Canaan Misses Q2 Revenue Guidance Amid Weak Bitcoin Mining Economics

Canaan Inc., a China-based technology company specializing in high-performance computing hardware for the digital currency and blockchain industry, reported its second-quarter earnings. The company's revenue fell short of expectations, coming in at around $32 million, below the previously guided range of $35 million to $45 million.

Chairman and CEO Nangeng Zhang attributed the decline in revenue to weaker Bitcoin mining economics, cautious customer spending, and elevated industry inventory levels, which put pressure on equipment sales and pricing. He also mentioned that tighter mining-related policies in China and elsewhere, geopolitical conflicts, and an increased focus among U.S. capital markets and traditional miners on artificial intelligence and high-performance computing contributed to the decline.

Despite the revenue miss, Canaan's mining operations accounted for a majority of its revenue, with $18 million generated from mining activities. The company mined 243 Bitcoin during the period, with an average selling price of $5.50 per terahash per second. Excluding depreciation, Canaan's mining gross margin was 20%.

Canaan also reported a cash balance of $66 million at the end of the quarter, up from $43 million in the previous quarter. The company used part of its proceeds from selling digital assets to repurchase American depositary shares (ADSs). It has repurchased about 16.4 million ADSs for total consideration of $7.4 million under its existing $30 million authorization.

Canaan is confident it can secure gigawatt-scale power resources by the end of 2026 and plans to evaluate potential mining, high-performance computing, and AI-related applications. The company will also continue to pursue compute-to-heat applications and prepare new Avalon Home consumer products for mass production in the third quarter.