BEIJING,
Third Quarter 2022 Operating and Financial Highlights
Total computing power sold was 3.5 million Thash/s, representing a decrease of 37.1% from 5.5 million Thash/s in the second quarter of 2022 and a decrease of 48.5% from 6.7 million Thash/s in the same period of 2021.
Revenues were
Gross profit was
Net income was
Non-GAAP adjusted net income was
Mr. Nangeng Zhang, Chairman and Chief Executive Officer of Canaan, commented, "The bitcoin mining market deteriorated during the third quarter, as the bitcoin price fluctuated and further dipped to around
"Looking forward, we face a very tough industry period as the bitcoin price is sinking to lows the market has not seen in two years. Our priority is to conserve our cash, minimize our expenses, and endure this market downturn. Without any interest-bearing debt, we will also remain prudent as we invest in key strategic areas such as research and development and wafer production capacity on advanced nodes. We believe these efforts will position us to expand our market share and capture the opportunities that are set to emerge when the market recovers,"
Mr.
Third Quarter 2022 Financial Results
Revenues in the third quarter of 2022 were
Products revenue in the third quarter of 2022 was
Mining revenue in the third quarter of 2022 was
Cost of revenues in the third quarter of 2022 was
Gross profit in the third quarter of 2022 was
Total operating expenses in the third quarter of 2022 were
Research and development expenses in the third quarter of 2022 were
Sales and marketing expenses in the third quarter of 2022 were
General and administrative expenses in the third quarter of 2022 were
Loss from operations in the third quarter of 2022 was
Non-GAAP income from operations in the third quarter of 2022 was
Impairment on cryptocurrency in the third quarter of 2022 was
Foreign exchange gains, net in the third quarter of 2022 was
Net income attributable to ordinary shareholders in the third quarter of 2022 was
Non-GAAP adjusted net income in the third quarter of 2022 was
Foreign currency translation adjustment, net of nil tax, in the third quarter of 2022 was an income of
Basic net earnings per American depositary share ("ADS") in the third quarter of 2022 was
Diluted net earnings per ADS in the third quarter of 2022 was
As of
Contract liabilities as of
As of
Shares Outstanding
As of
Recent Developments
The Release of
On
The Company's Share Repurchase Update
On
From
The At-the-Market ("ATM") Offering
On
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 fourth quarter of 2022, the Company expects total net revenues to be approximately
Conference Call Information
The Company's management team will hold a conference call at 7:00 A.M. U.
Event Title: Canaan Inc. Third Quarter 2022 Earnings Conference Call
Registration Link: https://register.vevent.com/register/BI9e3f73b54ce24104a97a602d1a014193
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, Canaan (NASDAQ: CAN), is a technology company focusing on ASIC high-performance computing chip design, chip research and development, computing equipment production, and software services. The Company's vision is "super computing is what we do, social enrichment is why we do it." Canaan has a rich experience in chip design and streamlined production in the ASIC field. In 2013, it released and mass produced its first ASIC Bitcoin mining machine. In 2018, Canaan released the world's first 7nm ASIC chip, providing energy efficient computing equipment to the cryptocurrency mining industry. In the same year, Canaan released the world's first RISC-V architecture commercial edge AI chip, further harnessing the potential of ASIC technology in the field of high-performance computing and artificial intelligence.
Exchange Rate Information
This announcement contains translations of certain RMB amounts into
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 net income, as supplemental measures to review and assess its operating performance. The Company defines adjusted net income as net income 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
|
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UNAUDITED CONSOLIDATED BALANCE SHEETS |
|||
(all amounts in thousands, except share and per share data, or as otherwise noted) |
|||
As of |
As of |
||
2021 |
2022 |
2022 |
|
RMB |
RMB |
US$ |
|
ASSETS |
|||
Current assets: |
|||
Cash and cash equivalents |
2,684,342 |
2,002,656 |
281,529 |
Restricted cash |
47,362 |
- |
- |
Accounts receivable, net |
367 |
- |
- |
Inventories |
812,363 |
1,328,875 |
186,810 |
Prepayments and other current assets |
1,729,027 |
1,693,175 |
238,023 |
Total current assets |
5,273,461 |
5,024,706 |
706,362 |
Non-current assets: |
|||
Cryptocurrency |
20,310 |
74,092 |
10,416 |
Property, equipment and software |
185,566 |
290,650 |
40,859 |
Right-of-use assets, net |
30,920 |
35,259 |
4,957 |
Deferred tax assets |
99,044 |
71,394 |
10,036 |
Other non-current assets |
2,956 |
35,504 |
4,991 |
Non-current financial investment |
20,000 |
20,000 |
2,812 |
Total non-current assets |
358,796 |
526,899 |
74,071 |
Total assets |
5,632,257 |
5,551,605 |
780,433 |
LIABILITIES, AND SHAREHOLDERS' EQUITY |
|||
Current liabilities |
|||
Accounts payable |
143,441 |
32,664 |
4,592 |
Contract liabilities |
1,340,731 |
299,462 |
42,098 |
Income tax payable |
148,719 |
110,289 |
15,504 |
Accrued liabilities and other current liabilities |
437,394 |
185,358 |
26,057 |
Lease liabilities, current |
14,819 |
18,666 |
2,624 |
Total current liabilities |
2,085,104 |
646,439 |
90,875 |
Non-current liabilities: |
|||
Lease liabilities, non-current |
16,292 |
13,928 |
1,958 |
Warrant liability |
66,347 |
- |
- |
Other non-current liabilities |
5,824 |
4,809 |
676 |
Total liabilities |
2,173,567 |
665,176 |
93,509 |
Shareholders' equity: |
|||
Ordinary shares ( |
1 |
1 |
- |
Subscriptions receivable from shareholders |
(1) |
(1) |
- |
|
(231,281) |
(305,752) |
(42,982) |
Additional paid-in capital |
2,891,134 |
3,201,983 |
450,128 |
Statutory reserves |
97,420 |
97,420 |
13,695 |
Accumulated other comprehensive income/(loss) |
(101,925) |
42,382 |
5,958 |
Retained earnings |
803,342 |
1,850,396 |
260,125 |
Total shareholders' equity |
3,458,690 |
4,886,429 |
686,924 |
Total liabilities and shareholders' equity |
5,632,257 |
5,551,605 |
780,433 |
|
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UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
||||
(all amounts in thousands, except share and per share data, or as otherwise noted) |
||||
For the Three Months Ended |
||||
|
|
|
|
|
RMB |
RMB |
RMB |
US$ |
|
Revenues |
||||
Product revenue |
1,311,992 |
1,600,420 |
915,992 |
128,768 |
Mining revenue |
5,624 |
52,096 |
62,018 |
8,718 |
Others |
- |
145 |
197 |
28 |
Total revenues |
1,317,616 |
1,652,661 |
978,207 |
137,514 |
Cost of revenues |
(575,925) |
(722,938) |
(744,028) |
(104,594) |
Gross profit |
741,691 |
929,723 |
234,179 |
32,920 |
Operating expenses: |
||||
Research and development expenses |
(92,763) |
(103,924) |
(118,084) |
(16,600) |
Sales and marketing expenses |
(37,597) |
(21,122) |
(14,249) |
(2,003) |
General and administrative expenses |
(148,053) |
(145,419) |
(142,690) |
(20,059) |
Total operating expenses |
(278,413) |
(270,465) |
(275,023) |
(38,662) |
Income/(loss) from operations |
463,278 |
659,258 |
(40,844) |
(5,742) |
Interest income |
2,917 |
2,076 |
2,948 |
414 |
Change in fair value of warrant liability |
45,224 |
25,042 |
- |
- |
Impairment on cryptocurrency |
- |
(30,025) |
(11,290) |
(1,587) |
Foreign exchange gains, net |
1,248 |
114,264 |
101,197 |
14,226 |
Other (loss)/income, net |
(207) |
5,976 |
6,021 |
846 |
Income before income tax expenses |
512,460 |
776,591 |
58,032 |
8,157 |
Income tax (expense)/benefit |
(4) |
(167,677) |
3,046 |
428 |
Net income |
512,456 |
608,914 |
61,078 |
8,585 |
Foreign currency translation adjustment, |
5,669 |
55,089 |
94,008 |
13,215 |
Total comprehensive income |
518,125 |
664,003 |
155,086 |
21,800 |
Weighted average number of shares |
||||
— Basic |
2,615,416,505 |
2,584,644,729 |
2,560,879,920 |
2,560,879,920 |
— Diluted |
2,652,280,752 |
2,585,684,866 |
2,580,542,499 |
2,580,542,499 |
Net earnings per Class A and Class B |
||||
— Basic |
19.59 |
23.56 |
2.39 |
0.34 |
— Diluted |
19.32 |
23.55 |
2.37 |
0.33 |
Share-based compensation expenses were included in: |
||||
Cost of revenues |
- |
104 |
481 |
68 |
Research and development expenses |
25,911 |
17,482 |
14,484 |
2,036 |
Sales and marketing expenses |
1,248 |
4,392 |
5,370 |
755 |
General and administrative expenses |
93,157 |
82,301 |
84,888 |
11,933 |
The table below sets forth a reconciliation of net income to non-GAAP adjusted net income for the period indicated: |
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For the Three Months Ended |
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|
|
|
|
|
RMB |
RMB |
RMB |
US$ |
|
Net income |
512,456 |
608,914 |
61,078 |
8,585 |
Share-based compensation expenses |
120,316 |
104,279 |
105,223 |
14,792 |
Change in fair value of warrant liability |
(45,224) |
(25,042) |
- |
- |
Non-GAAP adjusted net income |
587,548 |
688,151 |
166,301 |
23,377 |
* As a result of the revaluation for the fair value of the warrant liability which was fully repurchased and extinguished in June |
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