Canaan Q2 Earnings Call Highlights

Key Points

• Q2 revenue missed guidance: Canaan reported approximately $32 million in revenue, below its $35 million–$45 million forecast, as weak mining economics, cautious customer spending and excess inventory pressured equipment sales and pricing.
• Mining drove most revenue and improved liquidity: Mining revenue contributed $18 million, or 55% of total revenue, while cash increased to $66 million from $43 million in Q1 through collections, tax refunds and tighter spending controls.
• Near-term outlook remains weak: Canaan expects third-quarter revenue of $11 million–$15 million amid continued cautious miner procurement and pricing pressure, while pursuing power infrastructure, AI/HPC partnerships and compute-to-heat products.

Canaan NASDAQ: CAN reported second-quarter 2026 revenue of approximately $32 million, below its prior guidance of $35 million to $45 million, as weaker Bitcoin mining economics, cautious customer spending and elevated industry inventory pressured equipment sales and pricing.

Chairman and CEO Nangeng Zhang said Bitcoin prices rose from roughly $62,000 to $82,000 during the first half of the quarter before falling to about $58,000 by quarter-end. Hash price ranged from $0.028 to $0.039 per terahash per second per day, remaining at relatively low levels. He also cited tighter mining-related policies in China and elsewhere, geopolitical conflicts and an increased focus among U.S. capital markets and traditional miners on artificial intelligence and high-performance computing.

“In the second half of the quarter, Bitcoin prices fell quickly,” Zhang said. “Miners became more cautious about equipment purchases, and high industry inventory levels increased price competition.”

Mining Operations Accounted for Majority of Revenue

Chief Financial Officer James Jin Cheng said product revenue was approximately $14 million in the quarter, with Canaan selling 2.5 exahash per second of computing power at an average selling price of $5.50 per terahash per second. Mining revenue totaled approximately $18 million, representing 55% of total revenue, as the company mined 243 Bitcoin during the period.

Excluding depreciation, Canaan’s mining gross margin was 20%, Cheng said. The company adjusted deployed hashrate across sites based on power pricing, load management and operating conditions, directing resources toward projects with more favorable economics.

At the end of June, Canaan had approximately 10.05 exahash per second of installed hashrate in non-joint-venture projects. Its average all-in power cost in June was about $0.043 per kilowatt-hour, according to Zhang.

Management highlighted Project ABC, a mining project operated with partner WindHQ, as a key part of its effort to build cash-generating mining and energy infrastructure. Installed hashrate at Project ABC reached 4.85 exahash per second at the end of July, up 10% from the end of March. The project generated positive cash flow, Zhang said.

Cheng said Canaan received $5.2 million in cash from Project ABC during the second quarter, including sales collections and cash distributions. Cumulative cash received reached $8.4 million as of Aug. 31. The company recognized roughly $4 million in equity investment losses tied to the project, primarily due to retirement of older mining machines during fleet upgrades.

Cash Balance Rose as Company Tightened Spending

Canaan ended the second quarter with $66 million in cash, up from $43 million at the end of the first quarter. During the quarter, it collected $54 million in cash from product sales and received another $15 million from value-added tax refunds, equity-investment cash distributions and Bitcoin-backed financing.

The company used $35 million for operating expenses and working capital and $11 million for wafer purchases. Total operating expenses were $40 million, including $9.2 million in property, plant and equipment impairment charges and $2.7 million in credit losses. Excluding those items, operating expenses were $28.2 million, down 9% sequentially and 14% from a year earlier.

Adjusted EBITDA was a loss of $74.9 million, broadly in line with the preceding quarter. Cheng said results included substantial non-cash accounting effects, including inventory write-downs, fixed-asset impairment and fair-value losses on digital assets.

“In a down cycle, we believe financial resilience itself is a competitive advantage,” Cheng said, citing the company’s build-to-order approach, tighter working-capital management and emphasis on cash collections.

Digital Assets Monetized for Share Repurchases

At June 30, Canaan held 1,915 Bitcoin and 3,952 Ethereum, with a combined carrying value of $112 million. In late August, the company sold all of its Ethereum holdings and 54 Bitcoin, generating approximately $13.9 million in cash.

Canaan used part of those proceeds to repurchase American depositary shares. It repurchased 2.8 million ADSs for approximately $2 million in the first half of 2026 and another 13.6 million ADSs for $5.4 million in late August. Year to date, the company has repurchased about 16.4 million ADSs for total consideration of $7.4 million under its existing $30 million authorization.

Management said it has not used its at-the-market program or raised capital since the beginning of the second quarter. Zhang said the company considers its shares meaningfully undervalued while retaining capital for operations and project investments.

Power Pipeline, Compute-to-Heat and Product Plans

Canaan said it remains confident it can secure gigawatt-scale power resources by the end of 2026, though Zhang declined to provide site locations, project capacities or specific development-stage details. Management said it is evaluating potential mining, high-performance computing and AI-related applications, but does not intend to build an end-to-end data-center model independently.

Zhang said Canaan expects to work with partners that can provide complementary capital, engineering, site operations and other capabilities. The company plans to evaluate whether mining or other computing loads represent the best use for each power site, while maintaining capital discipline.

The company also continues to pursue compute-to-heat applications. Its Nordic heating projects have 2 megawatts of equipment operating, and a customer ordered an additional 6 megawatts in March, according to Zhang. Canaan is preparing new Avalon Home consumer products for mass production in the third quarter and plans product launches and updates during the Christmas shopping season. Avalon Home generated approximately $1 million in second-quarter revenue.

For the third quarter, Canaan forecast total revenue of $11 million to $15 million. Management said miner procurement remains cautious, industry inventory still needs to be absorbed and equipment pricing is expected to remain under pressure.

Canaan also said it has transferred to the Nasdaq Capital Market and received an additional 180-day grace period, through Jan. 11, 2027, to regain compliance with Nasdaq’s minimum bid-price requirement.

About Canaan (NASDAQ:CAN)

Canaan Inc is a China-based technology company specializing in the design and manufacture of high-performance computing hardware for the digital currency and blockchain industry. The company's core business revolves around application-specific integrated circuit (ASIC) miners, which are purpose-built machines optimized for cryptocurrency mining. By focusing on energy efficiency and processing power, Canaan's mining rigs aim to deliver competitive hash rates while managing power consumption in large-scale operations.

The flagship product line, known as AvalonMiner, encompasses a range of models tailored to different scales of mining activity, from small-scale hobbyist setups to industrial farms.

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