Canaan's revenue collapses 90% to $14.5 million as bitcoin miner sales dry up, but paper gains on crypto keep it in profit

Canaan, which makes bitcoin mining machines and also mines bitcoin itself, said on Tuesday that its third-quarter revenue fell to $14.5 million from $150.5 million a year earlier, a drop of about 90%. Product revenue fell to $4.8 million from $118.6 million, which The Block reported the company put down to less computing power sold and lower average selling prices. Revenue from its own mining fell to $9.5 million from $30.6 million, and it mined 133 bitcoin in the quarter.

The bottom line moved the other way. Canaan reported net income of $8.0 million, against a $27.7 million loss a year earlier, even as its operating loss widened to $42.9 million from $23.9 million. Chief financial officer James Cheng credited a fair-value gain on the company's crypto holdings and, as quoted by The Block, said: "We recognize that this non-cash gain is distinct from underlying operating performance."

At the end of September Canaan held about 1,875 bitcoin, of which 1,258 were pledged for secured loans. Its board approved a $100 million, 12-month repurchase authorization on November 6, and the company has started a first program of up to $20 million under it. The Block also noted Canaan's plans for large mining sites in Texas, where a proposed 1 gigawatt project in Duval County has a conditional grid classification and still needs further studies.