The company’s revenue fell just 14% for the full year as part of improved industry conditions in the first and second quarters of 2022.
According to a new filing with the US Securities and Exchange Commission on March 7, Canaan, a Chinese Bitcoin company
mining company and maker of application-specific integrated circuit (ASIC) mining machines, reported that its revenue fell 82.1 percent year over year to $56.8 million in the fourth quarter of 2022. During the quarter, Canaan sold 1.9 million terahashes per second in Bitcoin mining computing power, which does not represent lower ASIC prices, a decrease of 75.8% from the fourth quarter of 2021.
At the same time, Canaan’s mining revenue increased 368.2% year over year to $10.46 million. As reported by Nangeng Zhang, President and CEO of Canaan:
“To mitigate demand risks during the market downturn, we have diligently improved and developed our mining business. Our efforts yielded further progress in early 2023, with a hash rate of 3.8 EH/s installed for mining in late February. Therefore, we have made decisive investments to increase our production capacity and expand our mining activities in the most diverse geographical areas that offer advantageous conditions”.
Despite the success of the segment, however, Canaan’s net income fell to a loss of $63.6 million in the fourth quarter of 2022, compared to a profit of $182.0 million in the fourth quarter of 2021. As reported by Jin Cheng, Canaan’s chief financial officer, the loss was due to inventory write-downs and research expenses related to its new fleet of ASICs:
“Considering the very weak market demand and low sales price, we incurred an additional RMB 205.3 million inventory write-down, which also hurt our gross margin. Coupled with the once higher R&D expenses related to tape-out for our A13 series, our bottom line took a hit during the quarter.
For the full year, the company’s revenue decreased 13.8% to $634.9 million, primarily due to improved industry conditions in the first and second quarters of 2022. The company currently has $706 million of total assets, compared to $67 million in total liabilities.