Yes.
Speaker Change: Let me see.
Speaker Change: I think we are just comps from bear markets.
Speaker Change: Typically <unk>, we typically produced basis.
Speaker Change: SaaS odors.
Speaker Change: Which helps the company controlled.
Speaker Change: The risks about product inventory.
Speaker Change: Currently we are just out of the bear market is at the.
Speaker Change: Early stage market.
James Cheng: And maybe this month we are in the turbulence of the bull market. So we are gradually increasing our production, but we are not placing orders at maximum capacity. With all the wafers, we must consider many factors, including but not limited to our cost, how tight the supply chain is, and what is the miners' expected profitability about hash price. and the competitive landscape in the markets for the next, say, six to twelve months. So, for the commercial confidentiality reasons, we are not disclosing the exact number for how many biffers we already ordered at this time, but it appears that the machine production will continue through Q3.
Speaker Change: For vending machines and maybe this months.
Speaker Change: <unk>.
Speaker Change: Paul market.
Speaker Change: So we are gradually increasing our production.
Speaker Change: But we.
Speaker Change: We are not place orders.
Speaker Change: Maximum.
Speaker Change: Capacity.
Where are the wafers, we can pay so we must consider many factors.
But not limited to like.
Speaker Change: Our cost how tight the supply chain is.
Speaker Change: And what is the main mine is expected.
Speaker Change: Probability about half price.
Speaker Change: And.
Speaker Change: The landscape in the markets for our next.
Speaker Change: Six to 12 months.
Speaker Change: So for the commercial confidentially readers, we are now closing the <unk>.
Speaker Change: Number four how many wafers reorder at a time.
Speaker Change: But it appears that the machine production will continue through Q3.
James Cheng: If the market demand doesn't increase significantly, it should be sufficient to meet both our sales and our own mining operations. If demand increases, we still have time, so we have room to place additional orders to meet the demand. up a few tenths of a percentage of the capacity to fulfill the additional orders. And if the demand weakens, we can increase the number to our own mining operation. So, I think for the current... The capacity in the production line, it shouldn't be a major issue for the inventory.
If the market demand doesn't increase it.
Speaker Change: It can really it should be sufficient to meet both.
Speaker Change: Our sales and our own mining operations.
Speaker Change: If demand increases we still have time, so we have room to place additional orders too.
Speaker Change: Op.
Speaker Change: Blackstone.
Speaker Change: A few tenths of a percentage.
Speaker Change: Our capacity to.
Speaker Change: <unk> fulfilled additional orders.
Speaker Change: And if the demand weakens.
Speaker Change: We can increase.
Our.
Speaker Change: We also increased our update to the number two our mining operations.
Speaker Change: So I think.
Speaker Change: For the current.
Speaker Change: Yeah.
Speaker Change: Capacity in the production.
Speaker Change: Production line.
Speaker Change: It should be it should be a major issue for forward inventory.
Speaker Change: Okay.
Nicholas Giles: Great. Thanks. And you announced the A16 ASIC is 300 terahash per second. That's, that's a great improvement.
Speaker Change: Great. Thanks.
Speaker Change: Dan.
Speaker Change: You announced the $8 16, a circus.
Speaker Change: 300 <unk> per.
Nangeng Zhang: Is there anything more than besides the, you know, the going to the better or lower process node, any architectural changes that you're making to the ASIC that's giving you this improvement? Yeah, I think the A-16 indeed is using the very cutting edge technology like the GEA technology and even smaller transistor sizes compared to A-15. But it's not simply a straightforward part of our previous generation. I think if you look back into the history, every generation of our products has often achieved much more significant performance improvements. And many different generations of our many machines is in one-node process or even one-node process upgrades or even using the same process.
Speaker Change: Thats a great improvement is there.
Speaker Change: Anything more than besides going to better or lower process node any architectural changes that youre, making to the ASIC, that's giving you this improvement.
Speaker Change: Yeah, I think that.
Speaker Change: <unk>.
Speaker Change: I think that <unk> is using the <unk> technology right.
Speaker Change: Technology is even smaller transistor sizes.
Speaker Change: Our 2015.
Speaker Change: But there is no simple.
Speaker Change: Stripes Board.
Speaker Change: Part of our previous generation.
Speaker Change: If you look back looking back into history, I regenerative shop, all of our products has opened achieved.
March warrant.
Speaker Change: Evidence for those improvements.
Speaker Change: And many.
Speaker Change: For generations, our many machines in one one off process.
Speaker Change: Sure.
Speaker Change: Or even.
Speaker Change: One note process upgrades or even using the same process.
Nangeng Zhang: These performance gains are far greater than the percentage improvements indicated by wafer manufacturers during each process of the iteration. This is because and many others. Thank you. There are innovations and many technical advancements ongoing. And also come to this phase, besides process and design, we are already at the DTCO, the Design Technology Co-Organization stage to even increase the performance even more. Perhaps you can notice that each generation of our product shows about 20 to 30 percent of the improvements. But what I must say is there isn't a magic number there to give us such a big improvement.
Speaker Change: This pro forma expense as far greater than the percentage of formats.
Speaker Change: Aided by wafer manufacturers doing each process.
Speaker Change: Iteration.
Speaker Change: Just because.
Speaker Change: Our.
Speaker Change: Designers.
Speaker Change: Two in there.
Speaker Change: <unk> innovations.
Speaker Change: Many technical.
Speaker Change: Divestments are going.
Speaker Change: And also come through these days.
Speaker Change: Besides process and the design.
Speaker Change: We are already at the peak.
Speaker Change: <unk>.
Speaker Change: Deductive logic co operate authorization.
Speaker Change: Stage two even.
Speaker Change: Kris.
Speaker Change: The performance even more.
Perhaps you can notice that each letter issued at our product shows about 20% to 30%.
Speaker Change: The.
Speaker Change: Improvements.
Speaker Change: But.
Speaker Change: I must say is this.
Speaker Change: There isn't a magic number there to give us that.
Speaker Change: <unk> and.
Nangeng Zhang: It's more likely that we have like 50, 80 individual technical improvements. Every contribute like less than... half percent to lead to the, then they collectively together to lead to the overall result. As we move to advanced nodes, each new generation of technology is also needs a cycle time to improve. And I think the performance of ASICs and GPUs on the same new process may also vary significantly. As a design company, we need to spend a lot of time in the early stages now to reduce these uncertainties and minimize the risks to faster take-outs.
Speaker Change: Performance.
Speaker Change: It's more likely that we have at <unk>.
Speaker Change: The video technical improvements every contribute like that then.
Speaker Change: 5%.
Speaker Change: To lead to the debt.
Speaker Change: Collectively together to lead to the overall results.
Speaker Change: So.
Speaker Change: As we move to advanced nodes.
Speaker Change: Each new diary shaft technologies.
Speaker Change: Also needs a cycle time or two.
Speaker Change: To improve.
Speaker Change: And.
Speaker Change: I think the performance of Asics and the Gpus on the same new process.
Speaker Change: Also very.
Speaker Change: So that needs can delay.
So it is a company we need to spend a lot of tightened early stages now to reduce these uncertainties.
Speaker Change: Right.
Speaker Change: Risks to faster tape outs so.
Nicholas Giles: So maybe your question is maybe why there's many newcomers, even when they try to hire key technical talents from the industry, but still struggle to produce competitive products. Yeah. Sorry for having these. Thank you. That's okay. No, thank you for the details.
Speaker Change: Maybe youre question is maybe why there's many new commerce.
Speaker Change: Even when the fiber our key technical tenants from industry, but still struggle to.
Speaker Change: Produce.
Speaker Change: Compared to your products.
Sorry.
Speaker Change: That would mean.
Speaker Change: Thank you okay. Thank you for the detail.
Nangeng Zhang: And just one other is the 300 terahash per second is... For traditional or air cooled, do you have an estimate of what it would be for immersion or just liquid cooled? Yes, I think for today, the emerging version of the machines is more common in the market, not just in China. Those constraints to the U.S. market, many different markets, we already observed this. So... Yeah, I think maybe the reason is many machines is now filled with much higher energy density and need better energy efficiency. This will bring more strict environment control needs. So liquid cooling can help to manage heat more effectively.
Speaker Change: And just one other.
Speaker Change: The 300 <unk> the second is.
Speaker Change: For traditional or air cooled.
Speaker Change: Whether it would be for immersion or just liquid cooled.
Speaker Change: Yes.
Speaker Change: Think for today.
Speaker Change: So emerging version of the <unk>.
Speaker Change: Machines.
Speaker Change: Yes.
Speaker Change: More.
Speaker Change: Comment.
Speaker Change: The market.
Speaker Change: No.
Speaker Change: Those.
Speaker Change: Failure to U S market many difference.
Speaker Change: Markets, we see.
Speaker Change: Already of derivatives.
Speaker Change: So.
Speaker Change: Yes, I think maybe the reason is mainly machines machines is now filled with much higher energy density and.
Speaker Change: Need better energy efficiency.
Speaker Change: Bruce.
Speaker Change: More strict.
Speaker Change: Governments control needs.
Speaker Change: <unk> DP reporting can help to manage a hit already.
Operator: So another reason may be the money hardware now must stay in use longer than old days. So this makes it worthwhile to invest more in the site setup to improve the stability and uptime. Yeah. Okay, thank you. Thank you.
Speaker Change: Effectively so.
Speaker Change: And another reason maybe.
Speaker Change: Hardware now masters they use longer then.
Speaker Change: All days.
Speaker Change: So this makes it worse.
Speaker Change: All to invest more in the site setup to improve.
Speaker Change: Stability and uptime.
Speaker Change: Okay. Thank you.
Speaker Change: Thank you.
Kevin Dede: We'll now take our next question. This is from the line of Kevin Dede from HCW, please go ahead. IMG.
Speaker Change: Okay.
Speaker Change: We'll now take our next question.
Speaker Change: This is from the line of Kevin Dede from H C. Definitely please go ahead.
Kevin Dede: Hi, James. Thanks. Thanks very much for having me on the call. I think firstly, I'd just like to congratulate you on managing your supply line. and deliveries to the US in light of the regulatory changes. I just thought that was very shabby of you gentlemen. and the team.
Speaker Change: IMG Hi, James Thanks, Thanks, very much for having me on the call.
Speaker Change: Firstly I'd just like to congratulate you on managing your supply line.
Speaker Change: And deliveries to the U S in light of the regulatory changes.
Speaker Change: I just thought that was very savvy of you gentlemen.
Kevin Dede: First, I was hoping you could offer a little more detail on how customer service has changed over the years. So I, you know, I've been following you for a long time and I I just like to understand what you think you're doing better now in the U.S. in winning customers.
Speaker Change: And the team.
Speaker Change: First I was hoping you could offer a little more detail on how customer service.
Speaker Change: <unk> has changed over the years.
Speaker Change: I've been following you for a long time.
Speaker Change: I just like to understand what you think youre doing better now in the U S and winning customers.
Nangeng Zhang: Hi, Kevin. Yeah, I think in recent years... As Bitcoin mining has become more global, the company has to provide maintenance and support services in a way that is closer to our customers. In addition to our standard one-year warranty for mining recorders, we have now 26 service stations or spare parts warehouses worldwide. This helps shorten the parts delivery cycle time and allows us to provide more time maintenance and parts replacement services for our customers. We also adjust the location of our service points based on customer distribution for future improved service efficiency. Additionally, based on customer feedback, our products have shown strong operational stability, particularly in very high temperature and humid environments.
Kurt: Hi, Kurt.
Kurt: Yes.
Kurt: In recent years.
Kurt: So as <unk> has become more global.
Kurt: Company has to providing martinez and our service in that.
Kurt: Those are two hour.
Kurt: Customers.
Kurt: In addition to our standard.
Kurt: One year warranty for minor rig owners.
Kurt: We have now.
Kurt: Six service stations or spare costs warehouses worldwide.
Speaker Change: His help shorten the.
Speaker Change: Pos delivery cycle time, and allow us to provide more time.
Speaker Change: Todays on the Pos.
Speaker Change: <unk> services for our customers.
Speaker Change: We also adjusted the location of our service to clients based on customer distributions for two thirds of the pool.
Speaker Change: Service efficiency.
Speaker Change: Additionally, based on customer feedback our products have shown.
Speaker Change: Strong.
Speaker Change: No.
Speaker Change: Stability.
Speaker Change: Pocket that particularly in very high temperature and.
Speaker Change: <unk>.
Speaker Change: <unk>.
Nangeng Zhang: where they continue to run effectively and very reliable. And also the return of the repair is actually very low now, especially for the A15 models. We also offer on-site customized mining solutions based on customers' specifications. such as Emergency Cloning and Code Development for some systems. It just ensures that our products and services can closely align and adaptable to our customers' diverse needs. Thank you for recognizing our success, but we are still striving for improvement. We believe we can do even better, and we aim to outperform two of our Chinese competitors in the following areas. First, we want to keep the failure rate of our products below the industry average, which comes from better design and high quality control during the production process.
Speaker Change: Where are they continue to run.
Speaker Change: Effectively.
Speaker Change: Very viable.
Speaker Change: And also the return of the repair is actually very low now expect free for its <unk> models.
Speaker Change: We also for our site.
Speaker Change: Lost money solutions based on customers.
Speaker Change: <unk> needs.
Such as emergent is liquidity.
Speaker Change: And.
Speaker Change: Welcome to the <unk>.
Speaker Change: Systems.
Speaker Change: This ensures that our products and services.
Speaker Change: Close to the airlines.
Speaker Change: So thats equal to our customers.
Speaker Change: Diverse needs.
Speaker Change: Receiving we are receiving positive feedback.
Speaker Change: Central for.
Speaker Change: Recognizing our success, but we still.
Speaker Change: Striving for equivalents, we believe we can do even better and we aim to outperform two of our Chinese competitors in the following areas.
Speaker Change: First we want to keep the failure rate of our products below the.
Speaker Change: She average.
Speaker Change: Which comes from better design and high quality control during production.
Speaker Change: Production process.
Nangeng Zhang: This approach particularly benefits for the high labor cost regions like the U.S. Second, we aim to ensure our North American team and management in Singapore work as one cohesive unit. Myself, along with our CFO and R&D and supply chain leaders, are all committed to ensure high customer satisfaction.
Speaker Change: This.
Speaker Change: Approach, particularly benefits for the high labor cost.
Speaker Change: Slide <unk>.
Speaker Change: Second we aim to ensure our loss of American Keybanc measurements in Singapore as one cohesive unit.
Speaker Change: Ourselves.
Speaker Change: Along with our CFO and R&D.
Speaker Change: On the supply chain leaders.
Speaker Change: Our committed to assure a high customer satisfaction.
Nangeng Zhang: Finally, from the very beginning, we have been a company driven by the value of decentralization. Therefore, we remain open to all customer requests, evaluating them only based on whether they make business sense and benefit the industry development. We don't want to limit customers' options of products. Thank you.
Speaker Change: Finally from the very beginning we have been a company driven by the value of the centralization. Therefore, we remain open to customer request.
Speaker Change: Evaluating them only based on whether that makes resistance and benefit the industry development.
Speaker Change: We don't want to limit customers options proactively.
Speaker Change: Thank you.
Speaker Change: Got it.
Kevin Dede: NG, can you talk a little bit about your North American customer pipeline and what the sales funnel looks like? The press release alluded to a new customer for the A15XP. Can you talk about that a little bit and maybe give us a little more comfort regarding where or how you see the second half coming together? I think last year we actively expanded into North American market and secured several major clients like Cypher, Hive, and TwinSpark. North American customers, owners, now represent about 40% of our product sales revenue in full year 2024.
Speaker Change: Can you talk a little bit about.
Speaker Change: Your North American customer pipeline, and what the sales funnel looks like.
Speaker Change: The press release alluded to a new customer for the <unk> SP can you talk about that a little bit and maybe give us a.
Speaker Change: A little more comfort regarding where.
Speaker Change: How you see the second half coming together.
Speaker Change: Okay.
Speaker Change: I think last year, we actively expanded in.
Speaker Change: North American market and secured several major clients.
Speaker Change: Seifer high benefits bar.
Speaker Change: Our north American customers holders now.
Speaker Change: Is that about 40% of our product sales revenue in full year 2024.
Nangeng Zhang: Thank you for watching. With the large-scale delivery of A15 orders to North America, sales from the region reached a historical high. I think yeah, we're Yeah, and also We are In the second half of this year, our sales system now is increasing their global market coverage. Last year we nearly 200 professional offline customers, and following we launched the Avalon Home series. We attracted a large number of retail customers, resulting in exponential growth in customer numbers. And in 2024, the total number of customers who have placed orders reached about 2,000. Now the company continues to go globalized.
Speaker Change: In Q4.
Speaker Change: With the large scale delivery of ICT <unk> orders to North America sales from the regime reached.
Speaker Change: Historical high.
Speaker Change: I think in our.
Speaker Change: Yes.
Speaker Change: And also.
Speaker Change: <unk>.
Speaker Change: We are.
Speaker Change: It does.
Second half of this year.
Speaker Change: Ourselves system.
Speaker Change: Now, it's increasing their global market coverage.
Speaker Change: Nir.
Last year, we nearly 200 professional offline customers.
Speaker Change: And.
Speaker Change: Following we lost out.
Speaker Change: Home series, we attracted a large number of our retail customers.
Speaker Change: <unk>.
Speaker Change: On T cell.
Speaker Change: <unk> in customer numbers and in 2024.
Speaker Change: So total number of customers who have placed orders reached about 2000.
Speaker Change: Now.
Speaker Change: They continue to go.
Nangeng Zhang: We have established special teams in regions such as North America and South Asia, creating multi-layered and comprehensive sales teams that reaches customers worldwide. Currently the number of new customers is substantial, and they generally have strong competitive advantages and high purchasing intention. However, I think large orders from new customers typically take some time to settle down. If the global political and economic situation, along with the Bitcoin price influenced by these factors, continue to rise steadily, I think this process will certainly accelerate. So, because in Q2 and Q3, our inventory, we, I think with our capacity, I mean, the machines will come out majorly in Q2 and Q3.
Speaker Change: Global rights, we have established.
Speaker Change: Special teams in regions, such as Bos America source Asia.
Speaker Change: Paving.
Speaker Change: Mark you there.
Speaker Change: Handset sales team.
Speaker Change: <unk> customers worldwide.
Speaker Change: Currently the.
Speaker Change: Number of new customers is substantial and has a January have strong <unk> and <unk>.
Speaker Change: Fortunately attention.
Speaker Change: However, I think the.
Speaker Change: Large orders from new customers typically it takes some time to.
Speaker Change: Settle down.
The global political and economic situation along with Cuprum.
Speaker Change: Few comprise influenced by these factors.
Speaker Change: Continue to rise steadily I think this process will certainly.
Speaker Change: Okay.
Speaker Change: So because in Q2 also stream our inventory.
Speaker Change: I think we our capacity the machines, we have pumps out later in Q3.
Nangeng Zhang: I think the capacity issue happens, especially in Q1, will be...
Speaker Change: I'd say the capacity issue habits.
Speaker Change: In Q1.
Nangeng Zhang: Marsh, Seth Hinton, Ruz Ghalei, Brian다가, So, I think, personally, I'm quite optimistic in Q2 and Q3.
Speaker Change: B.
Speaker Change: March.
Speaker Change: Thanks Syed.
Speaker Change: So.
Speaker Change: I think my question really we are.
Speaker Change: Ami.
Speaker Change: Quite optimistic.
Speaker Change: Okay.
Nangeng Zhang: Last question from EMG. You mentioned that the A-16 is now taped out. I'm wondering when you start placing orders for wafers for those machines? We start to place orders back to, I think our first big batch is in October to November last year, and we have a second batch for those in December. So the very first wheel continues to come out from Q1 this year, and we are in the wrap-up stage, the major part will come out in Q2 and Q3.
Speaker Change: Last question for me and Jay you mentioned.
Speaker Change: <unk> is now taped out.
Speaker Change: Im wondering when you start placing orders for wafers for those machines.
Speaker Change: We start to place orders.
Back to our first.
Speaker Change: Sure.
Big batch.
Speaker Change: Colbert to November last year, and we have a second batch photos.
Speaker Change: December.
Speaker Change: So firstly.
Speaker Change: <unk> two comes out from Q1 this year.
Speaker Change: We are in the ramp up stage.
Speaker Change: The major part of that comes out in Q2 and Q3.
Nangeng Zhang: Okay, thank you.
Operator: Thank you very much, gentlemen.
Speaker Change: Okay. Thank you. Thank you very much gentlemen.
Nangeng Zhang: I think, sorry, I think that your first question is about 816. Yes, right. Oh, sorry. Yeah, no, no. Okay.
Speaker Change: Sorry.
Speaker Change: First question is about <unk> 16.
Speaker Change: Yes.
Speaker Change: Oh, sorry.
Nangeng Zhang: Yeah, I was just wondering about the takeout and orders. Okay, basically, we will send the machines to our customer in Q, I think it's in Q3, so we will follow the risk run and our first mass production batch at that time. This is our schedule. Okay.
Speaker Change: Yes, no no. Okay. Yeah, I was just wondering about the tape out in orders.
Speaker Change: Okay.
Speaker Change: <unk>, we will withstand the machine.
Speaker Change: As to our customer in Q I think its in Q3.
Speaker Change: So we will follow the risk, Iran, and our first macro.
Speaker Change: Mass production batch.
Speaker Change: At that time.
Speaker Change: This is okay.
Okay.
Nangeng Zhang: Thanks, NG. Thank you. Have a nice day. Thank you.
Speaker Change: Thanks Angie.
Speaker Change: Thank you.
Jo Flynn: We'll now take our next question. This is from Jo Flynn from Compass Point Research and Trading. Please go ahead. Hi, thanks for the question. I was hoping if you could just touch on the ramp of A15 in a little more detail. I was curious how much of the initial capacity was ultimately covered by, you know, the North American Army. of Upfront Deposit. And is there any balance on those going forward? And then ultimately, how do you, what's ultimately the strategy of managing the liquidity risks given the six-month lead times? Um, you know what? approaches are you ultimately going to continue pursuing from that end?
Speaker Change: Thank you, we'll now take our next question please.
Speaker Change: This is from Joe Flynn from Compass point research and trading. Please go ahead.
Speaker Change: Hi, Thanks for the question I was hoping if you could just touch on the ramp.
Speaker Change: The team did a little more detail.
Speaker Change: Just curious how much of the initial capacity was ultimately covered by North Americans.
Speaker Change: Upfront deposits.
Speaker Change: And is there any balance on those.
Speaker Change: Going forward and then ultimately how do you what's ultimately the strategy of managing the liquidity risk given the six month lead times.
Speaker Change: And what.
Speaker Change: <unk>.
Speaker Change: You're ultimately going to continue pursuing from that end.
Nangeng Zhang: I think our A15 orders, we will, I think we can deliver most of them in May. in May, yes. Yes, they are pre-ordered. I'm sorry, I was talking about the upfront deposits from the North American customers as it relates to the security and fab capacity. I think that mostly it comes from North America, yes. and most of them is prepaid for about 50% down payment. Yeah, so then what's ultimately kind of the approach to funding the additional, you know, fab capacity six months out as they'll start to roll off? and given the kind of the risk of the lead time.
Speaker Change: I think our our <unk> and others.
Will.
Speaker Change: I think we can deliver most of them in may.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: <unk>, Oh, I'm, sorry, I was talking about.
Speaker Change: The upfront.
Speaker Change: Upfront deposits from the North American customers as it relates to those carry in fab capacity.
Speaker Change: I think the.
Speaker Change: Most of the years come.
Speaker Change: Comps from North America, Yes.
Speaker Change: And most of them is prepaid for about 50%.
Speaker Change: Yes.
Speaker Change: What's ultimately kind of the approach to funding the additional.
Speaker Change: That capacity is six months out.
Speaker Change: Let's start to roll off.
Speaker Change: Given this given the credit risk of the lead times.
Nangeng Zhang: Do you know, I think the production for the machines is about, I think today is about five months. But usually our customers cannot wait for like five months from the first payment to receive the machines. So usually we will keep our pipeline in about like three to four months.
Speaker Change: You will know.
Speaker Change: <unk> for the exchanges.
Speaker Change: It's.
Speaker Change: About I think that today is about five months.
Speaker Change: Or are you already our customers cannot wait.
Speaker Change: For like.
<unk> from the first.
Speaker Change: Payment to receive the machines.
Speaker Change: So Europe will keep our.
Speaker Change: Pipeline in about like us three to four months.
Nangeng Zhang: That means our customers will pay the first down payment, like 40, 45, 50 percent, and then pay the other 50 percent before we ship the machines or they receive the machines in three or four months. Thanks, that's helpful. Most of my questions were asked, but maybe they'll go in different directions.
Speaker Change: That means our customers.
Speaker Change: We pay the first down payment like.
Speaker Change: For Q4 at 550%.
Speaker Change: And then.
Speaker Change: Paid.
Speaker Change: The other 50%.
Speaker Change: Before we shipped machines or they received the machines.
Speaker Change: In three or four months, yes.
Speaker Change: Thanks, That's helpful. And then most of my questions were asked me to go a different direction.
Nangeng Zhang: Just curious if there was any portion of DRD still dedicated to the RISC-V ASICs, because you know, there's a lot of reports out there that expect to see huge increased demand in China, and I was wondering if there was anything came about of the, you know, partnership with Alibaba a few years ago, and if you guys ultimately have, you know, the opportunity to, you know, compete in that market at all. Um… Yeah, I think it's a very sensitive question. I think given the tightening of regulations environment, we observed recently, especially from Meet Daniel Ray What I can say is, we are staying very, very cautious about developing anything related to AI now.
Speaker Change: Just curious if there was any portion of the Rd still dedicated to the risk five asics because there's the quad reports out there that.
Speaker Change: Is that just the huge increase demand in China and I was wondering if anything came about.
Speaker Change: And our partnership with Alibaba, a few years ago.
Speaker Change: You guys ultimately.
Speaker Change: The opportunities.
Speaker Change: Two.
Speaker Change: Could be at that market at all.
Speaker Change: Okay.
Speaker Change:
Speaker Change: Yes.
Speaker Change: I think it's a very.
Speaker Change: Sensitive question.
Speaker Change: <unk>.
Speaker Change: I think given the.
Speaker Change: Titan the regulation environment.
Speaker Change: Sure.
Speaker Change: Zelle recently, especially from.
Speaker Change: Middle of January.
Speaker Change: What I can say is we are staying very very cultures about develop any spain related to AI now.
Nangeng Zhang: So yes, so that side, we are actively prepared for the future. Over the next two years, our plan is to invest more in building out our infrastructure in US, what I already mentioned tonight. This is our, I mean, personally, I think this is our way to hedging against the risk of. missing out the AI phase in the next maybe two or three years. If one day AI and HVC becomes the mainstream computing use case, replacing mining, we want to be ready with the power and science and all infrastructures and technologies there already in place, we would be in a very strong position to pivot quickly into the new direction.
Speaker Change: So.
Speaker Change: Yes, so that side, we are actively preparing for the future.
Speaker Change: Where is the next two years our plan is to invest more in building out our infrastructure.
Speaker Change: U S.
Speaker Change: What I already mentioned.
Speaker Change: Tonight.
Speaker Change: Our.
Speaker Change: Personally I think this is our way to hedging against as a risk.
Speaker Change: Missing out.
Speaker Change: The AI.
Speaker Change: Phase in the next maybe two to three years.
Speaker Change: If one day AI and HBC become becomes mainstream computing use case.
Speaker Change: Replacing mining.
Speaker Change: We want to be we want to be ready.
The power.
Speaker Change: <unk>, Oh infrastructure center, an outage there.
Speaker Change: We are already in place, we will be very strong very strong position.
Speaker Change: To peoples quickly into the new direction.
Nangeng Zhang: This is what I can say today.
Speaker Change: Great.
Speaker Change: I'd say today, yes. Thank you.
Operator: Great, thank you. Thank you.
Speaker Change: Great. Thank you.
Speaker Change: Thank you.
Bill Papanastasiou: We'll now take our next question. This is from the line of Bill Papanastasiou from KBW, please go ahead. Good morning, and thank you for taking my questions. NG, may you share some color on your progress of reaching self mining hashrate growth targets and how this may impact external sales of hardware? Can internal production of mining equipment sustain self-mining growth targets while also ramping your external sales to grow market share?
Speaker Change: We will now take our next question.
Speaker Change: This is from the line of Bill <unk>.
Speaker Change: <unk> from <unk>. Please go ahead.
Speaker Change: Good morning, and thank you for taking my questions.
Speaker Change: Maybe share some color on your progress of reaching self money hatch rate.
Speaker Change: Both targets and how this may impact external sales of hardware.
Speaker Change: Can internal production of mining equipment sustained self mining growth targets, while also ramping.
Speaker Change: Your external sales to grow market share. Thank you.
Speaker Change: Okay.
Nangeng Zhang: Uh, hi? Uh, hello? Um... Yeah, in the end of February this year, our company operations seven, we have we have a seven active mining partnership project. Globally, with a total deployed hash rate of more than 6x hash, and the power is close to 6x hash per second. And in Q1, we further expanded to existing North American mining projects through upgrades to increase their capacity. So we are keeping our target 10x hash in North America in the first half of this year. In the first quarter, I think our North American mining business will very close to 5x hash per second.
Speaker Change: Hi, Hello.
Speaker Change: Yes.
Speaker Change: At the end.
Speaker Change: February of this year.
Our company operations seven we have we have seven active mining.
Speaker Change: Partnership projects.
Speaker Change: Globally, we saw total deploy heartbeat.
Speaker Change: More than six ash and the power is close to 6%.
Speaker Change: Second.
Speaker Change: And.
Speaker Change: Q1.
Speaker Change: We further expanded to exist.
Speaker Change: <unk>.
<unk> north.
Speaker Change: North American mining projects through upgrades to increase there.
Speaker Change: So we we are keeping our targets.
Speaker Change: <unk> in North America.
Speaker Change: In the first half of this year.
Speaker Change: In the first quarter I think our.
Speaker Change: North American mining business, we are very close with buybacks cash for a second.
Nangeng Zhang: Yeah, because I think for currently the company's operation is very smoothly and we will build our That money follow our cash flow and keep our cash flow remain healthy. I think the U.S. government is implementing a series of politics supporting the cryptocurrency industry. The trend towards a Bitcoin bull market remains intact despite short-term price fluctuations. Since the advanced process capacity required by our industry must be deployed in advance, we have chosen using financing tools to fund raising to lock production capacity and fulfill our machine sales and self-mining. For how to expand our market share, You know, we are a non-subsidized Singapore company, alongside these two private Chinese companies.
Speaker Change: Yes, because I think for our company.
Company's operation is very small city.
Speaker Change: And we.
Speaker Change: We will build our.
Speaker Change: That money follow our cash flow.
Speaker Change: And keep our cash flows remain healthy.
Speaker Change: I think the U S government is implementing a series.
Speaker Change: Biotechs.
Speaker Change: <unk>.
Speaker Change: Currency industry.
Speaker Change: The trend.
Speaker Change: Talk a bit more basket remains.
Speaker Change: The impact before.
Speaker Change: Despite a short term price fluctuations.
She has advised process capacity required by our industry must be divided in advance.
Speaker Change: Tuesday, using financial tools to funding to follow for fundraising to lock production capacity.
Speaker Change: Alex we'll see our.
Speaker Change: But outside of that money.
Speaker Change: For the for how to expand our market share.
Speaker Change: We are.
Speaker Change: Stability, Singapore company.
Speaker Change: Alongside of these two priorities.
Speaker Change: Chinese companies.
Nangeng Zhang: Our market share is still small compared to our major main competitors. So for us, we have opportunities and we must focus on how to gain market share, then we can have much higher revenue. Historically, I think our major competitors have industry-leading products and early improvement advantages in North America. They expand their influence with global markets.
Speaker Change: Our market share is still small compared to our major.
Speaker Change: <unk>.
Speaker Change: So for us.
Speaker Change: We have opportunities and we must focus on how to gain market share that we can.
Speaker Change: We can have much higher revenue.
Speaker Change: Historically.
Speaker Change: I think our major competitors has.
Speaker Change: <unk> Street, leading products.
Speaker Change: And.
Speaker Change: Ali or advantages in North America.
Speaker Change: They spend their influenced this.
Speaker Change: Global.
Speaker Change: Chinese.
Operator: Participants, please do stand by while the speaker reconnects. Participants please continue to hold the line, we're just waiting for the speaker to rejoin. Please continue to stand by whilst we wait for the speaker to rejoin. Thank you.
Speaker Change: Participants please please standby while the speaker reconnect.
Speaker Change: Got disciplines. Please continue to hold the line with just waiting for the speaker to rejoin.
Speaker Change: Please continue to standby, whilst we wait for the speaker to rejoin thank you.
Operator: Hi, this is Liu Wang, Vice President of Capital Markets and Corporate Development. I think NG is offline because of technical difficulties. We are more than happy to take your questions after this.
Noah: Hi, This is Noah.
Noah: Vice President capital markets and thank you very much I think.
Speaker Change: <unk> is offline because of technical difficulties.
Speaker Change: We are more than happy to take your NAV.
Speaker Change: Questions. After this.
Okay.
Speaker Change: Okay.
Operator: I suggest we conclude this session. Thank you. In that case, I would turn the call back over to the company for any closing remarks. If there are no further closing remarks then we can conclude the call today. Thank you everyone for attending and you may now disconnect.
Speaker Change: As such as we conclude this session.
Speaker Change: Thank you.
Speaker Change: In that case, I would turn the call back over to the company for any closing remarks.
Speaker Change: Okay.
Speaker Change: Further closing remarks, then we can conclude the call today.
Speaker Change: Thank you everyone for attending and you may now disconnect.
Speaker Change: Okay.
Speaker Change:
Speaker Change: [music] okay.
Speaker Change: Yes.
Speaker Change: [music].