Nano Labs Ltd (NA) Q2 2026 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to Nano Labs' First Half of 2026 Earnings Conference Call. [Operator Instructions] This conference is being recorded today, Friday, 28, 2026. Joining us today from Nano Labs are the company's Chairman and Chief Executive Officer, Mr. Jianping Kong and the company's Chief Financial Officer, Mr. Bing Chen. On our call today, Mr. Kong will give you an overview of the company's performance and Mr. Chen will share the details of the company's financial results. After that, we will conduct a question-and-answer session to take your questions. Before we continue, I would like to remind you that some information discussed on this call will contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended and as defined in the U.S. Private Securities Litigation Reform Act of 1995. Such statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the company's filings with the Securities and Exchange Commission. During today's call, Mr. Kong and Mr. Chen will deliver their remarks in Chinese, and the company's representative will provide corresponding English translations. With that, I will now turn the call over to Mr. Kong, the company's Chairman and Chief Executive Officer. Mr. Kong, please go ahead.

[Interpreted] Thank you, operator, and everyone, for joining Nano Labs first half of 2026 conference call today. For our call today, I will provide an overview of our recent development and our strategic initiatives going forward. In the first half of 2026 as the Web3 industry continued to mature, the global digital asset market underwent a profound structural evolution. Against this backdrop, we increasingly recognized the systematic opportunities arising from the integration of artificial intelligence and Web3. This convergency not only has the potential to reshape blockchain infrastructure but also to unlock new application scenarios and business model. Guided by this perspective, Nano Labs launched its next generation product, the iPollo ClawPC A1 Mini during the first half of the year and continuing to advance the development of open cloud ecosystem, spanning smart devices, operating systems, hardware, software and application layers. The company continues to implement its digital asset reserve strategy based on long-term assessment of the digital asset market and the broader blockchain ecosystem, management has formally incorporated digital assets into the company's capital allocation framework as a strategic component. As of the date of this income report, the company held the long-time results of 30,000 BNB. The company believes that a prudent and disciplined approach to digital asset allocation will not only have strengthened its balance sheet but also provide greater support for ecosystem collaboration and enhance flexibility for future strategic planning. Meanwhile, to further enhance shareholder value and demonstrate management's confidence in the company's long-term development, the company continues to advance its share repurchase program of up to USD 25 million, originally announced in October 2025. As of August 2026, the company had completed repurchase of Class A ordinary shares for a total consideration of USD 3.2 million, and we will continue to advance the program in steady and disciplined manner over the long term. Looking forward, Nano Labs will continue to explore opportunities arriving from the convergence of AI, Web3 and next-generation computing infrastructure through continuous technology innovation, deeper strategic partnerships and ecosystem development, the company aims to strengthen its technologic capabilities, expand its strategic footprint and create sustainable long-term value for shareholders. Thank you for your support and trust. Next, I will turn the call over to our Chief Financial Officer, Mr. Chen, for a closer view of our financial results. Mr. Chen, please go ahead.

[Interpreted] Thank you, Mr. Kong. Good morning, everyone. On behalf of the management team, I will provide a brief financial overview of the first half of 2026. In the first half of 2026, our net value was RMB 2.8 million, USD 0.4 million, compared to RMB 8.3 million in the same period last year. This decrease in net value was primarily due to the drop of sales volume of iPollo V-Series. We recorded a gross loss of RMB 5.8 million, USD 0.9 million for the first half of 2026 compared to RMB 10.7 million in the same period of 2025. Cost of revenue for the first half of fiscal year 2026 is RMB 8.6 million, USD 1.3 million compared to RMB 19 million in the same period of 2025. The decline was mainly due to the decrease in sales volume. Total operating expenses for the first half of fiscal year 2026 were RMB 285.8 million, USD 42 million compared to the total operating income of RMB 21.3 million for the same period of 2025. Selling and marketing expenses increased by 17% to RMB 3.1 million, USD 0.4 million from RMB 2.6 million for the same period of 2025. This increase was mainly due to the increase in sales and marketing expansion. General and administrative expenses increased by 29.5% to RMB 27.9 million, USD 4.1 million for the first half of 2026 from RMB 21.5 million for the same period of 2025. The increase in general and administrative expenses was primarily due to the increase in professional fees and real estate related taxes. Research and development expenses increased by 39.8% to RMB 4.4 million, USD 0.6 million for the first half of 2026 from RMB 3.2 million from the same period of 2025, the increase in research and development expenses was primarily due to the increase in service fees of system development. Change in fair value of cryptocurrencies was a loss of RMB 250.5 million, USD 36.8 million for the first half of 2026 compared to a gain of RMB 48.6 million for the same period of 2025. The increase in loss from change in fair value of cryptocurrencies was primarily due to the decreased BNB price during the first half of 2026. Loss from operations was RMB 291.7 million, USD 42.8 million for the first half of 2026 compared to a profit of RMB 10.6 million in the same period of 2025. Other expenses was RMB 18.3 million, USD 2.7 million for the first half of 2026 compared to -- for the same period of 2025. The change was mainly due to the loss from change in fair value of short-term investments during the first half of 2026. Net loss was RMB 316.7 million, USD 46.5 million for the first half of 2026 compared to RMB 11.8 million in the same period of 2025. Basic and diluted loss per share was RMB 13.65, USD 2 for the first half of 2026 compared with basic and diluted loss per share of RMB 0.43 for the same period of 2025. As of June 30, 2026, the company had cash and cash equivalents of RMB 9.0 million, USD 1.3 million compared to RMB 8.5 million as of December 31, 2025. We remain confident in our business strategy and ability to execute. We will continue to leverage the strength of our technology to capture development opportunities, drive long-term growth and create additional value for our shareholders. Now I would like to turn the call over to the operator for question-and-answer session..

[Operator Instructions] Your first question comes from [ Marina Robano ].

So my question is why has the company chosen to focus on AI-related business this year?

[Interpreted] Our expansion into AI is the result of a long-term strategic evaluation rather than a short-term market trend. Over the years, we have built solid capabilities in blockchain infrastructure, hardware development, ecosystem construction and product operations as AI and Web3 increasingly covered, we see significant opportunities to leverage this strength to develop next-generation intelligent products. The launch of the iPollo ClawPC A1 Mini represented the first step in this strategy. Beyond supporting the open cloud AI agent system, the product is designed for practical applications across entertainment, content creation and office productivity. Going forward, we will continue expanding both the hardware and software components of open cloud ecosystem to support for the AI adoption.

Your next question comes from Alfred Wu.

My question is, what are the company's future plans for its digital assets reserves?

[Interpreted] Digital assets have become an integral part of our long-term corporate strategy. We have designated BNB at our core strategic reserve asset based on our assessment of its ecosystem potential and long-term value. We intend to manage our reserve portfolio prudently by evaluating market conditions, liquidity needs and strategic priorities before making any additional investments. At the same time we will continue optimizing our overall digital asset allocation to enhance portfolio resilience while supporting future business development and ecosystem expansion.

Your next question comes from Olivia Bennett.

And my question is, what is the company's long-term business development strategy?

[Interpreted] Our long-term strategy is built on two complementary pillars. The first is maintaining a disciplined digital asset reserve strategy with BNB serving as a core strategic asset to support financial stability and long-term ecosystem development. The second is driving sustainable business growth through the integration of AI and Web3 technologies, leveraging the already deployed iPollo ClawPC A1 Mini as a starting point. We plan to continue expanding the open cloud ecosystem by introducing additional products, strengthening our software platform and exploring new commercial applications and business models. Together, these initiatives are intending to create a differentiated technology platform comparable of supporting our future growth.

The next question comes from Hannah Winslow.

And my question is what are the company's expectations for its operating performance in the second half of 2026?

[Interpreted] In the second half of 2026, we will remain focused on executing our strategy are prioritized, including advancing our digital asset initiatives and expanding our next-generation AI product ecosystem. As Mr. Kong has already discussed this initiative in detail, I will instead provide an update on our capital management efforts. The company launched its share repurchase program in December 2025. As of June 30, 2026, we had repurchased an aggregate of 1,117,401 shares and we intend to continue executing the program in accordance with its churn and prevailing market conditions. We believe the repurchase program reflects management's confidence in the company's long-term prospects. Going forward, we will continue strengthening our operating foundation, executing our strategy initiatives with discipline and creating sustainable value for our shareholders.

That does conclude our question-and-answer session. I'll now hand back for closing remarks.

[Interpreted] Thank you very much for joining the conference call. If you have any questions, please contact us through e-mail at ir@nano.cn or research our IR council, Ascent Investor Relations at tina.xiao@ascent-ir.com. Management will respond to your questions as soon as possible. We appreciate your interest and support in Nano Labs and look forward to speaking with you again next time.

Thank you for attending Nano Labs' First Half of 2026 Earnings Conference Call. This concludes our call today, and we thank you all for listening. Goodbye. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]