Canaan's Q3 Revenue Falls 90% to $14.5 Million as Loss Widens

Canaan posted third-quarter revenue of $14.5 million, down 90% year over year, as weak demand and lower prices for Bitcoin mining machines cut into sales, according to the company's quarterly report. Operating loss widened to $42.9 million from $23.9 million a year earlier.

Product revenue collapsed 96% to $4.8 million. Canaan sold roughly 1 million terahashes per second of computing power during the quarter — a fraction of its hardware shipments in prior periods.

The mining segment did not offset the hardware decline. Mining operations generated $9.5 million in revenue, down from $30.6 million in the year-earlier quarter. The fleet produced 133 Bitcoin, compared with 267 BTC a year ago.

How did Canaan report $8 million in net income?

Despite the widened operating loss, Canaan recorded $8 million in net income, reversing a $27.7 million loss in the same quarter last year. The swing came entirely from balance-sheet items, not operations.

The company booked a $20.1 million fair-value gain on its cryptocurrency holdings and a separate $31.9 million gain on financial derivatives. Chief Financial Officer James Cheng said the gains mainly reflected Bitcoin's price increase at the end of September and were distinct from operating performance.

The distinction matters for how investors read the quarter. Strip out the $52 million in combined paper gains and the underlying hardware and mining business contracted sharply on both revenue lines.

What is happening with the Texas expansion?

Canaan is pushing capital into Texas mining and power infrastructure as its machine-sales business shrinks. Earlier this year it acquired a 49% stake in three West Texas Bitcoin mining projects for about $40 million. Those projects carried a combined installed capacity of 4.87 exahashes per second as of Sept. 30.

The Electric Reliability Council of Texas (ERCOT) conditionally classified Canaan's 1-gigawatt power project in Duval County as "Studied Load – Firm." The classification moves the project through the grid operator's interconnection queue, but the facility still requires further studies and approvals before construction can proceed.

A separate 1-gigawatt project in Zapata County remains in early development, with no interclassification milestone disclosed.

What does the balance sheet and buyback show?

Canaan held about 1,875 BTC as of Sept. 30, including 1,258 BTC pledged as loan collateral — meaning roughly two-thirds of its Bitcoin treasury secures borrowing.

The company also launched a $20 million share repurchase program, drawing on a $100 million authorization its board approved on Nov. 6. The buyback signals management's view that the stock trades below intrinsic value, though at 10% of the total authorization it represents a measured first step.

The operational picture puts pressure on the timeline. With hardware revenue at $4.8 million and mining revenue at $9.5 million, quarterly operating losses near $43 million cannot be sustained indefinitely without asset sales, further borrowing against the pledged BTC, or a recovery in machine demand. The pace of ERCOT's remaining studies and approvals on the Duval County project will determine when Canaan's gigawatt-scale power ambitions start generating revenue against that burn rate.