NIP Group Inc. (NIPG) Q2 2025 Earnings Report, Transcript and Summary

Good morning, and good evening, ladies and gentlemen. Thank you for standing by, and welcome to NIP Group Earnings Conference Call. [Operator Instructions] Please note that today's event is being recorded. I will now turn the conference over to your first speaker today, Mr. Ben Li, CFO of the company. Please go ahead, sir.

Thank you. Hello, everyone, and welcome to NIP Group's First Half 2025 Earnings Call. With us today are our Chairman and Co-CEO, Mr. Mario Ho; and our Co-CEO, Mr. Hicham Chahine. You can refer to our first half financial results on our IR website. You can also access a replay of this call on our IR website when it becomes available a few hours after its conclusion. Before we continue, I'd like to refer you to our safe harbor statement in our earnings press release, which also applies to this call as we will be making forward-looking statements. Please note that all numbers stated in the following management's prepared remarks are in U.S. dollar terms, and we will discuss non-GAAP measures today, which are more thoroughly explained and reconciled to the most comparable measures reported in our earnings release and filings with the SEC. I will now turn the call over to our Chairman and Co-CEO, Mario. Mario, please go ahead.

Good morning, and good evening, everyone. Thanks for joining us. The first half of 2025 was a period of recalibration, rebuilding and disciplined execution for NIP Group. We focus on strengthening our foundational pillars while positioning the company for its next phase of growth under our new dual-engine model. Entertainment remains the core of our brand and community. Alongside it, we're building momentum in our newly established Mining and Digital Assets division, which represents our second growth engine and the bridge to our digital future. Let me start with our flagship entertainment business and the progress we've made here. Hicham will then take you through our strategy and progress with our Mining and Digital Asset division, the Abu Dhabi build-out and our forward outlook. Starting with Entertainment. Our esports, Talent and Events businesses remain the 3 pillars of how we engage audiences and monetize our entertainment assets. Total revenues for the first half of the year were USD 61.2 million, climbing 55.5% year-over-year. Total esports revenue were USD 3.8 million. In China, esports, first half softness reflected 2 industry dynamics: a general market normalization and the timing of revenue recognition, as some league confirmation letters were delayed to the second half. Amid this backdrop, we maintained a disciplined approach, streamlining operations and benefiting from a market-wide reset in player salaries for both China and Western esports. Top-tier talent today costs significantly less than 3 years ago, which is translating into healthier unit economics. In Western esports, we carried out a deliberate structural rebuild to sharpen competitiveness and commercial efficiency. While this transition temporarily impacted marginalization in the first half of 2025, it has paved the way for a return to normalization of revenues as we requalify for major events and reinstated digital items and league sharing income following a successful rebuild. This will also set a stronger base for future growth. As we move through the fourth quarter, we have strong visibility and expect Western esports to break even or make a slight profit on an adjusted EBITDA basis in the second half of 2025 with momentum expected to carry into the first half of 2026. Ninjas in Pyjamas' performance gains are also feeding commercial opportunities. Our sponsorship pipeline is improving, supported by renewals and new brand partners. Recurring contributions from existing relationships such as Rainbet, Sanex and Chili's are ongoing, and overall sponsorship discussions are significantly more active and constructive than earlier in the year. At the esports World Cup, NIP qualified in multiple disciplines, including Rocket League, Apex Legends, Street Fighter and Rainbow Six with 14 teams represented at events. This breadth reinforces our position as a multi-title organization. To further strengthen our operations, we recently appointed Grant Rousseau as Chief Operating Officer of NIPG esports. He is among the industry's most accomplished leaders, having led Team Falcon to back-to-back esport World Cup championships. His experience in scaling global esport organizations and developing sustainable competitive models will be an important asset for the movement. Turning to talent management. Total revenues for the first half were USD 46.1 million, surging 110.6% year-over-year. We undertook a purposeful recalibration here to improve both quality and efficiency. We've also integrated online advertising and promotion [indiscernible] diversified monetization from pure live streaming toward brand integrations and product placements. [indiscernible] straightforward: make this a lighter, higher-quality revenue stream that complements our broader entertainment ecosystem. Our events production business recorded revenues of USD 11.3 million, growing 30.1% year-over-year. Events production continues to evolve from pure esports tournaments [indiscernible] platform. Early results are encouraging. As an example, we successfully held the Qianfan Music [indiscernible] drawing more than 70,000 attendees and setting a high benchmark for crossover entertainment that connects deeply with our core Gen Z and young millennial esport audiences. Music festivals not only deliver stronger [indiscernible] margins than conventional esports events, they also create valuable sponsor touch points. We're scaling [indiscernible] in the second half with 4 to 5 similar festivals across key cities, one completed in Guangzhou, [indiscernible] Nanjing, Wuhan and Foshan. We're also building out a pipeline that includes traditional sports [indiscernible] AR/VR activations in the future. Earlier this month, we signed a framework agreement with the [indiscernible] Hainan to jointly develop an integrated sports and leisure complex that will combine esports [indiscernible] lifestyle experiences. This partnership underscores our commitment to bringing gaming and youth culture into broader tourism and entertainment formats, while contributing to local cultural economies. In conclusion, [indiscernible] audience as we're serving the same digitally native community with more formats more often. [indiscernible] our brand also encompasses physical experiences. We're on track to open our first esports themed hotel in [indiscernible] an important proof point that our brand and audience can travel across formats from teams [indiscernible] physical experiences. Operationally, all of the steps we've taken in the first half places us on a firm path towards profitability. We are maintaining strict cost discipline across teams and corporate functions [indiscernible] focus on operational efficiency across every part of the P&L. That operating rigor, together with improving esports' performance and the scaling of our Bitcoin mining initiative support our target of achieving positive adjusted EBITDA in the second half of 2025. Ben will walk through the financial details in just a moment. As we grow, we're also strengthening our corporate governance and sustainability practices. ESG is an integral part of how we build long-term value and culture. Earlier this year, we published our inaugural sustainability report, outlining our commitments and achievements in governance, diversity and community engagement. Women now represent nearly 48% of our workforce, well above the industry average. And our global teams completed over 5,500 hours of professional training. In summary, the first half of 2025 was about disciplined rebuilding and execution. In esports, China remained focused and efficient, while the West is showing tangible competitive and commercial recovery. Talent management was [indiscernible] more sustainable economics and events are expanding into music-like formats with better margins and wider brand reach. In parallel, we have established our Mining and Digital Asset division, which we view as a natural extension of our capabilities, anchored in compute capacity today and expanding toward digital assets, AI and AI-enabled applications over time. With that, I'll pass the call over to Hicham to walk through Mining and Digital Assets, our Abu Dhabi headquarters initiatives and incentives and the outlook for the remainder of the year into 2026. Hicham, over to you.

Thank you, Mario. Let me now turn to our Mining and Digital Assets division, which has become the second growth engine of NIP Group. This business embodies the next chapter of our transformation, combining near-term monetization through Bitcoin mining with long-term strategic positioning in digital infrastructure and AI computing. We began building this division with the September closing of the acquisition of our first tranche of mining assets, marking NIPG's entry into digital computing. The first tranche brought online an installed hash rate of approximately 3.11 exahash per second. In the past 2 months, we mined 102 Bitcoins, in line with our expectations. As of November 30, 2025, we held over 150 Bitcoins in Bitcoin treasury, supported by our strong production and disciplined liquidity management. Building on that success, we announced a second tranche asset purchase agreement, or Tranche 2, to significantly expand our total mining capacity. Tranche 2 is expected to close in December. Once completed, it will add an additional 11.19 exahash of on-rack mining capacity to our operations, bringing our total installed mining capacity to 11.3 exahash per second. This will position NIPG as one of the top listed Bitcoin miners globally and the largest miner in the Middle East. Based on our current Bitcoin network conditions and installed hash rate of 11.3 exahashes and a relatively stable utilization rate defined as a ratio of average operating hash rate to total installed hash rate, these 2 tranches combined are expected to generate roughly 150 Bitcoins per month, providing a meaningful cash flow visibility and establishing mining as a strong contemporary revenue stream within our broader portfolio. Operationally, we are following a balanced approach to liquidity and asset management. Our plan is to sell a portion of our mined Bitcoin to cover liquidity needs, operational costs and capital expenditures while retaining the remainder on our balance sheet as digital assets. Crucially, unlike many traditional miners, our financing structures provide the flexibility to cover operating costs without forced monthly coin sales. This strategic advantage allows us to act as long-term Bitcoin holders and sell Bitcoin opportunistically when market conditions are most attractive, enabling the strategic growth of our Bitcoin treasury. We intend to remain long-term holders of Bitcoin, reflecting our confidence in its long-term value creation potential. To lead this next phase of growth, we appointed Carl Agren as Chief Operating Officer of Mining and Digital Assets at NIP. Carl brings exceptional experience spanning both blockchain infrastructure and AI data centers. Most recently, he served as the CEO of Phoenix Technology, one of the leading blockchain infrastructure operators globally, managing over 700 megawatts of power capacity across the U.S., Canada, Europe and the Middle East. He led Phoenix Group's IPO in December 2023, raising approximately USD 370 million and oversaw roughly 400 megawatts of crypto mining operations. Before joining Phoenix, Carl co-founded and served as Chief Operating Officer of G42 Cloud, now Core42, which is the largest AI, Big Data and cloud computing company in the Middle East, where he led development of 100 megawatts of data center capacity dedicated to AI and high-end performance computing workloads. Carl will be based in Abu Dhabi, operating from our new established headquarters under the ADIO partnership. As we scale, our immediate focus remains on efficiency, uptimes and site upgrades, specifically. Refining the power mix and site infrastructure is also a priority. To date, operational metrics have been in line with plan, and we expect to announce monthly Bitcoin production figures following the close of Tranche 2 and our Digital Assets acquisition. Let me now touch on our Abu Dhabi headquarters and the ADIO incentive framework. We currently benefit from 2 separate partnership programs in Abu Dhabi. The first with Abu Dhabi Gaming and the Department of Culture and Tourism. This one has been running for about 1.5 years. Under this framework, we received 30% subsidies for payroll for UAE-based employee, along with office subsidies dispersed quarterly and uncapped. These benefits continue to support our operating base and will remain in addition to other incentive programs. Separately, we entered into a new agreement with the Abu Dhabi Investment Office earlier this year, which provides up to $40 million in financial incentives over 4 years. We're tracking well to trigger the first subsidy payment and are trending ahead of schedule on all KPIs. These 2 programs together create a highly supportive environment for NIP Group's long-term expansion in Abu Dhabi, reinforcing the Emirates commitment to building a global hub for computing, AI, digital infrastructure, which is a vision that aligns closely with ours. As we continue to expand, this structure not only enhances our financial efficiencies, but also anchors NIP Group at the center of Abu Dhabi's rapidly growing digital economy under a world-class government and regulatory framework. Turning to our outlook for the remainder of the year and into 2026. The second half of 2025 will represent the first reporting period where we begin to see operational and financial contributions from the Mining business. Together with continued efficiency gains from the Entertainment division, this positions us firmly on track to achieve adjusted EBITDA in the second half of 2025, which is positive. With Tranche 2 scheduled to close in December, we're entering 2026 with a new fully operational revenue stream, coupled with enhanced revenue visibility. At current Bitcoin price levels, our installed mining capacity has the potential to generate approximately $200 million in annualized revenue. When combined with over $100 million in anticipated annual revenues from our entertainment businesses, NIP Group's total annualized revenue run rate is expected to exceed USD 300 million based on current Bitcoin mining network conditions, prevailing Bitcoin prices and assuming NIP Group's share of network hash rate and its utilization remain relatively stable. Looking further ahead, 2026 will be about optimization and stability. NIP Group is now the only gaming and entertainment company globally that has successfully scaled into Bitcoin mining and compute infrastructure from a native audience base. This gives us a differentiated position, combining cultural relevance and computing ability, which we believe is a durable competitive advantage as the digital and physical worlds continue to converge. Our approach is infrastructure first and execution led. We are building real capacity, achieving tangible outputs and laying the technological groundwork for broader digital assets and AI opportunities ahead. With that, I will hand it over to Ben to take you through the first half financials in details. Thank you.

Thank you, Hicham, and hello, everyone. I'm pleased to share our financial results for the first half of 2025. Total revenue for the first half was USD 61.2 million, up 55.5% year-over-year. Growth was led by talent management revenue, which increased by 110.6% year-over-year and event production, which increased by 30.1% year-over-year. Esports team operations contributed revenue of USD 3.8 million. In addition to fewer sponsorships, the decline in esports team in operation revenue was also due to timing effects. Unlike the first half of 2024, first half 2025 results did not include league revenue share. This year's full year share is expected to be recognized in the second half of 2025. Overall, the first half revenue performance reflects the effectiveness of our diversification strategy and the continued evolution of our entertainment portfolio towards higher quality, more scalable revenue streams. Turning to gross profit and gross margin. We recorded a gross loss of USD 1.2 million with gross margin of minus 2% versus 6% in the period -- prior year period. The year-over-year change was driven by the absence of the league revenue share in the first half of 2025 and softer high-margin sponsorships in esports, partially offset by a more favorable mix in talent management and events. At the segment level, esports posted a gross loss given the previously mentioned timing effect. Talent management gross margins improved to minus 1.1% from minus 5.9% last year. And events production delivered a 9.2% gross margin. Now let's talk about impairment, a standout expense that had a meaningful impact on our bottom line. During the period, we recorded noncash goodwill impairment of USD 106.3 million and intangible asset impairment of USD 19.5 million, primarily associated with the Ninjas in Pyjamas brand. These impairments reflect a prudent reassessment of fair value based on updated market multiples and performance assumptions, in line with industry-wide normalization. These are onetime noncash adjustments that have no impact on our operating cash flow and are not expected to recur in the second half of 2025. Net loss for the first half of 2025 was USD 136.3 million compared with USD 4.7 million a year ago, almost entirely driven by the impairment adjustment. Excluding these onetime items, adjusted EBITDA was negative USD 7.1 million compared with negative USD 2.6 million last year, primarily reflecting our ongoing investments in business transformation and digital infrastructure build-out as well as the lack of league revenue share in the first half of 2025. Looking ahead to the second half of 2025 into 2026, with the successful scaling of our Bitcoin mining machine acquisitions and the Entertainment division achieving greater stability, we expect a meaningful sequential improvement in profitability in the second half of 2025. The combination of growing recurring revenues from entertainment and incremental revenues from mining alongside a 30% payroll subsidy under the AD Gaming and DCT framework, the ADIO financial incentives and 0 tax environment should collectively enhance operation leverage and improve cash flow in the coming quarters. Therefore, we also target positive adjusted EBITDA for the second half of 2025. Finally, I want to reaffirm that our financial discipline remains unchanged. We are executing against our dual-engine strategy with a clear focus on profitability and the sustainability of scalable long-term growth. Our balance sheet remains solid and will be supported by growing transaction in Bitcoin mining. Our cost structure is leaner and our capital allocation prioritizes remains centered on efficient growth and long-term shareholder value creation. Okay. This concludes our prepared remarks for today. Operator, we are now ready to take questions. Thank you.

[Operator Instructions] And the first questions come from the line of Bo Pei from US Tiger Securities.

Okay. Great. I have 2. So the first is event production revenues grew strongly in the first half this year as you scale into music and broader live entertainment. The Wonderland Festival was a major milestone. So my question is how replicable is this model geographically and financially? And what does your pipeline look like for the second half of this year and 2026? And how should we think about the margins over time?

Thank you so much. This is Mario. Yes, indeed, it was a fantastic milestone for us with over 70,000 attendees that is in itself qualifies us into the top-tier music festival operators in China. So I think the case study in Beijing already validated our ability to execute these large-scale multi-format live entertainment events, including music beyond esports. And to answer your question, the model, I think, is highly replicable in both China and also some selected international markets where we have strong esports and huge audience overlap. As mentioned earlier in the call, we've already established another one in Guangzhou, another one in Nanjing, and we look to have around 10 more of these across next year on a big scale level. But at the same time, we're also looking to sign more music concerts aside from music festivals. And as you think about pipeline and also margins over time, we definitely expect with more of these large-scale music festivals, our margins in the events production business overall will continue to improve healthily.

Awesome. That's very helpful. And then my second question is about the esports team. So the revenue have been under pressure due to softer sponsorships and timing of league revenue recognition. So where do you stand today in terms of the competitive performance sponsorship pipeline and profitability for esports segment? And should we expect a recovery in the second half and into 2026? Also, what was the amount of league revenue share recorded in the first half 2024?

Indeed. The league revenue timing issue is mostly the reason as to why, as you claim, we have been under pressure. But I do expect the league revenue confirmation letters to normalize, as we head into the second half of 2025. This is a very normal process and the continued discussion relationship with leagues. As soon as we have the letters, the revenue can be recognized, then we will see normalized and improved performance. And in terms of our competitive performance, it's definitely been increasing and improving across several different rosters, most notably in Counter-Strike very much recently. Thank you.

The next questions come from the line of [ Zhiyi Wu ] from [ Huayuan ] Securities.

Congratulations on our company's positive achievements. I have 2 questions. The first question is the first half 2025 results showed strong top line growth, but wider losses driven by noncash impairments. How we should think about the trajectory into the second half of 2025 and your path to positive adjusted EBITDA?

Thank you so much for the question. I'll take this one. We need to keep in mind that the reported loss that we did was primarily driven by noncash impairments, which does not affect our operating cash flow or business fundamentals at all. In general, we took these impairments because historically, we did our merger creating NIP Group. And since then, the valuations of esports team assets have, in general, come down in line with the cooling market. So we felt that it was timely and appropriately that we adjusted these values to reflect realistic market conditions, I would say. If you look at the business in general and how you should think about it, think about it as what it is, a onetime noncash impairment. In general, the underlying operational metrics of the business are positive and improving with stronger contribution margins to our bottom line. And we do expect continued revenue momentum and cost efficiency improvements in the second half of 2025 and beyond, as Mario has touched on; and particularly driven by uptick in performance and improved market and interest surrounding the esports assets themselves. I think that what makes us very excited is now when we look at 2026 and have added mining and digital computing, we are extremely excited of the potential in revenue generation, but also the P&L impact that will have on us from the second half of 2025. And with the additional added compute capacity, 2026 looks extremely promising and exciting. I hope that answered your question.

That's very helpful. My second question is you have moved very quickly in building out your Mining and Digital Assets division. How should investors think about economics and your differentiation versus pure player miners?

Yes. So we have indeed moved extremely fast on the digital computing side and scaling digital assets. Now NIP as a group and a brand has been doing things in the digital asset space for a while, right? But the scaling of compute infrastructure of 11.3 EH is quite an achievement, a remarkable milestone for us, right? We're now generating a lot of monthly Bitcoin output, which improves the economics of the group substantially. The reason primarily that we were able to scale it so quickly is that we acquired already built an existing mining infrastructure, which resulted in a quick ramp-up speed of that compute capacity, right? We saw that in Tranche 1, we will see that in Tranche 2. And it also results in lower upfront CapEx investments and needed cash flow for that. And I think one of the big reasons that we were able to scale computing capacity this fast is our strong government partnerships, in particular in Abu Dhabi, which provides us long-term cost stability and operational support. And in particular, since they are extremely interested in the mining space, they've been present in it for a long period of time, and they have it as a national vision to establish the Emirates as a computing hub when it comes to both these types of workloads, but also AI in the future. And how do we regard NIP, which is the second part of your question? We are obviously not a pure-play Bitcoin miner, and we are very happy that we are, given that down the line, a lot of Bitcoin miners will have to look to pivot their business models. We already came from a space where we have one of the most legendary iconic brands in esports and broader gaming entertainment, right, which includes esports teams, live events, content networks, which in general, reaches 100 million fans. And now back to what I said initially, given that we reach 100 million fans, we have very valuable and solid IPs, which has been experimental in the place of digital assets, right? Look at our fan loyalty platform; look at the fan token, which has been issued in the plus we've been playing around the digital fashion. We have been doing NFTs very successfully. We do see that the audience base that we do have now is your target adapters and primary adapters on what we are doing in the digital compute space. [indiscernible] just coming from [indiscernible] acquiring large-scale computing power, it is naturally to think that, that growth journey [indiscernible] we're seeing it AI compute, we look at broader digital assets and we also look at the AI application space, which naturally connects to these millions and hundreds of millions of gaming fans that we do have. I hope that answers your question. I know it was a little bit long.

And the questions come from the line of Marco Zhang from Gelonghui Research.

This is Marco from Gelonghui Research. Congrats again on your strong results and your successful transformation. So I have 3 questions here. The first, can you provide more details on the execution time line for your Abu Dhabi headquarters build-out and how the AD Gaming and ADIO programs will impact your P&L over the next few years?

Yes. No, absolutely. In general, we're tracking and trending very well with the various Abu Dhabi collaborations that we do have. Our headquarter build is progressing on schedule. We have senior leadership like myself, Carl Agren and other C-level staff already relocated and in Abu Dhabi. If you look at the DCT collaboration, that has been running for 1.5 years. We're already utilizing and realizing the benefits of the 30% payroll subsidy, the office subsidies and so on. So that is already affecting us in a positive way. Now that we are building out digital computing as well in Abu Dhabi, we are looking to be able to utilize even more out of that 30% subsidy scheme. So you can look at it as, as we scale, we are able to offset quite a substantial amount of our payroll costs into that, which improves our advantages. And in particular, in the esports space, it gives us a significant competitive advantage. So that is sort of on the DCT side rolling out quite well, operational. We're receiving all the subsidies and benefits, and we're looking as we scale of that continuing to grow and affect us extremely positive. When you look at the Abu Dhabi investment office partnership, that is now activated, and that is a deal which is $40 million contributed over a time period of 4 years. We are trending ahead of schedule to trigger the KPIs. As I said, the HQ is already established, it's operational and we look at it now as we're scaling esports, we're scaling other gaming entertainment properties and verticals that we have and also by adding mining, that will have significant positive effects on us for the long term. So in generally, a very good positive news coming out of that avenue, I would say.

Okay. My second question is related to your impairments. So you recorded a sizable goodwill and intangible asset impairments in the first half related to Ninjas in Pyjamas. Could you elaborate on the rationale behind this impairment? And should investors expect further similar charges going forward?

Yes, absolutely. So the impairment primarily relates to what has been happening in the esports industry over the last 3 years. When we did the merger between Ninjas in Pyjamas and the esports team and ESV 5, I would say that esports valuations were at their pinnacle. There was an extreme market hype. And I think that we, over the course of the years, have seen a cool down surrounding that and felt it was necessary and timely to adjust that value to reflect the true value as it is today of an esports team, right? We -- back in 2022-2023, when we were conducting this merger, you saw esports team valuation going as far up as USD 0.5 billion amongst our peers, right? And we can all safely say that when you have a broad esports market cool down, that historical merger valuation which was done in a market boom, it is natural to adjust that down. And also our job is to have our numbers reflect what is reality, right? So in that sense, that was timely to do so. Just we need to keep in mind the charge is noncash. It does not impact our liquidity, cash flow or any of our operational plans. And in general, we have taken a large impairment this time and reset that base quite conservatively. So there is no further impairment pressure. And I do not foresee us having to take any further impairment given that we took a very sizely one now. And we will continue to do our jobs, scale the esports assets and properties. They're seeing recovery. And hopefully, that will be a growth part rather than a catch-up part when it comes to goodwill valuations.

Yes. That's good to hear. Then my last question is regarding your Mining business. So you previously announced the additional asset purchase agreements to further expand your Bitcoin mining capacity. So could you provide an update on the progress and expected time line for closing?

Yes, absolutely. So we announced it not long ago. The acquisition remains active and all parties in it are working closing together towards closing. As you -- when you do M&A of this size and the scale, there is customary closing conditions. We're all working to fulfill those similarly to what we had to do in Tranche 1. And we will go ahead with the closing as soon as that is completed. And at this stage, I would say that we are still targeting December to close it, and we will inform the market as soon as that is closed as well. So I hope that answered that question.

And the next questions come from the line of Jack Vander Aarde from Maxim Group.

Okay. Great. Congrats on all the progress in the new HPC frontier. It's exciting. I guess, I have a couple of questions kind of on the balance sheet as well as in the crypto kind of just bigger picture plans here and kind of what has happened so far. But if I can just maybe get into -- maybe circling back to the hotel, esports hotel strategy. Mario, can you just give me an update quick on kind of where that stands in terms of your priorities? And then just bigger picture, how does that fit into the overall strategy? Or has that taken a back seat?

Yes, this is Mario. No, we're very excited about our opening potentially in January. And we're still continuing to see massive growth in the esports hotel business in China, lots of new hotels opening. But of course, looking at the operators right now, are there that many that composes an incredible esports brand and existing massive audience and also the ability to host our own IP events as well as working closely with our partners like Tencent? The answer to that, I think, is there aren't that many operators, and we will land into the top tier of those. Once our [indiscernible] open in January, our business model is proven, we're going to aggressively expand in the management model and the licensing model. We've already received a lot of interest from local governments and a lot of traditional hotel operators and also real estate operators wanting for us to expand into their assets. So overall, we're very hopeful and optimistic and excited about the strategy. In terms of priority, I think on a monetization level in the world of esports, this remains a big priority for us because we see this as a constant stream of revenue and opportunity for our esport lovers across the country to be able to spend on the things that they like. I hope that answers your question. Thank you.

Yes. No, that's very helpful. And maybe just speaking of -- not to get too ahead of ourselves, you just made a major expansion effort here as well with the HPC initiatives. But just other ideas that maybe would fit in well with your business strategy, you guys have been acquisitive. Do you see any other, I guess, new frontiers as well to add to your list while you guys are at it? Maybe the predictions market is something that's been getting a lot of attention here out in the West. Just anything -- any other new verticals as well while you guys are doing all these other growth initiatives?

Yes, I'll quickly touch on it on the China side, and then Hicham, you want to take this? So I guess another exciting part would be our collaboration with the Hainan government. We're looking to build a sports entertainment complex in the city of Sanya. And at the same time, we are moving our real estate management company, which we [indiscernible] this year to be headquartered also in Hainan. We've signed and announced a few different deals -- sorry, achieving the operational rights of certain prime assets across different cities in China. So I think this is also an interesting growth frontier from the China side, whilst we, of course, take a big focus on creating more music festivals and events that you've seen already in our data earlier where we're experiencing fantastic growth. And also with our recent festival in Beijing, I can confidently say that as a music festival operator, we've already now become one of the most favored brands. We are getting a lot of inbound requests from different local governments and companies to be hosting more in 2026. So I think these 2 frontiers will be very exciting together with the hotel business here in China. Hicham?

Yes. I think I will take a little bit more of a visionary approach to answering your question, Jack, if that is okay. And hopefully, that can provide a little bit of clarity on how we think about things. So obviously, when I joined NIP 10 years ago, it was an esports team, right? We quickly scaled that into one of the largest, if not the largest, esports team in the world. And then we set our sight on diversifying business into wider gaming entertainment, right? So talent management, events production, the publishing aspects, hotels. And now we're moving into the infrastructure side, right, through acquisition of large-scale computing capacity, right? So number one, we're looking to make that more efficient; and number two, we're looking to continue scaling that capacity. right? And sort of the approach in this is if you look at going from esports to wider gaming entertainment, looking to now jumping into high-performance computing, what we are doing is building a full circle ecosystem. So it might sound a little bit weird that we go into Bitcoin mining. Yes, it's great as a business vertical, it's great for our financials and scaling and growth, but it would be realistic to think about that once you are in the computing space, it is natural to look at things such as AI computing and converting existing mining sites or new sites to AI compute, that is something. Another element to that is we're in the gaming space. There's a megatrend of AI, and in particular, what would be interested for us to look into and which is on the horizon is AI applications, which is relevant to esports and games, right? And utilizing a potential compute capacity that we're sitting on to run such AI applications. So you will start seeing it forming into an ecosystem, which spans esports into gaming entertainment, high-performance computing infrastructure, which then spans into AI and AI compute. But you will see it sort of always being anchored in the brand DNA, which is esports and its video games. We are not pivoting away from that brand DNA just because we went into mining at the scale becoming one of the largest in the world. I hope that answered it on more of a visionary note on which type of direction we're taking.

No, that was excellent. It covered a lot of ground there, too. I appreciate. And maybe just 2 quick ones here just to get a sense of the Bitcoin progress since we are kind of interim here. So I think I saw USD 10 million roughly of fiat cash on the balance sheet as of June -- at the end of June. And you did acquire those assets, those Bitcoin in the first tranche in September. So I think we are targeting maybe 60 Bitcoin from that group of assets. We're in October and November. Have you guys mined any Bitcoin yet? And are you also -- what is the strategy of kind of -- what are you doing with that Bitcoin in the near term? Are you selling a portion of it for working capital or is the plan to hold it?

Yes. So I touched on that in my prepared remarks. So we closed the first tranche in September. We have been mining since September and generally accumulating coin, right? The business is outputting exactly on expectations. So through the last months, we have been mining between 50 and 60 Bitcoins per month. We have been accumulating all that coin. So as of the end of November, we were sitting on above 150 in Bitcoin in our treasury. Now as I said in my written remarks is we are long-term believers in digital assets and Bitcoin and are looking to hold. So you might see and will see that what we sell is to cover operating expenses when needed. But in general, we will follow the thread that we have been doing this year, right, 50 to 60 coins a month. Three months in, there's about 150 coins sitting in our treasury, so we expect that to be sort of the approach we're taking as long-term holders.

Excellent. I appreciate that, and I apologize for missing that. I thought you were just doing 150 per month once you had the other tranche closed as well. But good to know you have quite a healthy number of Bitcoin already. That's it for me. Congrats, guys.

Thank you.

It's fun checking our wallet, I will tell you that.

As there are no further questions, I'd like to hand back the call over to the management for closing remarks.

Okay. Thank you again for joining our call today. If you have any further questions, please feel free to contact us or make a request through our IR website. We look forward to speaking with everyone on our next call. Have a good day.

This concludes the conference call. You may now disconnect your lines. Thank you.