Prepared remarks
Good morning, and good evening, ladies and gentlemen. Thank you for standing by, and welcome to NIP Group Earnings Conference Call. Operator provided instructions at the start of the call. Please note that today's event is being recorded. I will now turn the conference over to your first speaker today, Mr. Ben Li, Chief Financial Officer 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 investor relations 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 three 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 two 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 three 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 to diversify monetization from pure live streaming toward brand integrations and product placements. The approach is 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 into a broader entertainment platform. Early results are encouraging. As an example, we successfully held the Qianfan Music Festival 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 gross margins than conventional esports events, they also create valuable sponsor touch points. We're scaling similar events in the second half with four to five similar festivals across key cities, one completed in Guangzhou and planned in Nanjing, Wuhan and Foshan. We're also building out a pipeline that includes traditional sports events and AR/VR activations in the future. Earlier this month, we signed a framework agreement with the Hainan government to jointly develop an integrated sports and leisure complex that will combine esports and 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, we are deepening our audience reach as we're serving the same digitally native community with more formats more often. Importantly, our brand also encompasses physical experiences. We're on track to open our first esports-themed hotel in China, an important proof point that our brand and audience can travel across formats from teams to 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 with a 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 recalibrated toward 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 two 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 two 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 newly 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. 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 two 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 employees, 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 four years. We're tracking well to trigger the first subsidy payment and are trending ahead of schedule on all KPIs. These two 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 detail. 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 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 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 one-time 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 one-time 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 zero tax environment should collectively enhance operating 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 priorities remain 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.
Questions and answers
Operator provided instructions for the question-and-answer session. And the first questions come from the line of Bo Pei from US Tiger Securities.
Okay. Great. I have two. 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 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 revenues 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 the 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 of 2024?
Indeed. The league revenue timing issue is mostly the reason as to why, as you noted, 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 in continued discussions with leagues. As soon as we have the letters, the revenue can be recognized, and then we will see normalized and improved performance. In terms of our competitive performance, it's definitely been increasing and improving across several different rosters, most notably in Counter-Strike very recently.
The next questions come from the line of Zhiyi Wu from Huayuan Securities.
Congratulations on the company's achievements. I have two questions. The first question is the first half 2025 results showed strong top-line growth, but wider losses driven by noncash impairments. How should we 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 appropriate that we adjusted these values to reflect realistic market conditions. If you look at the business in general and how you should think about it, think about it as what it is: a one-time 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 I touched on earlier; and particularly driven by uptick in performance and improved market 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 about 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 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-play miners?
Yes. So we have indeed moved extremely fast on the digital computing side and scaling digital assets. NIP as a group and a brand has been active in the digital asset space for a while, but the scaling of compute infrastructure of 11.3 exahash is quite an achievement, a remarkable milestone for us. We're now generating a lot of monthly Bitcoin output, which improves the economics of the group substantially. The primary reason we were able to scale so quickly is that we acquired already-built existing mining infrastructure, which resulted in a quick ramp-up speed of that compute capacity. We saw that in Tranche 1, and we expect to see that in Tranche 2. It also results in lower upfront CapEx investments and reduced cash flow needs. One of the big reasons we were able to scale computing capacity this fast is our strong government partnerships, in particular in Abu Dhabi, which provide long-term cost stability and operational support. The Emirates are very interested in the mining space, and they have a national vision to establish the country as a computing hub for these workloads and AI in the future. Regarding how we regard NIP versus a pure-play miner: we are obviously not a pure-play Bitcoin miner, and we see that as an advantage. Many miners will need to pivot their business models down the line. We come from a space with one of the most iconic brands in esports and broader gaming entertainment, which includes esports teams, live events, content networks, and reaches roughly 100 million fans. Given that reach, we have very valuable IPs that have been experimented with in the digital asset space. Look at our fan loyalty platform, the fan token which has been issued, and we've been experimenting with digital fashion and NFTs successfully. We see our audience base as early adopters. It's not just about acquiring large-scale computing power; it's natural to think that the growth journey will include AI compute. We look at broader digital assets and AI applications, which naturally connect to the millions of gaming fans we have. I hope that answers your question. I know it was a little bit long.
And the next 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 three questions here. The first, can you provide more details on the execution timeline 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 headquarters 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 expect to utilize even more of that 30% subsidy scheme. You can look at it as, as we scale, we are able to offset a substantial amount of our payroll costs through that, which improves our economics. In particular, in the esports space, it gives us a significant competitive advantage. The DCT side is rolling out well operationally. We're receiving subsidies and benefits, and as we scale we expect that to continue to grow and affect us positively. Regarding the Abu Dhabi Investment Office partnership, that is now activated, and that is a deal which provides $40 million over four 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, expanding other gaming entertainment properties and verticals, and adding mining — all of which will have significant positive effects on us for the long term. So generally, a very positive outcome from that avenue.
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. The impairment primarily relates to what has been happening in the esports industry over the last three years. When we did the merger between Ninjas in Pyjamas and the esports team, esports valuations were at their pinnacle and there was extreme market hype. Over the course of the years, we have seen a cooldown in the market and felt it was necessary and timely to adjust that value to reflect the true value of an esports team today. Back in 2022-2023, when we were conducting this merger, you saw esports team valuations reaching very high levels among our peers. With the broad esports market cooldown, it is natural to adjust historical merger valuations that were done in a market boom. Our job is to have our numbers reflect reality. That said, the charge is noncash. It does not impact our liquidity, cash flow or any of our operational plans. We took a large impairment this time and reset that base conservatively. Therefore, I do not foresee us having to take further impairments given the size of this adjustment. We will continue to scale the esports assets and properties. They're seeing recovery, and hopefully that will be a growth part rather than another catch-up when it comes to 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. Could you provide an update on the progress and expected timeline for closing?
Yes, absolutely. We announced it not long ago. The acquisition remains active and all parties are working together toward closing. When you do M&A of this size and scale, there are customary closing conditions. We're working to fulfill those as we did in Tranche 1. We will go ahead with the closing as soon as that is completed. At this stage, we are 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 high-performance computing frontier. It's exciting. I guess I have a couple of questions on the balance sheet as well as in the crypto strategy. But if I can, maybe circle back to the hotel esports strategy. Mario, can you just give me an update quick on kind of where that stands in terms of your priorities? And then 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. We're continuing to see massive growth in the esports hotel business in China, with lots of new hotels opening. Looking at operators right now, there are not that many that combine an incredible esports brand, an existing massive audience and the ability to host our own IP events as well as work closely with partners like Tencent. We will land into the top tier of those. Once our hotel opens in January and our business model is proven, we're going to aggressively expand using management and licensing models. We've already received a lot of interest from local governments, traditional hotel operators and real estate operators wanting us to expand into their assets. So overall, we're very hopeful and optimistic and excited about the strategy. In terms of priority, on a monetization level this remains a big priority for us because we see this as a constant stream of revenue and an opportunity for our esports community across the country to spend on experiences they like.
Yes. No, that's very helpful. Maybe just speaking of not getting too ahead of ourselves, you just made a major expansion effort here with the high-performance computing initiatives. But any other new frontiers you see to add to your list while you guys are at it? Maybe prediction markets have been getting a lot of attention. Any other new verticals while you guys are doing these other growth initiatives?
Yes, I'll quickly touch on the China side, and then Hicham will take the more visionary view. 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. At the same time, we are moving our real estate management company and plan to headquarter it also in Hainan this year. We've signed and announced a few deals achieving the operational rights of certain prime assets across different cities in China. This is an interesting growth frontier, alongside creating more music festivals and events where we're experiencing strong growth. With our recent festival in Beijing, I can confidently say that as a music festival operator we've become one of the most favored brands, and we are getting a lot of inbound requests from local governments and companies to host more in 2026. So I think these two frontiers will be very exciting together with the hotel business in China. Hicham?
Yes. I'll take a slightly more visionary approach to answer your question. When I joined NIP ten years ago, it was an esports team and we scaled it into one of the largest esports teams in the world. Then we diversified into wider gaming entertainment: talent management, events production, publishing, hotels. Now we're moving into infrastructure through acquisition of large-scale computing capacity. Number one, we are focused on making that more efficient; number two, we want to continue scaling that capacity. The approach is to build a full-circle ecosystem. It may seem unusual to go into Bitcoin mining, but it's a strong business vertical for finance and operations, and it's also a natural bridge to AI compute. Once you have the computing footprint, converting capacity to AI workloads is a natural evolution. Another element is that we remain rooted in gaming. There's a megatrend of AI, and relevant AI applications for esports and games can utilize compute capacity. You will see an ecosystem forming that spans esports and gaming entertainment, high-performance computing infrastructure, and AI compute and applications — always anchored in our brand DNA of esports and video games. We are not pivoting away from that DNA just because we have scaled mining. I hope that gives some clarity on our direction.
No, that was excellent. It covered a lot of ground. Maybe just two quick ones here to get a sense of Bitcoin progress since we are interim. I think I saw roughly $10 million of fiat cash on the balance sheet as of June. You closed Tranche 1 in September. I think we are targeting maybe 60 Bitcoin from that group of assets. We're in October and November. Have you mined any Bitcoin yet? And what is your strategy for that Bitcoin in the near term? Are you selling a portion for working capital or is the plan to hold it?
Yes. I touched on that in my prepared remarks. We closed the first tranche in September and have been mining since then. The business is outputting exactly in line with expectations. Over the last months we have been mining between 50 and 60 Bitcoins per month and accumulating that coin. As of the end of November, we held above 150 Bitcoins in our treasury. We are long-term believers in digital assets and Bitcoin and plan to hold. We will sell coins to cover operating expenses and capital needs when required, but our financing flexibility allows us to avoid forced monthly coin sales. So we expect to continue accumulating at the current production rate while managing sales opportunistically for liquidity needs.
Excellent. I appreciate that, and I apologize for missing that earlier. Good to know you have 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 investor relations 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.