According to a new filing with the U.S. Securities and Exchange Commission on Mar. 7, Canaan, a Chinese Bitcoin (BTC) miner and manufacturer of application-specific integrated circuit (ASIC) mining machines, reported that its revenue decreased by 82.1% Y/Y to $56.8 million in Q4 2022. During the quarter, Canaan sold 1.9 million terahash per second worth of computing power for Bitcoin mining, not accounting for lower ASIC prices, representing a 75.8% decline from Q4 2021.
At the same time, Canaan’s mining revenue improved 368.2% year over year to $10.46 million. As told by Nangeng Zhang, chairman and CEO of Canaan:
“To mitigate demand risks during the market downturn, we have been diligently improving and developing our mining business. Our efforts yielded more progress in early 2023 with 3.8 EH/s hash rate installed for mining as of the end of February. Accordingly, we have made decisive investments in bolstering our production capacity and expanding our mining operations to more varied geographic regions that offer advantageous conditions.”
Despite the segment’s success, however, Canaan’s net income swung to a $63.6 million loss in Q4 2022 compared to a profit of $182.0 million in Q4 2021. As told by Jin Cheng, Chief financial officer of Canaan, the loss was due to inventory write-downs and research expenses related to its new fleet of ASICs.
“Considering very soft market demand and low selling price, we incurred an additional inventory write-down of RMB205.3 million, which also dampened our gross margin. In conjunction with one-time higher research and development expenses relating to the tape-out for our A13 series, our bottom line suffered losses during the quarter.”
For the full year, the firm’s revenue decreased by 13.8% to $634.9 million, mainly due to better industry conditions in Q1 and Q2 2022. The firm currently has $706 million in total assets compared to $67 million in total liabilities.
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