Canaan, a producer of legendary ASICs series Avalonminer and one of the largest corporate Bitcoin (BTC) miners, shared its unaudited Q2, 2023, report. Despite the amazing performance of all key metrics, the firm is still grappling with a challenging market context and, therefore, has failed to achieve the break-even point.
Canaan's BTC mining revenue more than doubled compared to Q2, 2022
In Q2, 2023, Canaan Inc. sold 6.1 million Thash/s in Bitcoin (BTC) mining power, which represents a 44.2% QoQ increase. Its own mining revenue totaled $15.9 million, demonstrating a 105% increased compared to a similar period in 2022, says its official Q2, 2023, report released today.
Canaan Inc. Reports Unaudited Second Quarter 2023 Financial Results#Canaan #Mining #Bitcoin
— Canaan Inc. (@canaanio) August 29, 2023
Learn more: https://t.co/Mg01dyC1SX pic.twitter.com/HuVLnHC7Zi
At the same time, the cost of revenues increased rapidly. In the last quarter, it reached $143.9 million, compared to $102.8 million in the first quarter of 2023 and $107.6 million in the same period of 2022. As a result, the company sees its gross losses increasing.
In Q2, 2023, Canaan bore $70.1 million in losses, which is equal to almost 48% QoQ increase. To provide context, a year ago, it logged a gross profit of $138.3 million.
Mr. Nangeng Zhang, chairman and chief executive officer at Canaan, stressed that the company finds its way through a rather challenging environment heavily affected by regulatory hostility:
Admittedly, we are still facing a market that has yet to recover with soft purchasing power on the demand front, generating continued pressure on our sales. Recently, we also encountered adverse impacts from regional regulatory changes and a particular partner's breach of agreement in respect of our mining operations. However, our unwavering faith in bitcoin’s potential remains steadfast.
The company also disclosed the structure of its incomes. Selling BTC miners remains the top focus for the company: net revenues consisted of $57.9 million in product revenue and only $15.9 million in mining revenue from owned farms.
Canaan is leaving Kazakhstan, here's why
James Jin Cheng, chief financial officer at Canaan, is optimistic about the results his company accomplished in the recent three months:
In the second quarter of 2023, we observed improvement in both our sales and mining activities, which contributed to our better-than-expected revenue performance. Despite a decrease in average selling price, our product sales grew by 31.3% quarter over quarter, driven by increases in total computing power sold.
In August 2023, Canaan unveiled that it was forced to abandon two Exahash/s of its mining computing power in Kazakhstan. The firm explained it with the regulatory crackdown.
Kazakhstan-based mining facilities were responsible for 50% of Canaan's hashrate in Central Asia and North America.
Vladislav SopovAs covered by U.Today previously, the Central Asian country started to tighten the electricity distribution rules for Bitcoin (BTC) miners in December 2022.
Alex Dovbnya
Arman Shirinyan
Yuri Molchan
