Bitcoin Miner Canaan’s Net Loss Shows Slow Improvement in Q1

Bitcoin miner, Canaan, shows on the investors-related page that this year, the net loss is $84.4 million, while it was $91.6 million in the previous year. Hence, a slender decrease in the loss is seen. A net loss is when total expenses, including fees, taxes, interest, etc., increase compared to the product’s actual value or income.

Canaan is a Chinese Bitcoin mining company whose net income is $65.1 million. It sells mining machines. It is headquartered in Singapore, but the operational head is in China. It is found in different countries in North America and South Asia. They sell machines in 21 countries.

ADS Down From $0.55 In the Previous Quarter

It is calculated that the diluted net loss per American Depository Share (ADS) is down from $0.55 in the previous quarter, while the diluted net earning per ADS in 2022 is $0.38.

The equity share of a non-U.S. company is ADS. A U.S. depositary bank regulates it. It is also available for purchase by U.S. investors. In this, the U.S. bank issues certificates representing shares in the foreign company for trade on the American stock exchange.

The ongoing bear market is still a reason for concern. The lost confidence of investors in the financial market and the unstable tax or interest rate carries the market towards high volatility.

This all contributes to slow economic growth, recession, and also geopolitical crises. But, the Canaan company claims to expand its business despite the ongoing bear market.

Revenue Made by Bitcoin Miner Canaan in Q1

The quarterly result is also affected by low market demands, crises in the banking system, and hindered productive revenue. The revenue made by the bitcoin miner company in Q1 is $55.1 million. Although, last year, the revenue was $58.3 million. The company totally accounts for $201.8 million in the same period of 2022.

Less revenue means less profit for the company, and this accounts for many other reasons. Decrease in sales and increase in expenses are some points easily highlighted. Further, the loss in revenue will continue in 2023.

The revenue of 2022 shows an increase of 130.2%, which was prior to $4.8 million. In the fourth quarter, the generated revenue from the mining activities rose to 3.3% from $10.7 million.

In the first quarter of 2023, the total operating cost was $38.1 million; in the fourth quarter of 2022 was $60.8 million; and, the bitcoin held by the company till March 31, 2023, are 623 BTC. It is worth $13.4 million.

Reasons For Sales Revenue Loss

James Jin Chang, the CFO of Canaan, reports the reasons for sales revenue loss in 2023. Some highlighted causes are due to a reduction in selling price, delays in payments, and shipping. He considered a series of U.S. bank failures also as one of the reasons. The mining business faces difficulty with the postponed increase of the installed hash rates.

According to the CFO of the company, they are managing to lessen the operating loss by 31.4%. The report also clarifies the decrease in investment in research and development. Previous expenditure was $33.4 million, while in the first quarter of 2023, it was reduced to $19.1 million.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing