Intchains Group (ICG) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue surged 781.4% year-over-year to CNY 60.3 million ($8.6 million), with overseas revenue accounting for 66.2% of the total, driven by higher average selling prices of new ASIC chip products.

• Net income turned positive at CNY 3.2 million ($450,000), reversing a net loss of CNY 19.1 million in Q3 2023.

• Non-GAAP adjusted net income was CNY 19.1 million ($912,000), compared to a non-GAAP adjusted net loss of CNY 17.6 million a year ago.

• Sales volume of ASIC chips rose 26% year-over-year to 207,838 units, driven by demand for mining equipment for Kaspa, Alephium, Dogecoin, and Litecoin.

• The company launched Goldshell Pay, a blockchain payment solution, and plans to launch a hardware crypto wallet in Q4 2024.

Financial highlights

• Gross margin reached 67.7%, the highest since Q1 2023, due to higher margins on new ASIC chip products.

• Operating expenses rose 90.8% year-over-year to CNY 37.7 million ($5.4 million), mainly from cryptocurrency fair value losses and increased share-based compensation.

• Loss on fair value of cryptocurrency was CNY 13.1 million ($1.9 million), reflecting Ether's 24.2% price drop during the quarter.

• Basic and diluted EPS was CNY 0.03, compared to a loss of CNY 0.16 per share in Q3 2023.

• Cost of revenue increased 29.6% year-over-year to CNY 19.5 million, much lower than revenue growth, reflecting improved gross margins.

Outlook and guidance

• Plans to launch a hardware crypto wallet in Q4 2024 and commercialize new ASICs by Q1 2025.

• Expects further expansion of blockchain applications, building on Goldshell Pay.

• Expects Goldshell Pay and the hardware wallet to be in trial stage, with no material profit contribution in the near term.

• May consider financing strategies for further asset accumulation in the future.

• Management remains confident in the crypto industry's future, noting record-high market capitalization and ETH prices exceeding average cost of holdings.