Intchains Group (ICG) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached CNY 60.3 million (US$8.6 million), up 781.4% year-over-year, driven by higher average selling prices of new ASIC chip products and strong overseas sales, which accounted for 66.2% of total revenue.

• Sales volume of ASIC chips rose 25.9% year-over-year to 207,838 units, all for blockchain computing equipment.

• Gross margin hit 67.7%, the highest since Q1 2023, due to new high-margin ASIC products.

• Net income turned positive at CNY 3.2 million (US$0.5 million), reversing a net loss from the prior year; non-GAAP adjusted net income was CNY 19.1 million (US$0.9 million).

• Strategic focus remains on Ether accumulation, with holdings reaching 4,149 Ether as of September 30, 2024, up 71.7% from June 30.

Financial highlights

• Gross profit for Q3 2024 was CNY 40.8 million, up from a gross loss in Q3 2023.

• Operating expenses rose 90.8% year-over-year to CNY 37.7 million (US$5.4 million), mainly due to cryptocurrency fair value loss and share-based incentives.

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

• Interest income declined 8.9% to CNY 4.2 million, attributed to lower cash levels from ETH acquisitions.

• Other income, net, nearly doubled to CNY 2.6 million, driven by increased government grants and investment gains.

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.

• Will maintain Ether accumulation strategy regardless of crypto market cycles.

• Focus on product and project innovation and fostering blockchain adoption.

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