Third Quarter 2023 Operating and Financial Highlights
Total computing power sold was 3.8 million Thash/s, representing a decrease of 38.7% from 6.1 million Thash/s in the second quarter of 2023 and an increase of 8.7% from 3.5 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, "During the third quarter of 2023, the stagnant bitcoin price and further interest rate hikes by the
"Overall, we faced increased pricing competition and a noticeable softening in purchasing power on the demand front, which have posed severe challenges to our sales. In response, we have been focusing on driving product iteration, building a multifaceted sales system, and exploring mining collaborations, making relentless efforts to adapt and find business opportunities in tough market conditions. As a provider of crucial bitcoin infrastructure, we believe in the long-term prospects of the bitcoin system and are poised to leverage our experience to navigate these turbulent times, capturing value from the future upswings in the bitcoin price."
Mr.
"Our net loss for the third quarter amounted to
Third Quarter 2023 Financial Results
Revenues in the third quarter of 2023 were
Products revenue in the third quarter of 2023 was
Mining revenue in the third quarter of 2023 was
Cost of revenues in the third quarter of 2023 was
Products costs in the third quarter of 2023 were
Mining costs in the third quarter of 2023 were
Gross loss in the third quarter of 2023 was
Total operating expenses in the third quarter of 2023 were
Research and development expenses in the third quarter of 2023 were
Sales and marketing expenses in the third quarter of 2023 were
General and administrative expenses in the third quarter of 2023 were
Impairment on cryptocurrency in the third quarter of 2023 was
Loss from operations in the third quarter of 2023 was
Non-GAAP loss from operations in the third quarter of 2023 was
Foreign exchange gains, net in the third quarter of 2023 were
Net loss in the third quarter of 2023 was
Non-GAAP adjusted net loss in the third quarter of 2023 was
Foreign currency translation adjustment, net of nil tax, in the third quarter of 2023 was a gain of
Basic and diluted net loss per American depositary share ("ADS") in the third quarter of 2023 were
As of
As of
Accounts receivable, net as of
Shares Outstanding
As of
Recent Developments
Obtained License for Bitcoin Mining in
In
In
Dispute Relating to Joint Mining Activities in the
On
As of the date of this press release, the Company has taken possession of approximately all 26,000 units of mining machines deployed in this project and has reallocated about half of the collected machines for customer orders.
AI Business Updates
The Company is in the process of conducting an internal reorganization to enable the AI business to operate and obtain potential financing on a standalone basis.
Execution of a Securities Purchase Agreement
On
The Company has adopted a Certificate of Designations (the "Certificate of Designations") of Preferred Shares, par value
The Company intends to use the net proceeds from the sale of the securities for research and development, expansion of production scale, and other general corporate purposes.
The At-the-Market ("ATM") Offering
On
The Company has filed a new prospectus supplement, dated
On
From
Effective
Business Outlook
For the fourth 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. Third Quarter 2023 Earnings Conference Call
Registration Link: https://register.vevent.com/register/BI3e86e540c7aa4f699fa1958a1ce15dc4
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 adjusted net income (loss) as net income (loss) excluding share-based compensation expenses. 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
CANAAN INC. |
||
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 |
40,574 |
Accounts receivable, net |
- |
9,778 |
Inventories |
211,640 |
217,128 |
Prepayments and other current assets |
242,523 |
81,743 |
Total current assets |
555,714 |
349,223 |
Non-current assets: |
||
Cryptocurrency |
12,531 |
30,453 |
Property, equipment and software |
85,350 |
34,002 |
Right-of-use assets, net |
4,250 |
2,300 |
Deferred tax assets |
21,740 |
43,959 |
Other non-current assets |
2,504 |
1,396 |
Non-current financial investment |
2,872 |
2,786 |
Total non-current assets |
129,247 |
114,896 |
Total assets |
684,961 |
464,119 |
LIABILITIES, AND SHAREHOLDERS' EQUITY |
||
Current liabilities |
||
Accounts payable |
16,703 |
19,223 |
Contract liabilities |
662 |
5,634 |
Income tax payable |
7,228 |
3,524 |
Accrued liabilities and other current liabilities |
48,349 |
60,958 |
Lease liabilities, current |
2,314 |
1,553 |
Total current liabilities |
75,256 |
90,892 |
Non-current liabilities: |
||
Lease liabilities, non-current |
1,441 |
362 |
Other non-current liabilities |
598 |
9,428 |
Total liabilities |
77,295 |
100,682 |
Shareholders' equity: |
||
Ordinary shares ( |
- |
- |
|
(57,055) |
(57,055) |
Additional paid-in capital |
492,220 |
529,827 |
Statutory reserves |
14,892 |
14,892 |
Accumulated other comprehensive loss |
(36,913) |
(43,611) |
Retained earnings (accumulated deficit) |
194,522 |
(80,616) |
Total shareholders' equity |
607,666 |
363,437 |
Total liabilities and shareholders' equity |
684,961 |
464,119 |
|
|||
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 |
|||
September 30, 2022 |
June 30, 2023 |
September 30, 2023 |
|
USD |
USD |
USD |
|
Revenues |
|||
Products revenue |
136,288 |
57,940 |
29,937 |
Mining revenue |
9,227 |
15,896 |
3,264 |
Other revenues |
30 |
17 |
118 |
Total revenues |
145,545 |
73,853 |
33,319 |
Cost of revenues |
(112,911) |
(143,928) |
(102,409) |
Gross profit (loss) |
32,634 |
(70,075) |
(69,090) |
Operating expenses: |
|||
Research and development expenses |
(17,642) |
(17,857) |
(17,152) |
Sales and marketing expenses |
(2,112) |
(2,437) |
(2,491) |
General and administrative expenses |
(21,711) |
(26,369) |
(21,914) |
Impairment on cryptocurrency |
(1,680) |
(2,363) |
(2,199) |
Total operating expenses |
(43,145) |
(49,026) |
(43,756) |
Loss from operations |
(10,511) |
(119,101) |
(112,846) |
Interest income |
439 |
226 |
61 |
Foreign exchange gains, net |
15,057 |
2,574 |
10,890 |
Other income, net |
255 |
176 |
1,349 |
Income (loss) before income tax expenses |
5,240 |
(116,125) |
(100,546) |
Income tax benefit |
1,067 |
5,456 |
20,443 |
Net income (loss) |
6,307 |
(110,669) |
(80,103) |
Foreign currency translation adjustment, net of |
(25,887) |
(23,518) |
7,662 |
Total comprehensive loss |
(19,580) |
(134,187) |
(72,441) |
Weighted average number of shares used in |
|||
— Basic |
2,560,879,920 |
2,547,999,846 |
2,562,542,847 |
— Diluted |
2,580,542,499 |
2,547,999,846 |
2,562,542,847 |
Net earnings (loss) per share (cent per share) |
|||
— Basic |
0.25 |
(4.34) |
(3.13) |
— Diluted |
0.24 |
(4.34) |
(3.13) |
Share-based compensation expenses were included in: |
|||
Cost of revenues |
72 |
60 |
67 |
Research and development expenses |
2,227 |
2,452 |
2,411 |
Sales and marketing expenses |
791 |
233 |
86 |
General and administrative expenses |
13,112 |
8,323 |
7,176 |
The table below sets forth a reconciliation of net income (loss) to non-GAAP adjusted net income (loss) for the period indicated: |
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For the Three Months Ended |
|||
|
|
|
|
USD |
USD |
USD |
|
Net income (loss) |
6,307 |
(110,669) |
(80,103) |
Share-based compensation expenses |
16,202 |
11,068 |
9,740 |
Non-GAAP adjusted net income (loss) |
22,509 |
(99,601) |
(70,363) |
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