Canaan Revenue Doubles, Shares Jump 21%

Key Takeaways

• Canaan reported a significant surge in third-quarter revenue, nearly doubling year-over-year to $150.5 million, driven by high demand for mining equipment.
• Sales to North American clients were a strong contributor, accounting for 31% of total revenue, indicating a robust recovery in that market.
• Despite a challenging year for some miners pivoting to AI, Canaan’s CEO emphasized the continued viability and profitability of Bitcoin mining.
• Canaan’s stock saw a substantial increase following the earnings report, reflecting positive investor sentiment.

Canaan’s Q3 Revenue Soars Amidst High Equipment Demand

Canaan experienced a notable surge in its share price on Tuesday. This uplift followed the Bitcoin mining hardware manufacturer’s announcement of a substantial increase in third-quarter revenues, which effectively doubled compared to the previous year. The company attributed this growth to a robust demand for mining equipment, mirroring a trend where several other mining entities also reported heightened revenues.

In its third-quarter report, Canaan stated that its total revenues climbed by an impressive 104% year-over-year, reaching $150.5 million. This significant growth was fueled by a substantial volume of new orders, with a considerable portion, $118.6 million, originating from its mining equipment sales.

James Jin Cheng, Canaan’s Chief Financial Officer, highlighted during the company’s earnings call that a large volume of sales originated from clients in the United States. He noted that these American clients started actively placing sizable and repeating orders, underscoring the market’s positive reception to their offerings.

📍 Cheng further elaborated, Sales of North American customers contributed 31% of our total revenue in quarter three. We are happy to witness the strong demand recovery of the North American market.

Market Performance and Broader Industry Trends

The positive performance of Canaan is occurring within a broader context of strong earnings reports from other players in the mining sector. For instance, HIVE Digital reported a remarkable 285% increase in earnings on Monday. Similarly, BitFuFu saw its third-quarter revenue double, driven by the demand for both cloud mining services and equipment, as miners sought to capitalize on the rising price of Bitcoin.

Canaan Shares See Significant Gains Following Earnings Announcement

Following the release of its earnings report on Tuesday, Canaan’s shares (CAN) closed the trading day with a gain of nearly 21%, reaching $1.03. The positive momentum continued after market hours, with an additional increase of almost 2% to $1.05.

Despite the recent surge, Canaan’s stock has experienced a decline of nearly 50% year-to-date. This performance reflects a broader industry trend where many Bitcoin miners have shifted their focus towards powering artificial intelligence (AI) operations. This pivot is partly due to increased costs and difficulty in mining, coupled with fluctuations in Bitcoin’s price.

The company’s Q3 report also indicated that its mining revenue reached $30 million, marking a 241% increase year-over-year. However, it reported a net loss of $27 million, an improvement from the $75 million loss recorded in the same quarter last year.

📊 Canaan mined 267 Bitcoin (BTC) during the third quarter, achieving an average revenue of $114,485 per coin. By the end of October, the company’s Bitcoin holdings had increased to 1,610 BTC.

CEO Advocates for Bitcoin Mining’s Continued Viability

Nangeng Zhang, CEO of Canaan, addressed investors during an earnings call, acknowledging that some mining companies facing financial pressures and stock performance challenges are indeed transitioning towards AI. However, he maintained that Bitcoin mining remains a highly viable option, especially during this transitional phase, given the time required for AI infrastructure deployment.

“Our customers, including ourselves, are thinking about how to build AI-ready mining facilities for the future,” Zhang stated. “At this stage, deploying more Bitcoin miners is still the best way to allocate energy today and generate revenues from this date, not waiting for another one or two or three years.”