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Hangzhou-based Canaan Inc. (NASDAQ: CAN) recently announced financial results for the quarter ended September 30, 2020. The NASDAQ listed hardware manufacturer reported a net loss of $12.7 million in Q3 despite a BTC price jump during the same period.
Canaan released the unaudited financial report on November 30. The firm generated $24 million in net revenues in Q3 this year, representing a 75.7% year-over-year drop compared to the $100 million results a year prior.
The company, which sells servers and ASIC microprocessor solutions used in digital currency mining, had previously reported a net income of roughly $14 million in the same period a year ago. This latest quarterly loss widens from a net loss of $2.3 million in Q2 2020.
Canaan has seen its market share shrink as it battles for customers against fellow Chinese hardware makers, Bitmain Technologies, and MicroBT. The firm also reported it sold 2.9 million terahashes per second (TH/s) of computing power in the third quarter of 2020, a decline of 20.7% compared to the same period of year-ago when sales reached 3.7 million Thash/s.
Canaan’s bright spot is computing power sold increased from 2.6 million Thash/s in the second quarter of 2020, rising 13.4% respectively.
Investors might attribute this rise to Canaan’s sales team, making significant price cuts to its ASIC mining equipment. While the business grew slightly, quarter-over-quarter revenue decreased by 8.5% from $27 million.
The hardware firm also increased its operating costs by 4.4% in Q3 2020 to $11.2 million compared to Q3 2019, seeing its general and administrative expenses grow as expenditures relating to marketing and R&D dipped.
Mr. Nangeng Zhang, Chairman and CEO at Canaan, attempted to put a positive spin on the report commenting:
“During the third quarter of 2020, we remained undeterred by the pandemic to strengthen our research and development capabilities, expand our AI business, and execute new business initiatives. By leveraging our enhanced R&D capabilities in the third quarter, we launched our A1246 product series, which continues to lead the industry with its energy efficiency, computing power, and unit cost. .. we are confident that the enhanced performance of our new products will continue to bolster our competitive advantages and solidify our market leadership going forward.”
Canaan declined to issue financial guidance in the near term. It also reported it had cash and cash equivalents of $26.1 million compared to roughly $78 million as of December 31, 2019. Shares for Canaan began dropping after the report was released, closing at 4.7000 at the time of this writing.
See also: TAAL’s Jerry Chan presentation at CoinGeek Live on The Shift from Bitcoin “Miners” to “Transaction Processors”
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