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- 1 Beijing-based mining rig maker Canaan Inc. (CAN) reported an 82% year-to-year drop in revenue.
- 2 The drop was reported in the financial report and earnings report, which came out on March 7, 2023.
Canaan revealed an 82% revenue drop in the Q4 report. Its shares dropped by 3.83% on Wednesday. The Beijing-based crypto mining rig maker, and a leading high-performance computing solutions provider, announced its unaudited financial results for Q4 and the twelve-month ending on December 31, 2022 report, on March 8, 2023.
Canaan Inc. – Financial Report Highlights
The Q4 for Canaan saw a decrease of $56.8 million, a 59.9% drop from Q3 of 2022, and a massive drop of 82.1% from 2021 reported in the same time frame. The probable reason for the drop was cited to be a fall in mining machines’ demand, as there was a downfall in Bitcoin prices.
The decline in the total computing power sold cost Canaan revenue. The yearly count was 4.38 billion yuan, a drop from 4.99 billion yuan in 2021. The net income in 2021 was around 2 billion; in 2022, it was just 658.2 million yuan.
Canaan route to Recovery
Nangeng Zhang, CEO and Chairman of Canaan, said that the company went through a tougher fourth quarter, intensified by declining BTC prices. Eventually, leading to a drop in demand for mining machines. The company is working on improving and developing its mining business to recover from this fall.
Bitcoin has been the leading cryptocurrency since its inception, and to exploit this fact. The mining rig maker is about to develop their own BTC mining business to capitalize on the ecosystem and use the buzz to help their mining sales business.
By February end, Canaan increased their computing power to 3.8 exahash per second (EH/s), focused on their mining operations in Central Asia and North America. They are working hard to boost their computing power to the range of 5-5.5 EH/s by the end of Q1 2023.
Canaan Inc. (CAN) – Current Financial Health
At the time of writing, CAN was trading at $2.51 with a correction of 3.83%. Previous open and close were at $2.61 and $2.57, respectively. The market cap was $431.283 million. The earnings were reported on March 7, 2023, where the estimated revenue was $39.894 million, while the reported revenue was $56.806 million, with a surprise of $16.912 million, with a difference of 42.39%. The estimated price target is $7.51, with an upside of 170.3%.
Operating expenses dropped by 1.62% to $274.66 million; net income was $46.06 million, with a correction of 91.74%. The quarterly revenue growth is negative 82.10%.
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