- Total Computing Power Sold Rebounded to 4.2 Million Thash/s, up 126.8% QoQ -
Starting from
First Quarter 2023 Operating and Financial Highlights
Total computing power sold was 4.2 million Thash/s, as compared to 1.9 million Thash/s in the fourth quarter of 2022 and 4.3 million Thash/s in the same period of 2022.
Revenues were
Mining revenue was
Mr. Nangeng Zhang, Chairman and Chief Executive Officer of Canaan, commented, "The first quarter of 2023 was a challenging start. The uncertainties in the market have made our performance less than ideal. Despite these difficulties, we remain committed to our business strategy and confident in our long-term prospects. We continued to invest in our research and development and production capabilities to retain our competitive edge and prepare ourselves for future increases in customer demand. We also took this opportunity to enhance our sales system to reach more global customers and improve their level of satisfaction with our products. In addition, we remain committed to executing on the expansion of our mining strategy, particularly in regards to expanding our installed hash rate. Going forward, we also intend to continue to geographically diversify our mining operations across more countries. Moreover, we sustained a solid balance sheet to remain financially resilient. Now that we are in the second quarter, although the price of Bitcoin has not risen substantially, the Company's operational results are on a positive trajectory trend looking forward."
"In this brand-new industry, we are making history every day. Canaan is constantly developing the next-generation computing power that underpins the growing adoption of Bitcoin, the world's leading decentralized monetary system. We are grateful for our ability to contribute to this remarkable era of innovation and seek to employ our prowess in cutting-edge semiconductor design to benefit society,"
Mr.
"In spite of the current headwinds, I am confident that the Company is headed in the right direction. We have secured several large contract orders recently, enabling us to obtain increased cash flows from customer advances. In addition, as we endeavor to develop more mining collaborations, our installed hash rates are increasing, endowing us with a greater number of Bitcoins to hold on our balance sheet. These investments to secure both foundry capacity and mining farm resources will bolster our competitive position in the next Bitcoin price cycle,"
First Quarter 2023 Financial Results
Revenues in the first quarter of 2023 were
Products revenue in the first quarter of 2023 was
Mining revenue in the first quarter of 2023 was
Cost of revenues in the first quarter of 2023 was
Products costs in the first quarter of 2023 were
Mining costs in the first quarter of 2023 were
Gross loss in the first quarter of 2023 was
Total operating expenses in the first quarter of 2023 were
Research and development expenses in the first quarter of 2023 were
Sales and marketing expenses in the first quarter of 2023 were
General and administrative expenses in the first quarter of 2023 were
Impairment on cryptocurrency in the first quarter of 2023 was nil, compared to
Loss from operations in the first quarter of 2023 was
Non-GAAP loss from operations in the first quarter of 2023 was
Foreign exchange losses, net in the first quarter of 2023 were
Net loss in the first quarter of 2023 was
Non-GAAP adjusted net loss in the first quarter of 2023 was
Foreign currency translation adjustment, net of nil tax, in the first quarter of 2023 was a gain of
Basic and diluted net loss per American depositary share ("ADS") in the first quarter of 2023 were
As of
As of
Shares Outstanding
As of
Recent Developments
The At-the-Market ("ATM") Offering
On
From
The Company expects the ATM program to be a flexible mechanism for the Company to access public capital markets in the future. The timing and extent of the use of the ATM program will be at the discretion of the Company, provided that the Company has satisfied certain obligations set forth in the ATM agreements and the ATM facility is duly established.
The Mining Machine Purchase Agreement with Cipher Mining Inc.
On
Business Outlook
For the second quarter of 2023, the Company expects total revenues to be approximately
Conference Call Information
The Company's management team will hold a conference call at 8:00 A.M. U.
Event Title: Canaan Inc. First Quarter 2023 Earnings Conference Call
Registration Link: https://register.vevent.com/register/BIdaaba906f8b048cf8f589d21660a7a9b
All participants must use the link provided above to complete the online registration process in advance of the conference call. Upon registering, each participant will receive a set of participant dial-in numbers and a unique access PIN, which can be used to join the conference call.
A live and archived webcast of the conference call will be available at the Company's investor relations website at investor.canaan-creative.com.
About
Established in 2013,
Safe Harbor Statement
This announcement contains forward−looking statements. These statements are made under the "safe harbor" provisions of the
Use of Non-GAAP Financial Measures
In evaluating Canaan's business, the Company uses non-GAAP measures, such as adjusted income (loss) from operations and adjusted net income (loss), as supplemental measures to review and assess its operating performance. The Company defines adjusted income (loss) from operations as income (loss) from operations excluding share-based compensation expenses and change in fair value of warrant liability, and adjusted net income (loss) as net income (loss) excluding share-based compensation expenses and change in fair value of warrant liability. The Company believes that the non-GAAP financial measures provide useful information about the Company's results of operations, enhance the overall understanding of the Company's past performance and future prospects and allow for greater visibility with respect to key metrics used by the Company's management in its financial and operational decision-making.
The non-GAAP financial measures are not defined under
Investor Relations Contact
Ms.
Email: IR@canaan-creative.com
Tel: +1 (347) 396-3281
Email: canaan.ir@icrinc.com
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (all amounts in thousands, except share and per share data, or as otherwise noted) |
||
As of |
As of |
|
2022 |
2023 |
|
USD |
USD |
|
ASSETS |
||
Current assets: |
||
Cash and cash equivalents |
101,551 |
71,972 |
Inventories |
211,640 |
310,456 |
Prepayments and other current assets |
242,523 |
138,329 |
Total current assets |
555,714 |
520,757 |
Non-current assets: |
||
Cryptocurrency |
12,531 |
13,394 |
Property, equipment and software |
85,350 |
68,728 |
Right-of-use assets, net |
4,250 |
3,669 |
Deferred tax assets |
21,740 |
21,543 |
Other non-current assets |
2,504 |
2,699 |
Non-current financial investment |
2,872 |
2,910 |
Total non-current assets |
129,247 |
112,943 |
Total assets |
684,961 |
633,700 |
LIABILITIES, AND SHAREHOLDERS' EQUITY |
||
Current liabilities |
||
Accounts payable |
16,703 |
26,947 |
Contract liabilities |
662 |
8,251 |
Income tax payable |
7,228 |
7,323 |
Accrued liabilities and other current liabilities |
48,349 |
38,107 |
Lease liabilities, current |
2,314 |
2,359 |
Total current liabilities |
75,256 |
82,987 |
Non-current liabilities: |
||
Lease liabilities, non-current |
1,441 |
695 |
Other non-current liabilities |
598 |
1,895 |
Total liabilities |
77,295 |
85,577 |
Shareholders' equity: |
||
Ordinary shares ( 1,000,000,000,000 shares authorized, 2,804,138,492 and 2,820,686,147 shares issued, 2,496,001,757 and 2,526,208,472 shares outstanding as of 2022 and |
- |
- |
308,136,735 shares as of 294,477,675 shares as of |
(57,055) |
(57,055) |
Additional paid-in capital |
492,220 |
507,884 |
Statutory reserves |
14,892 |
14,892 |
Accumulated other comprehensive loss |
(36,913) |
(27,756) |
Retained earnings |
194,522 |
110,158 |
Total shareholders' equity |
607,666 |
548,123 |
Total liabilities and shareholders' equity |
684,961 |
633,700 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) (all amounts in thousands, except share and per share data, or as otherwise noted) |
|||
For the Three Months Ended |
|||
March 31, 2022 |
|
March 31, 2023 |
|
USD |
USD |
USD |
|
Revenues |
|||
Products revenue |
196,934 |
47,546 |
44,114 |
Mining revenue |
4,817 |
10,735 |
11,089 |
Other revenues |
21 |
33 |
29 |
Total revenues |
201,772 |
58,314 |
55,232 |
Cost of revenues |
(78,310) |
(122,454) |
(102,778) |
Gross profit (loss) |
123,462 |
(64,140) |
(47,546) |
Operating expenses: |
|||
Research and development expenses |
(15,172) |
(33,364) |
(19,058) |
Sales and marketing expenses |
(2,982) |
(1,145) |
(1,485) |
General and administrative expenses |
(19,825) |
(24,633) |
(17,577) |
Impairment on cryptocurrency |
(55) |
(1,678) |
- |
Total operating expenses |
(38,034) |
(60,820) |
(38,120) |
Income (loss) from operations |
85,428 |
(124,960) |
(85,666) |
Interest income |
483 |
1,141 |
440 |
Change in fair value of warrant liability |
(66) |
- |
- |
Foreign exchange gains (losses), net |
136 |
3,741 |
(2,559) |
Other income, net |
62 |
2,089 |
1,078 |
Income (loss) before income tax expenses |
86,043 |
(117,989) |
(86,707) |
Income tax benefit (expense) |
(20,949) |
26,380 |
2,341 |
Net income (loss) |
65,094 |
(91,609) |
(84,366) |
Foreign currency translation adjustment, net of nil tax |
6,576 |
8,654 |
9,158 |
Total comprehensive income (loss) |
71,670 |
(82,955) |
(75,208) |
Weighted average number of shares used in per share calculation: |
|||
— Basic |
2,580,294,054 |
2,515,312,493 |
2,502,558,388 |
— Diluted |
2,582,735,151 |
2,515,312,493 |
2,502,558,388 |
Net earnings (loss) per share (cent per share) |
|||
— Basic |
2.52 |
(3.64) |
(3.37) |
— Diluted |
2.52 |
(3.64) |
(3.37) |
Share-based compensation expenses were included in: |
|||
Cost of revenues |
- |
66 |
66 |
Research and development expenses |
3,092 |
2,217 |
2,324 |
Sales and marketing expenses |
327 |
662 |
(164) |
General and administrative expenses |
12,270 |
12,022 |
10,387 |
The table below sets forth a reconciliation of net income (loss) to non-GAAP adjusted net income (loss) for the period indicated: |
|||
For the Three Months Ended |
|||
|
|
|
|
USD |
USD |
USD |
|
Net income (loss) |
65,094 |
(91,609) |
(84,366) |
Share-based compensation expenses |
15,689 |
14,967 |
12,613 |
Change in fair value of warrant liability |
66 |
- |
- |
Non-GAAP adjusted net income (loss) |
80,849 |
(76,642) |
(71,753) |
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