Release Date: November 20, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Canaan Inc (CAN, Financial) achieved a total revenue of nearly $74 million in Q3 2024, marking a year-over-year growth of around 121% and the highest revenue in the past five quarters.
- The company successfully transitioned to mass production of its A15 series, with the A15 Pro model delivering 215 terahash per second of computing power.
- Canaan Inc (CAN) expanded its global sales reach, securing significant orders from North American mining companies such as CleanSpark and HIVE.
- The company's mining operations produced 147 Bitcoins, a 5% increase quarter over quarter, despite challenging market conditions.
- Canaan Inc (CAN) increased its Bitcoin holdings to a record high of 1,231 Bitcoins, reflecting strong confidence in Bitcoin's long-term value.
Negative Points
- The average Bitcoin price declined by over 7% sequentially, impacting miners' margins and creating a challenging market environment.
- Canaan Inc (CAN) recorded a non-GAAP EBITDA loss of $36.80 million, despite narrowing 46% year over year.
- The company faced a $22.9 million inventory write-down and prepayment write-down in Q3, primarily due to older series inventory value reduction.
- Operating expenses totaled $35 million, with a $6 million impairment of A13 series machines due to increased Bitcoin mining difficulty post-halving.
- The company continues to face risks and uncertainties related to market fluctuations and regulatory environments, particularly in North America.
Q & A Highlights
Q: How does the demand for mining equipment in 2025 compare to the post-halving period in 2020?
A: Nangeng Zhang, CEO: The patterns are similar, with demand typically rebounding after the market stabilizes post-halving. However, differences such as timing, Bitcoin price trends, and industry inventory levels exist. Demand continues to grow, with market fluctuations lessening and customers becoming more professional.
Q: What systems are in place to ensure meeting demand and avoiding shortages in ASICs or foundry space?
A: Nangeng Zhang, CEO: We focus on developing new products and securing production capacity by placing advanced orders with foundries. We completed a USD15 million financing to invest in mining sites in the US, and secured additional financing to expand capacity and meet growing market demand.
Q: Can you expand on growth efforts in the North American market and targets for the coming quarters?
A: Nangeng Zhang, CEO: We achieved significant growth in computing power sold and announced large-scale orders with North American companies. We are adjusting sales prices and increasing upfront payments for contract sales orders, anticipating stronger demand as the Bitcoin bull market progresses.
Q: What are the R&D spend expectations for 2025, particularly between the A16 series and other initiatives like the Kendryte series?
A: Nangeng Zhang, CEO: We focus on miner series development and are exploring AI advancements. We aim to provide compute services for Bitcoin mining and other applications using ASIC-optimized hardware. Our immediate focus is deploying more infrastructure to build a strong foundation for the future.
Q: How is the demand shifting from A14 to A15 series, and what is the demand for air-cooled versus immersion cooling systems?
A: Nangeng Zhang, CEO: The A15 series has more demand due to better performance and stability. The demand for liquid cooling models is increasing as customers use machines to generate heat and reduce noise. We plan to announce a liquid cooling system soon.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
