Canaan Misses Q2 Earnings, Guides Q3 Revenue Significantly Below Consensus

Canaan Inc CAN reported a Q2 FY23 revenue of $73.9 million, down from $245.9 million a year ago, missing the consensus of $77.26 million. 

Product revenue fell to $57.9 million from $238.1 million on lower selling price due to declining bitcoin price.

Mining revenue increased to a historic high of $15.9 million from $7.8 million the prior year, mainly led by increased computing power energized for mining.

Total computing power sold rose 11.7% Y/Y to 6.1 million Thash/s.

EPS of $(0.59) missed the consensus loss of $(0.12).

As of June 30, 2023, cash and cash equivalents stood at $66.1 million and held 1,125 bitcoins with a total carrying value of $28.8 million.

"We navigated the challenges in the second quarter of 2023, surpassing our topline guidance to achieve US$73.9 million in revenue. Despite the relatively stagnant bitcoin price in the second quarter, our endeavor to drive sales across various fronts, including major clients, channels, and retail, yielded encouraging results. This effort propelled our total computing power sold to a remarkable 6.1EH/s, up 44% sequentially. Our partnerships with channel clients proved fruitful, while our online retail store continued to capture new clientele from diverse geographical regions. Our mining revenue further set a new historic high in the second quarter of 2023. Recently, we have expanded into new mining projects in Africa and South America," said Mr. Nangeng Zhang, Chairman and Chief Executive Officer.

Outlook: For Q3, the company expects revenues of about $30 million vs. the consensus of $115.25 million, reflecting challenging market conditions. 

Price Action: CAN shares are trading higher by 5.18% at $2.0930 on the last check Tuesday.