Q4 sales fell 82% for bitcoin ASIC maker Canaan

Canaan’s yearly sales fell 13.8% to $634.9 million, largely because the sector improved in 2022’s Q1 and Q2.

Canaan, a Chinese Bitcoin (BTC) miner and maker of application-specific integrated circuit (ASIC) mining devices, said in a recent filing with the U.S. Securities and Exchange Commission on March 7 that its revenue decreased by 82.1% year over year to $56.8 million in Q4 2022.

Canaan sold 1.9 million terahash per second worth of processing power for Bitcoin mining during the quarter, not accounting for lower ASIC prices, representing a 75.8% decline from Q4 2021.

Similarly, Canaan’s mining income increased by 368.2% annually to $10.46 million. As stated by Canaan’s chairman and CEO, Nangeng Zhang:

“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.”

Notwithstanding the segment’s growth, Canaan’s net income decreased from $182.0 million in Q4 2021 to a loss of $63.6 million in Q4 2022, compared to a profit of $182.0 million in Q4 2021.

The loss, according to Canaan’s chief financial officer, Jin Cheng, was a result of inventory write-downs and ASIC-related research fees.

“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.”

The company’s annual sales dropped by 13.8% to $634.9 million, mostly because the industry got better in the first and second quarters of 2022. The company has $706 million in total assets and $67 million in total liabilities now.