Canaan, the Singapore-based maker of Avalon bitcoin mining machines, said third-quarter revenue fell 90% from a year earlier to $14.5 million, its results release shows. Sales of mining machines, the business it was built on, fell to $4.8 million from $118.6 million.
It still reported net income of $8.0 million, against a $27.7 million loss a year earlier.
The difference is bitcoin. Canaan booked a $20.1 million gain on the fair value of its crypto and $31.9 million on financial derivatives, as the price recovered towards the end of September. The business model, in one sentence: Canaan sells mining machines, mines bitcoin with the ones it keeps, and holds the coins, so in a weak quarter for hardware its results follow the bitcoin price.
The numbers that matter
- Machines sold: 1.0 million TH/s of computing power, for $4.8 million of products revenue.
- Mining revenue: $9.5 million from 133 BTC mined, down from $30.6 million a year earlier.
- Gross loss: $8.6 million, against a gross profit of $16.6 million a year earlier.
- Loss from operations: $42.9 million, wider than $23.9 million.
- Inventory write-downs: about $8.2 million, down from $25.3 million in the second quarter.
- Bitcoin held: about 1,875 BTC at 30 Sept, of which 1,258 BTC was pledged for secured term loans.
Cash fell to $22.8 million at 30 Sept, from $80.8 million at the end of 2025, while $50 million now sits as restricted cash backing a letter of credit for its Texas power projects, the balance sheet shows.
Why investors sold
The shares closed at about $0.16 on Tuesday, down about 20% from Monday’s $0.20, Yahoo Finance data show.
Canaan plans to change its ADS ratio from 15 ordinary shares per ADS to 375, the equivalent of a 1-for-25 reverse split, on or about 4 Dec. It says the change is meant to help it regain compliance with Nasdaq’s minimum bid price rule. It also announced a $20 million share repurchase programme under a $100 million board authorisation.
The skeptics’ reading
The profit rests on a price move Canaan does not control, as its finance chief said himself. Chairman and chief executive Nangeng Zhang pointed instead to “continued weakness in bitcoin mining equipment demand and intense industry pricing competition”.
Canaan’s pitch has moved to power: a 1 GW project in Duval County, Texas, that ERCOT has classified as “Studied Load – Firm” on a conditional basis, and a second 1 GW site in Zapata County at an early stage. Other listed miners are on similar paths. Core Scientific plans to leave bitcoin mining, and American Bitcoin’s quarterly profit also came from a bitcoin gain.
What’s next
Canaan expects fourth-quarter revenue of $18 million to $22 million. The ADS ratio change is due on or about 4 Dec.
This article is for information only and is not investment advice.