Bitcoin mining company Canaan has released unaudited financial results for the second quarter of 2023, showing an increase in its sold computing power and BTC mining revenue, while the company also settled a significant net loss of $110 million. A 31% increase from the first quarter.
NASDAQ listed company overview There were multiple reasons for the increase in revenue and significant headwinds, including a total of $54 million in inventory write-downs and equipment impairments.
Canaan’s revenue for the second quarter of 2023 was US$73.9 million, up from US$55.2 million in the previous quarter. This includes $57.9 million in product revenue and $15.9 million in bitcoin mining revenue.
Compared with the $11.1 million in the first quarter, BTC mining revenue increased by 43.3%, and Canaan Creative’s BTC mining revenue in the second quarter of 2023 is more than double the $7.8 million in the second quarter of 2022. The firm attributed the surge to a recovery in the price of bitcoin and the consequent increase in bitcoin rewards.
“The quarter-over-quarter increase was primarily driven by a recovery in bitcoin prices during the quarter and increased bitcoin rewards across the network.”
Canaan also reported a significant increase in the total amount of computing power it sold, reaching 6.1 million Tash/s, a 45% quarter-on-quarter increase, with this segment becoming the main driver of the company’s revenue.
Canaan also detailed a net loss totaling $110.7 million in the second quarter, attributable to non-cash accruals and provisions reflecting changes in sales prices, regulatory changes and partnership agreements.
Related: Bitcoin ASIC Maker Canaan’s Q4 Revenue Drops 82%
Cheng Jin, Canaan’s chief financial officer, added that the losses included inventory write-downs, provisions for committed reserves, and property and equipment impairments, totaling $54.7 million.
“These non-cash accruals and provisions reflect our consideration of the latest sales price changes, regulatory changes in Kazakhstan, and default by our US project partners, which did not impact our cash flow.”
As of June 2023, Canaan’s holdings of listed cryptocurrencies include 1,125 bitcoins worth $28.8 million. Canaan has 747 BTC, while customer deposits have 378 BTC.
Canaan also reported that it has suspended 2.0 exahash/s of mining capacity in Kazakhstan to ensure legal compliance with the upcoming Digital Mining Activities Licensing Rules.
The company, which is obtaining a dedicated license to continue operating, expects to generate less BTC in the third quarter due to offline hardware.
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