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Canaan Swings to $8M Q3 Profit on Gains as Revenue Falls 90%

Canaan Swings to $8M Q3 Profit on Gains as Revenue Falls 90%

Canaan reported Q3 revenue of $14.5M, down 90% year on year, and $8.0M net income driven by $51.9M of non-cash fair-value gains, per its earnings release.

Canaan reported third-quarter revenue of $14.5 million, down about 90% from $150.5 million a year earlier, in its unaudited results released on November 10. The Block and Bitcoin Magazine both covered the report.

The 96% drop refers to product sales: revenue from mining equipment fell to $4.8 million from $118.6 million. Mining revenue was $9.5 million, down from $30.6 million, after the company mined 133 BTC versus 267 BTC a year earlier, The Block reported.

Canaan posted net income of $8.0 million, compared with a $27.7 million loss a year earlier. The profit did not come from operations. The company recorded a $20.1 million gain on cryptocurrency and a $31.9 million gain on financial derivatives, a combined $51.9 million. CFO James Cheng said the non-cash gain is “distinct from underlying operating performance.” Gross loss was $8.6 million and loss from operations widened to $42.9 million from $23.9 million, according to the release.

As of September 30, Canaan held 1,875.5 BTC, of which 1,258 BTC were pledged for secured loans. Its board approved a $100 million buyback on November 6, and Bitcoin Magazine reported a planned 1-for-25 ADS reverse split around December 4. Canaan guided Q4 revenue of $18 million to $22 million, subject to change. All figures are company-reported.

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