<p>Canaan Inc.
(<a href=”https://www.financemagnates.com/tag/canaan/” target=”_blank” rel=”follow”>NASDAQ:CAN</a>), a cryptocurrency mining hardware manufacturer, reported its
quarterly numbers on Tuesday. During the three-month period that ended on 31
December 2022, the crypto company achieved a <a href=”https://www.financemagnates.com/terms/c/crypto-mining/” class=”terms__main-term” id=”b7de0d78-81b9-460d-b33d-311d7d0dff0e” target=”_blank”>crypto mining</a> revenue of $10.5
million, significantly higher than in the previous quarter and the same period
in 2021. However, overall revenues turned out to be considerably lower on a quarterly
and a yearly basis.</p><p>Canaan’s Revenues Going
Down in Q4</p><p>While
mining revenue represented an increase of 16,3% quarter-over-quarter and a
staggering 368,2% year-over-year, the revenue for the mining hardware manufacturer continued its 2022 slump.</p><p>The
revenues in the fourth quarter came in at $56.8 million, translating to 59.9%
QoQ and 82.1% YoY decreases. The product revenue also went down to $46.3
million, representing a slump of 65.1% compared to the product revenue <a href=”https://www.financemagnates.com/cryptocurrency/canaan-feels-the-bitcoin-blues-net-income-down-90/” target=”_blank” rel=”follow”>reported
in the third quarter of 2022</a>, and a decrease of 85.3% compared to the product
revenue reported in the same period of 2021.</p><p>The decline
in QoQ and YoY revenue was primarily due to the decrease in total computing
power sold and the lower selling price due to the decreased value of Bitcoin. </p><p>”We
went through a tough fourth quarter as the further sinking <a href=”https://www.financemagnates.com/terms/b/bitcoin/” class=”terms__secondary-term” id=”261088a9-0f41-4202-a73c-31f75ba6bd93″ target=”_blank”>bitcoin</a> price during
the quarter led to lackluster market demand for mining machines as we expected.
Amidst the hard time, we delivered topline results of RMB392 million, exceeding
our previous guidance range, thanks to our improved mining business operation
and our constant exploration of clients’ needs,” Nangeng Zhang, the Chairman
and Chief Executive Officer of Canaan, commented.</p><p>Canaan’s
shares lost 60% of their value in 2022, rebounding currently around 22% from near-record lows. The company’s valuation is a long way from
its record high of $40 per share and is at $2.5 per share before Tuesday’s US session starts after falling more than 8% on Monday.</p><p>Visibly Lower Gross Profit
for Canaan in 2022</p><p>2022 was a challenging year for the entire mining industry and equipment manufacturers. Subsequent quarters saw declining revenues, with the increasing difficulty of mining and decreasing Bitcoin prices severely cutting revenue margins. After a record-breaking 2021, last year brought significantly lower income for the industry, <a href=”https://www.financemagnates.com/cryptocurrency/why-bitcoin-miners-made-6-billion-less-in-2022/” target=”_blank” rel=”follow”>declining by $6 billion</a>.</p><p>As a
result, Canaan reported a significant decrease in revenue and gross profit for
the full year 2022. Gross profit decreased to $253.4 million from $411.2
million reported in 2021.</p><p>„Despite
the challenging market environment, 2022 was a notable year of milestones for
our company. We expanded globally and established overseas supply chains and
headquarters in Singapore. Our teams gained experience in operating our mining
business in various overseas locations,” Zhang added.</p><p>However, it
is worth noting that Canaan currently tries to refocus its core business,
moving to sel-fmining rather than selling mining rigs. The overall mining
revenue for 2022 was significantly higher than the year before, reaching $31.7
million. Although these figures are still far from the revenue generated from
the sale of crypto miners, further positioning in this direction in the coming
quarters should result in a clearer diversification of revenue classes.</p><p>Hive
Blockchain, another publicly-listed crypto company, <a href=”https://www.financemagnates.com/cryptocurrency/hive-blockchain-reports-90m-loss-in-q4-2022-amid-lower-bitcoin-prices/” target=”_blank” rel=”follow”>reported its Q4 2022
results last week</a>, showing a $90 million loss for the period. Hive is also
looking for ways to diversify its revenue, and <a href=”https://www.financemagnates.com/cryptocurrency/hive-blockchain-reports-btc-production-and-bets-od-grid-balancing/” target=”_blank” rel=”follow”>according to a separate trading
update</a>, it was able to earn $180,000 from balancing the grid.</p>
This article was written by Damian Chmiel at www.financemagnates.com.
