- Total Computing Power Sold Achieved 6.1 Million Thash/s, up 45.2% QoQ -
- Bitcoin Mining Revenues Reached
Second Quarter 2023 Operating and Financial Highlights
Total computing power sold was 6.1 million Thash/s, representing an increase of 44.2% from 4.2 million Thash/s in the first quarter of 2023 and an increase of 11.7% from 5.5 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, "We navigated the challenges in the second quarter of 2023, surpassing our topline guidance to achieve
"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. We will intensify our sales efforts to secure a more significant market share, enhance our product offerings to achieve peak performance, and propel our mining operations to accumulate valuable bitcoin assets. All of these efforts are geared towards strengthening our presence and generating value for our shareholders in the long run."
Mr.
"Above all, we recognize the severe emerging challenges that may impede our business operations. These challenges encompass regulatory shifts across countries, counterparty risks within this evolving market, and the broader economic landscape's unpredictability as well as unforeseen events that may pressure the bitcoin price. As we navigate the market, we remain committed to cautious investments in securing advanced wafer supply as well as research and development for product performance enhancement. In light of market headwinds, we will continue to focus on generating cash inflows with prudent expense management to ensure operational continuity and position us for future opportunities."
Second Quarter 2023 Financial Results
Revenues in the second quarter of 2023 were
Products revenue in the second quarter of 2023 was
Mining revenue in the second quarter of 2023 was
Cost of revenues in the second quarter of 2023 was
Products costs in the second quarter of 2023 were
Mining costs in the second quarter of 2023 were
Gross loss in the second quarter of 2023 was
Total operating expenses in the second quarter of 2023 were
Research and development expenses in the second quarter of 2023 were
Sales and marketing expenses in the second quarter of 2023 were
General and administrative expenses in the second quarter of 2023 were
Impairment on cryptocurrency in the second quarter of 2023 was
Loss from operations in the second quarter of 2023 was
Non-GAAP loss from operations in the second quarter of 2023 was
Foreign exchange gains, net in the second quarter of 2023 were
Net loss in the second quarter of 2023 was
Non-GAAP adjusted net loss in the second quarter of 2023 was
Foreign currency translation adjustment, net of nil tax, in the second quarter of 2023 was a loss of
Basic and diluted net loss per American depositary share ("ADS") in the second quarter of 2023 were
As of
As of
Accounts receivable, net as of
Shares Outstanding
As of
Recent Developments
Kazakhstan Regulatory Changes for Cryptocurrency Mining
In
However, the Company must wait for one of its local partners to obtain its Type I license for mining infrastructure possessors before the Company can complete its license application. This local partner has applied for a license, but its application remains pending. The Company anticipates a continued suspension of its mining operations in
The Company and its local mining partners are actively pursuing the necessary licenses, while exploring avenues to sustain its collaboration with local miners by adjusting the present cooperation arrangements to align with the local regulations.
Dispute Relating to Joint Mining Activities in the
On
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.
Business Outlook
For the third 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. Second Quarter 2023 Earnings Conference Call
Registration Link: https://register.vevent.com/register/BI5f3485f660e14d70a2886332ea9eba6a
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 |
66,138 |
Accounts receivable, net |
- |
10,098 |
Inventories |
211,640 |
272,139 |
Prepayments and other current assets |
242,523 |
83,448 |
Total current assets |
555,714 |
431,823 |
Non-current assets: |
||
Cryptocurrency |
12,531 |
28,765 |
Property, equipment and software |
85,350 |
50,485 |
Right-of-use assets, net |
4,250 |
2,896 |
Deferred tax assets |
21,740 |
19,959 |
Other non-current assets |
2,504 |
1,753 |
Non-current financial investment |
2,872 |
2,768 |
Total non-current assets |
129,247 |
106,626 |
Total assets |
684,961 |
538,449 |
LIABILITIES, AND SHAREHOLDERS' EQUITY |
||
Current liabilities |
||
Accounts payable |
16,703 |
27,335 |
Contract liabilities |
662 |
8,318 |
Income tax payable |
7,228 |
3,533 |
Accrued liabilities and other current liabilities |
48,349 |
69,008 |
Lease liabilities, current |
2,314 |
1,901 |
Total current liabilities |
75,256 |
110,095 |
Non-current liabilities: |
||
Lease liabilities, non-current |
1,441 |
514 |
Other non-current liabilities |
598 |
1,701 |
Total liabilities |
77,295 |
112,310 |
Shareholders' equity: |
||
Ordinary shares ( |
- |
- |
|
(57,055) |
(57,055) |
Additional paid-in capital |
492,220 |
520,088 |
Statutory reserves |
14,892 |
14,892 |
Accumulated other comprehensive loss |
(36,913) |
(51,273) |
Retained earnings (accumulated deficit) |
194,522 |
(513) |
Total shareholders' equity |
607,666 |
426,139 |
Total liabilities and shareholders' equity |
684,961 |
538,449 |
|
|||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) |
|||
(all amounts in thousands of USD, except share and per share data, or as otherwise noted) |
|||
For the Three Months Ended |
|||
June 30, 2022 |
March 31, 2023 |
June 30, 2023 |
|
USD |
USD |
USD |
|
Revenues |
|||
Products revenue |
238,122 |
44,114 |
57,940 |
Mining revenue |
7,751 |
11,089 |
15,896 |
Other revenues |
22 |
29 |
17 |
Total revenues |
245,895 |
55,232 |
73,853 |
Cost of revenues |
(107,564) |
(102,778) |
(143,928) |
Gross profit (loss) |
138,331 |
(47,546) |
(70,075) |
Operating expenses: |
|||
Research and development expenses |
(15,577) |
(19,058) |
(17,857) |
Sales and marketing expenses |
(3,174) |
(1,485) |
(2,437) |
General and administrative expenses |
(22,133) |
(17,577) |
(26,369) |
Impairment on cryptocurrency |
(4,467) |
- |
(2,363) |
Total operating expenses |
(45,351) |
(38,120) |
(49,026) |
Income (loss) from operations |
92,980 |
(85,666) |
(119,101) |
Interest income |
309 |
440 |
226 |
Change in fair value of warrant liability |
3,861 |
- |
- |
Foreign exchange gains (losses), net |
17,001 |
(2,559) |
2,574 |
Other income, net |
889 |
1,078 |
176 |
Income (loss) before income tax expenses |
115,040 |
(86,707) |
(116,125) |
Income tax (expense) benefit |
(24,948) |
2,341 |
5,456 |
Net income (loss) |
90,092 |
(84,366) |
(110,669) |
Foreign currency translation adjustment, net of |
(25,610) |
9,158 |
(23,518) |
Total comprehensive income (loss) |
64,482 |
(75,208) |
(134,187) |
Weighted average number of shares used in |
|||
— Basic |
2,584,644,729 |
2,502,558,388 |
2,547,999,846 |
— Diluted |
2,585,684,866 |
2,502,558,388 |
2,547,999,846 |
Net earnings (loss) per share (cent per share) |
|||
— Basic |
3.49 |
(3.37) |
(4.34) |
— Diluted |
3.48 |
(3.37) |
(4.34) |
Share-based compensation expenses were included in: |
|||
Cost of revenues |
16 |
66 |
60 |
Research and development expenses |
2,715 |
2,324 |
2,452 |
Sales and marketing expenses |
684 |
(164) |
233 |
General and administrative expenses |
12,742 |
10,387 |
8,323 |
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) |
90,092 |
(84,366) |
(110,669) |
Share-based compensation expenses |
16,157 |
12,613 |
11,068 |
Change in fair value of warrant liability |
(3,861) |
- |
- |
Non-GAAP adjusted net income (loss) |
102,388 |
(71,753) |
(99,601) |
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