BTC block reward miner Canaan Inc. (NASDAQ: CAN) recorded an $80 million net loss in the third quarter amid a slump in ASIC mining rig sales and a dip in the price of BTC.
The company’s latest earnings report shed light on the struggles that the miner has been facing even as the wider industry is seen to be recovering after a brutal year.
Canaan generated $33.3 million in total revenue, a 55% dip quarter-over-quarter from $58 million in Q2. A bulk of the revenue, $29.8 million, was from selling its mining rigs, while in-house mining contributed 10%.
At only 117 BTC mined, income from the company’s mining operations dipped 80% quarter-over-quarter and by 65% from the same period last year.
At a time when artificial intelligence (AI) has become the dominating emerging technology, Canaan has been investing in AI, but its efforts have yet to bear fruit. In the third quarter, it invested $17.2 million in AI research and development, but the revenue was a paltry $0.2 million.
Overall, the company recorded a net loss of $80.1 million, an improvement from the $110 million loss recorded in the second quarter. In Q3 last year, the company recorded net income of $6.3 million.
“During the third quarter of 2023, the stagnant bitcoin price and further interest rate hikes by the Federal Reserve presented us with significant challenges,” commented Canaan Chairman and CEO Nangeng Zhang.
Despite the losses, Zhang said the company has made significant leaps. This includes the launch of the company’s newest mining rig, the A14 Series. It’s also working with Kazakhstan regulators to resume operations suspended after a new license was implemented for miners. Zhang said that mining in the Asian nation will gradually resume towards the end of the year.
Additionally, it revealed that the company is seeking to raise $148 million in an equity offering. It has already signed an agreement with an unnamed investor who will invest $125 million to purchase 125,000 units of preferred stock.
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