Canaan Second Quarter Profits Rise in Volatile Digital Currency Market

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Canaan Inc. (NASDAQ: CAN), a Beijing-based computer hardware maker of digital currency mining equipment, reported record second quarter FY21 revenue growth of 507.3 % year-over-year to $ 167.5 million.

The NASDAQ-listed company said in a quarterly earnings report that it sold 5.9 million terahashes per second (TH / s) of hash power during the quarter, an increase of 126.9 % year-over-year from 2.6 million TH / s. This hash rate amount is about 4% of the total current hash power of the BTC network.

Canaan Chairman and CEO Nangeng Zhang commented, “We achieved a remarkable performance in the second quarter of 2021. Despite unexpected regulatory policy dynamics and Bitcoin price volatility, we achieved record results in delivering 5.9 million Thash / s of compute. power to our customers.

The better-than-expected second-quarter net revenues marked the strongest quarterly sales in Canaan’s operating history, up 507.3% from around $ 27 million in the same period of 2020 and 168.6% from around $ 61.5 million in the first quarter of 2021.

Canaan’s gross profit was $ 66.2 million, up 887.0% from about $ 6.1 million in the same period of 2020 and 119.9% ​​from to about $ 29.6 million in the first quarter of 2021.

The company said net profit stood at $ 37.9 million, “marking the highest quarterly net profit since the company’s initial public offering in 2019.” This result compares to a net loss of $ 2.4 million over the same period of 2020.

James Cheng, CFO of Canaan, said, “We reported strong financial results for the quarter. In addition to record revenue of RMB 1.08 billion and non-GAAP net profit of RMB 320.1 million, our strong pre-order backlog, mainly from overseas customers, generated abundant prepayments, which still have improved our cash position. “

As of June 30, 2021, the company had $ 189.0 million in cash and cash equivalents and $ 161 million in contractual liabilities for equipment preorders that have yet to be delivered in the coming quarters. .

Investors should keep in mind that the outlook for the volatile block-reward mining industry has a big impact on the performance of Canaan stocks. The company offered vague optimistic indications in the report that it expects its total revenues for the third quarter “to increase sequentially from 10% to 30%.”

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