Canaan (NASDAQ:CAN) reported first-quarter financial results on Tuesday. The transcript from the company’s first-quarter earnings call has been provided below.
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Summary
Canaan reported Q1 2026 revenues of $62.7 million, aligning with guidance, despite a challenging market environment influenced by Bitcoin price declines and geopolitical uncertainties.
The company completed delivery and revenue recognition of a large North American order and expanded its mining business, maintaining positive cash flow even amidst low hash prices.
Canaan acquired a 49% stake in three mining sites in West Texas, leveraging low power costs, and is advancing R&D for its A16 series and next-gen products, focusing on energy plus computing infrastructure.
Operational highlights include a total installed hash rate increase to 11 exahash per second and maintaining a strong digital asset treasury with 1,808 Bitcoins and 3,952 Ethereum.
Management remains cautious for Q2, projecting revenues between $35 million and $45 million, emphasizing disciplined cost control, inventory management, and strategic focus on long-term energy and computing infrastructure growth.
Full Transcript
OPERATOR
Ladies and gentlemen, thank you for standing by and welcome to Canaan S first quarter 2026 earnings conference call. At this time, all participants are in a listen only mode. After the management prepared remarks, we will have a question and answer session. Please note that this event is being recorded now. I’d like to hand the conference over to your speaker today, Gwyn Lauber, Investor Relations for the company. Please go ahead, Gwyn.
Gwyn Lauber (Investor Relations)
Thank you. Operator. Hello everyone and welcome to our earnings conference call. Joining us today are Chairman and CEO Nangong Zhang and our Chief Financial Officer, Jin James Chang. Leo Wang, Vice President of Capital Markets and Corporate Development and Xi Zheng, Senior IR Manager will also be available during the question and answer session. Our CEO will start the call by providing an overview of the Company and performance highlights for the quarter. Our Chief Financial Officer will then provide details on the Company’s operating and financial results for the period before we open up the call for your questions. Before we begin, I would like to refer you to our Safe Harbor statement in our earnings press release. Today’s call will include forward looking statements. These statements include, but are not limited to, our outlook for the Company and statements that estimate or project future operating results and the performance of the Company. These statements speak only as of today and the Company assumes no obligation to revise any forward looking statements that may be made in today’s press release, call or webcast. Except as required by law, these statements do not guarantee future performance and are subject to risks, uncertainties and assumptions. Please refer to the press release and the risk factors and documents we file with the securities and Exchange Commission, including our most recent Annual report on Form 20F, for information on risks, uncertainties and assumptions that may cause actual results to differ materially from those set forth in such statements. In addition, during today’s call, we will discuss both Generally Accepted Accounting Principles (GAAP) financial measures and certain non Generally Accepted Accounting Principles (GAAP) financial measures which we believe are useful as supplemental measures of the Company’s performance. These non Generally Accepted Accounting Principles (GAAP) measures should be considered in addition to, and not as a substitute for or in isolation from Generally Accepted Accounting Principles (GAAP) results. You can find additional disclosures regarding these non Generally Accepted Accounting Principles (GAAP) measures, including reconciliations with comparable Generally Accepted Accounting Principles (GAAP) results in our earnings press release which is posted on the Company’s website. With that, I will now turn the call over to our Chairman and CEO, Nangong Jiang. Angie, please go ahead.
Nangong Jiang
Thank you, Guy. Hello everyone, this is Nangong, CEO of Canaan. Thank you for joining our earnings conference call today. James, our CFO and I are here at our Singapore headquarters to share our financial results and recent business Updates for the first quarter of 2026 Q1 of 2026 was a very challenging quarter. Bitcoin prices dropped sharply from the height at the beginning of the year and the hash price fell to very low levels. As a result, miners around the world became much more cautious with their investment after entering the second quarter. The market saw some recovery, but the recovery has still been limited. At the same time, uncertainties related to the Middle east situation, energy prices, global liquidity and the policies continue to keep the industry in a cautious environment. For us, a company going through a transition period, this kind of environment created a lot of pressure. But today I want to focus less on the difficulties we faced and more on what we did during the difficult times. I believe investors want to see whether we have strong execution discipline, operations and ability to navigate through market cycles. In the first quarter we completed several concrete tasks. First, we completed the final stage of production delivery and revenue recognition for our large order from a leading North American customer while entering the market downturn with a relatively light inventory position. Second, we continued expanding our mining business which still generated positive cash contribution even under extremely low hash price conditions while further increasing our digital assets. Treasury. Third, we completed the acquisition of ABC projects through a share exchange transaction, obtaining a 49% equity interest in three energized and operating mining sites with low power costs in West Texas. Fourth, we continue to advancing the R&D of a 16 series and our next generation products to prepare for the next mining equipment update cycle. Fifth, we continue shifting the company’s strategic focus from a pure mining machine business towards energy plus computing infrastructure. Taking together, these actions show that during a difficult market environment, we did not simply wait for the market to recover. Instead, we actively strengthened our survivability, improved our asset quality and expanded our long term strategic options. In the quarter we generated total revenues of 6.2.7 million US dollars in line with our previous guidance range. As of the end of the quarter we held 1808 bitcoins and 3952 Ethereum and our digital asset treasury reached another record high in mining machine sales. Industry demand was clearly under pressure. In the first quarter we sold 4.1 xhash per second of computing power with an average selling price of about 10.5 per terahash US dollar generating US$42.9 million in revenue. Many customers delayed purchase due to low hash price and high market uncertainty, and the market pricing also came under pressure. In this environment, we did not pursue short term growth through aggressive inventory buildup or lower quality orders. Instead, we placed higher priority on inventory control, cash flow management and order quality. This also reflects the operating discipline we have emphasized over the past several quarters. In Q4 of 2025 we captured the market window and secured a large North American order. With most of the deliveries completed in the first quarter of this year, we completed the final stage of execution. Through this the successful completion of this project, we further strengthened our brand reputation and customer base in the North American market. Mining machine business may not be the hottest story in the capital market today, but it remains the foundation of Kenya. As long as the Bitcoin network continues to operate and low cost power resources continue to exist around the world, miners will continue to need machines that are more efficient, more reliable and easy to deploy. Our job is is to run the mining machine business with stronger discipline and stay closer to the real needs of our customers. In the fourth quarter we continued advancing customized products and the system level solutions. Recently we expanded our collaboration with Kaiser by providing customized high density dashboard modules for its next generation emergent mining and computing systems. This type of partnership shows that leading customers are shifting from purchasing single standard manners to seeking integrated systems that are modular, maintainable, upgradable and adaptable to different operating scenarios. For Canaan, this is exactly where our long term strengths in ASIC design, system engineering, supply chain management and the global delivery can create value. In addition, as we announced earlier today, we stored approximately 8 megawatts of hydro cooled equipment to Nordic heating service provider to produce high grade hot water for district heating systems. Projects like this show that mining machines are gradually expanding beyond pure mining use cases into broader energy utilization scenarios. The combination of computing power, heat recovery and the local energy infrastructure is also an area we will continue to explore going forward in the consumer and SMB market. The main focus of Avenue Home series in the first half year has been channel expansion, customer reach and service system. Since the beginning of this year our home products have entered platforms including Best Buy, Canada’s online channel and Amazon. The consumer market is very different from the industrial mining machine market. Customers are not only about heart rate but also about noise level, stability, product design, easy for installation and after the sales service. We are currently working on the product upgrades for several Avalon home models and hope to launch them in the second half this year. We hope that better products, stronger sales channels and the year and shopping season together can help this business line contribute to higher quality revenue. Now let me move to our mining business. The mining environment in the first quarter was also very challenging. In January during the weak winter storm across North America, we voluntarily powered down and hotel operations in the certain regions to prioritize electricity supply to local residents and the power grid. We want to be trusted and responsible partner with a flexible computing load for the grid rather than adding additional pressure to inferiority of greatest strength. More importantly, even under a low hash price environment, our mining business continue to show strong competitiveness. During the quarter we generated 257 bitcoins in total and recognized US$19.12 million in mining revenue. From a cash operating perspective, this business continued to contribute positive liquidity inflow to the company. By the end of the quarter our global installed hash rate reached 11x hash per second up 66% year over year and 11 quarter over quarter. Our operating base continue to expand while our power and hosting cost remained relatively competitive. In April, our non GV installed hash rate remained around 11xhash per second with an average OEM power cost of about 4.4 US cents per kilowatt hour. At the same time, the ABCGV program also add 4.82 extra hash per second of installed hash rate and 120 megawatts of installed power capacity. I believe these numbers show one important thing, the mining business still has value even during the low point of cycle. It helps us to accumulate BTC and help us better understand the real operational needs and the pain points of miners. More importantly, it helps us to build real power consumption and operational capabilities as we continue to advancing in energy and computing infrastructure in the future. The most important development this quarter was the ABC projects. In late February, we acquired 49% equity interest in Elbows Bear and the Chief Mountain projects in West Texas from Cypher through a share exchange transaction together with 6840 Avalon A15 Pro mining machines. The biggest advantage of the ABC projects is the highly competitive power cost which is below $0.03 US dollar per kilowatt hour. Because of this cost advantage, the products maintained strong profitability and high uptime even during period of bitcoin price volatility. Among the ABC projects, the Elbows site has successfully completed grid interconnection and now operates under a hybrid model combining behind the meter wind power and wind power, which significantly improved over uptime. We have also been working closely with our partner WINDHQ to steadily upgrade the mining fleets at the site. At the end of April, the project’s installed hash rate increased from about 4.4 exit head per second to 4.82 exit head per second. In addition, the GV project also has potential for future power load expansion and we are currently evaluating related opportunities. Overall, the ABC projects operate under hybrid mining power model combining wind power and grid electricity with a total installed capacity of 120megawatts and the power cost below US$0.03 US dollar for kilowatt hour. The projects currently have an installed hash rate of approximately 4.82 exhaust per second. We have maintained a strong long term relationship with Cypher over the past years. The completion of the ABC project transaction also reflects our ability to take take over high quality assets released during the during Cyprus business transaction. Based on our long standing cooperation, we believe high quality power resources and the infrastructure capabilities will become increasingly important competitive advanced advantages in the industry over the long term. The completion of ABC projects not only future strengthened our footprint in North American energy and infrastructure, but also represented an important step in advancing our long term energy plus computing infrastructure strategy. Following the transaction, Cypher also became that became an important shareholder of cana, laying the foundation for deeper cooperation between the two parties in the future. This project has three important meaning for us. First, these are low cost power assets that are already energized, already operating and already generating computing power. In today’s North American market, assets with real operations are much more valuable than pipeline opportunities on paper. Second project is concrete result for our energy strategy in future strengthens our access to low cost power resources, mining operation experience and the local partnership networks in the United States. Third, it also provides us with stronger infrastructure capabilities and greater strategic flexibilities as we continue to explore future AI and HPC opportunities regarding our energy pipeline. We have indeed made some meaningful and encouraging progress. However, at Responsible Public Company, we do not believe these developments have yet reached the disclosure milestones required for us to provide more specific detail publicly. So at this stage I cannot share too much additional information, but I can reform our strategic view. High quality power resources will become one of the most important barriers in future computing infrastructure. Our goal is to secure power infrastructure that is controllable, developable and operable in regions that …
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