Intchains Gr (NASDAQ:ICG) reported second-quarter financial results on Thursday. The transcript from the company's second-quarter earnings call has been provided below.

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Summary

Intchains Gr reported a revenue of 11.1 million RMB for the first half of 2026 with operating expenses of 42 million RMB, resulting in a net loss per share of 1.22 RMB.

The company has completed the tape-out of its next-generation mining ASIC, targeting a commercial launch in Q4 2026, expected to contribute to revenue in H2 2026 and significantly in 2027.

Intchains Gr is focusing on cost optimization, achieving 23.1 million RMB in labor cost savings through restructuring and AI tools, and has announced a $15 million share repurchase program.

The company is exploring growth opportunities in AI to diversify revenue streams and reduce reliance on cryptocurrency market cycles.

Management expressed confidence in the strategic direction, expecting a more diversified and resilient business, while maintaining a prudent ETH treasury and capital allocation strategy.

Full Transcript

Prilla, Operator

Thank you for standing by. My name is Prilla and I will be your conference operator today. At this time, I would like to welcome everyone to the Intchains Gr first half 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad.

If you would like to withdraw your question, please press star one again. Thank you. I would now like to turn the conference over to Alice Zhang with The Equity Group. Please go ahead.

Alice Zhang, The Equity Group (Investor Relations)

Thank you, Operator. Good evening to everyone. Welcome to Intchains Gr’s first half 2026 earnings conference call. Please be advised that the discussions on today’s call will include forward-looking statements. These statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections regarding future events that may impact its financial condition, operating results, and strategic direction.

Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from those anticipated results. Investors should review other factors that may affect its future results in the Company’s registration statement and other filings with the SEC. The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances or changes in its expectations, except as required by law.

Please refer to reconciliation of non-GAAP measures to comparable GAAP measures in the earnings press release. The webcast replay of this conference call will be available on the Intchains Gr website at www.ir.inchance.com. It is my pleasure to introduce Intchains Gr CFO Mr. Charles Yan, who will provide an overview of first half 2026 financial results and the Company’s business strategy and focus for the remainder of the year before opening the floor for questions.

Charles, please go ahead.

Chaowei, Charles Yan — Chief Financial Officer

Thank you, Alice, and welcome everyone. Let me start with a quick look at our first half 2026 results. The period reflected continued cyclical softness in altcoin demand, which was also impacted by the PRC mining machine sales restrictions announced in February. Revenue was 11.1 million RMB and the total operating expenses were 42 million RMB, with a basic and diluted net loss per ordinary share of 1.22 RMB. We ended the period with 461 million RMB in cash and cash equivalents, deposits and government securities, a balance sheet that has allowed us to fund our next generation chip program entirely from internal resources.

Now turning to the remainder of 2026, our progress on new product development and where we are taking the business from here. We entered this cycle with a deliberate choice to keep funding our next generation mining ASIC development through a weaker demand environment so that we’d be ready with new products when the market turns, and that decision is now paying off. In July we successfully completed the tape-out of our new next generation mining ASIC, a major technical milestone that keeps us on track for commercial launch in Q4 2026.

This chip is architected specifically to optimize performance, balancing efficiency, reliability and supply availability using a mature process, and is designed to improve unit economics and returns on invested capital for retail and professional miners. The successful tape-out transitions the ASIC project from design completion to the start of the manufacturing process and sets the stage for silicon validation followed by mass production and official commercial launch.

With the capital and R&D intensive phase of this ASIC chip development now complete, the Company has initiated engineering sample production and laboratory validation, including performance, reliability and thermal testing against internal benchmarks. Subject to successful validation, Intchains Gr expects to commence initial production ramp and system-level integration in advance of a planned commercial launch targeted for Q4. Once launched through the sales of our Gotio Miner series, we believe it will broaden our addressable market across retail and professional miners, enhance the competitiveness of our hardware portfolio and unlock new revenue streams through future system and service offerings. Looking into the second half, we believe we are moving quickly to capture the opportunities ahead. Our new mining ASIC is expected to begin contributing modest revenue in H2 2026, building a far more meaningful impact in fiscal 2027 as commercialization accelerates. Longer term, we believe that this platform further strengthens our position as a leading active supplier of purpose-built mining ASIC systems, driving superior operational efficiency for our customers and advancing a more sustainable proof-of-work infrastructure.

It’s a core part of our strategy to build a more resilient, diversified revenue base. Beyond this new project, we are also in the early stages of evaluating new growth opportunities in artificial intelligence, including potential acquisitions that would extend our core competencies in custom ASIC design and hardware systems integration into AI-enabled computing applications. Our goal is to reduce reliance on cryptocurrency market cycles over time and to position Intchains Gr in a higher value computing market adjacent to our existing hardware expertise.

This work is still in early stages and we look forward to share more details as our plans develop. On the cost side, we continued to make progress on our cost optimization efforts. As of June 30, 2026, we had realized approximately 23.1 million RMB in annualized labor cost savings through our organizational restructuring, the divestiture of our non-core chip-related business, and the expanded use of AI-enabled tools across our business operations.

We expect to continue these cost discipline initiatives throughout the remainder of the year. On our ETH treasury holdings: As of June 30, 2026, the fair value of our cryptocurrency assets, excluding stablecoins such as USDC and USDT, was 98.9 million RMB, including approximately 9,176 ETH. As of August 20, 2026, the Company’s total units of ETH staked were 4,556, with 3,556 ETH deposited through our GoldShield staking platform pending validation activation and 1,000 ETH staked on FalconX platform.

Going forward, we expect to maintain a prudent ETH treasury and staking position, preserving our existing treasury holdings and continuing to generate staking yields while prioritizing capital allocation toward our Next Generation ASIC Program and the new AI initiatives over additional ETH accumulation. We also announced today that our Board of Directors has approved a share repurchase program under which we may repurchase up to $15 million of our ADS over the next two years, funded from our existing cash balance.

We believe that this program reflects our confidence in Intchains Gr’s long-term strategic direction and our commitment to creating value for shareholders, and it’s consistent with our disciplined approach to capital allocation, balancing returns to shareholders with continued investment in our next generation ASIC and new AI initiatives. Looking ahead to second half of 2026, while we expect continued market headwinds, we remain focused on disciplined execution, commercializing our new ASIC, prioritizing cost optimization and advancing our evaluation of AI-related growth opportunities.

We believe these initiatives will position Intchains Gr for a more diversified and resilient business over the long term. With that, Operator, let’s open it up for questions.

Prilla, Operator

Thank you. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. Your first question comes from the line of Mark Palmer with Stonex. Please go ahead.

Mark Palmer, Analyst at Stonex

Yes, hello, good evening and thank you for taking my question. You announced the new share repurchase program and also discussed ongoing R&D activities as well as the potential for M&A, especially focused on AI and AI-driven businesses. Can you talk a bit about what your capital allocation priorities are and, more broadly, what your capital allocation strategy looks like going forward? Thank you.

Chaowei, Charles Yan — Chief Financial Officer

Thank you, Mark. Thank you for your question. And firstly, for the share repurchase program, we planned $15 million for the share repurchase program. And for the R&D, our R&D in current ASIC, we will handle this as usual. We will do the tape-out and buy the inventory and then sell them. So the capital cost of the current business will remain the same with our prior projects. And finally for the AI initiatives and M&A, it will depend on the project we engage.

Currently we have several projects to assess and every project has different capital requirements. So currently, for the AI part we cannot give accurate estimation. Thank you.

Mark Palmer, Analyst at Stonex

Yes, and follow-up question please. Charles, you made reference to the fact that you’re anticipating that there will be a pickup in the impact from the newly developed ASIC product in 2027. Can you talk a bit about how you’re currently thinking about 2027, particularly with regard to the diversification of revenue that you made reference to, reducing reliance on crypto cycles? And also, what should we be watching for over the next few quarters in terms of milestones or signs of your progress?

Thank you.

Chaowei, Charles Yan — Chief Financial Officer

Yes. Firstly, our next milestone of the product is the product launch. It will be happening in Q4 2026 and it will contribute some revenue for the second half, but it will not be very big. But for 2027, the whole product will be—the whole mass production will be on track. So in 2027 our expectation is the revenue will be better than the last cycle—last cycle, I mean maybe 2025 and 2024. So this is our business basic. And in addition, for other revenue base, we will continue to stake ETH and it will contribute meaningful revenue compared with this year and last year.

And finally, the AI initiatives—if it has some meaningful progress—it will also contribute additional revenue. I think in current stage, I think we cannot estimate the current figure of that part, but I believe 2027 will be a good year or the best year among five years of the Company. Yeah, thank you.

Mark Palmer, Analyst at Stonex

Thanks very much.

Prilla, Operator

And your next question comes from the line of Matthew Galinko with Maxim Group. Please go ahead.

Matthew Galinko, Analyst at Maxim Group

Hey, thanks for taking my questions. Maybe firstly, given the environment we’ve been in for crypto, can you discuss any changes you’re seeing in competition in the ASIC design business?

Chaowei, Charles Yan — Chief Financial Officer

Yeah, currently what I can say now is that our new next generation ASIC, the foundation of this new cryptocurrency is very good, and the competition of this new cryptocurrency is not intense. We may not be the first one to enter into that area but we believe that our product has a leading performance among all competitors. And I think we are very confident on this new ASIC or new mining machine for this new coin and for 2027. And on the other hand, I think the crypto environment currently has some soft demand issues, and now I think for the second half and next year the market will recover, and together with our business and our revenue and the ETH price. Yeah, this is all our Company. This is all our Company’s business. Yes, thank you.

Matthew Galinko, Analyst at Maxim Group

Great. And I guess as a follow-up to drill a little bit more into the capital allocation decisions, how do you view your ETH treasury holdings with respect to other investment opportunities, including M&A, additional ASIC development? If you see opportunities, are treasury holdings potentially convertible into, you know, cash for M&A or other initiatives if, you know, it suits? Or do you, you know, intend to, you know, hold that as a fixed asset and not really consider it as part of any kind of spend?

Thank you.

Chaowei, Charles Yan — Chief Financial Officer

Yeah. Yes, I think we will not sell ETH, firstly. But we are using our own fund to buy ETH. So if we do not generate operating cash, it’s difficult for us to pay more money on it. So our current strategy is to sell mining machines and obtain profit and use that profit to buy the ETH. So for the capital allocation, we will not fully use current cash to buy ETH. But this is our current strategy. I cannot ensure if we will change in the future. But currently we are using this strategy.

Our current cash is used in R&D, mining machine sales, current business, and AI initiatives. Thank you.

Matthew Galinko, Analyst at Maxim Group

Thank you. And maybe last question for me. In addition to the new machine that you’re rolling out in Q4 and you expect to contribute to ’27, do you expect any—you know, if we get a recovery in the crypto market—do you expect to have decent contribution from other products in your portfolio? Or do you think that ’27 is going to be just predominantly driven by the new launch?

Chaowei, Charles Yan — Chief Financial Officer

I think if the—currently, the cryptocurrency is in the bear market. So if the market does not recover, I think our main product is this new product. Our main revenue will be contributed by this new product. But if the market recovers—the other price, the Dogecoin price, the Aleo coin price recovery—then we will have another contribution from these prior product lines because we have finished the tape-out, so it’s very quick for us to order more wafer from our fab.

Matthew Galinko, Analyst at Maxim Group

Thank you. Great.

Chaowei, Charles Yan — Chief Financial Officer

Thank you. Thank you.

Prilla, Operator

And I’m showing no further questions at this time. I would like to turn it back to Charles Yan for closing remarks.

Chaowei, Charles Yan — Chief Financial Officer

Yeah. Thanks again to all of you for joining us. We are always open to a dialogue with investors. Please feel free to reach out to us or to our investor relations firm, The Equity Group, for any additional questions. We look forward to speaking with you all again on our next call. Thank you.

Prilla, Operator

Ladies and gentlemen, this concludes today’s conference call. Thank you all for joining. You may now disconnect.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.