The9 reported net income of $32.4 million for the quarter ended June 30, up from $22.6 million in the first quarter. But the numbers tell a strange story: operating revenue was only $712,000, and the company booked a $13.4 million operating loss. The profit came almost entirely from crypto tokens, not from any underlying business.
Where the money actually came from
The9 recognized a $47.2 million fair-value gain on its 9BIT tokens and an additional $11.1 million in cryptocurrency rewards, together totaling $58.3 million. That sum alone exceeded the quarter's net income. Token-related income rose from $37.6 million in Q1 to $58.3 million in Q2, while the operating loss narrowed by less than $1 million. All of these gains were booked outside operating revenue and generated no cash for the company's operations.
Management incentive clause triggered
The higher net income satisfied a Q2 growth condition in a long-term management incentive plan. As a result, senior management now qualifies for equity awards representing up to 12% of The9's outstanding shares. The awards are subject to multi-year vesting and a three-year lock-up. Future quarters must each exceed the Q1 baseline to meet their own conditions under the plan.
Token holdings and market reality
On June 30, The9 carried 1.9 billion 9BIT tokens at a value of $96.6 million. As of Aug 24, the company said its total crypto holdings were worth about $120 million, including 347 Bitcoin and the same 1.9 billion 9BIT tokens. But The9 warned that this value might not reflect what it could actually get if it sold. 9BIT trades on BingX, MEXC, and KuCoin, with roughly $5.7 million in 24-hour volume across those three markets on Aug 25. The token's circulating supply is unreported, which makes the fair-value calculation a bit of a black box.
