Canaan (NASDAQ:CAN) executives said the company delivered its strongest quarterly revenue in three years in the fourth quarter of 2025, driven by a major North American mining machine order and record computing power sold, even as Bitcoin prices and network hash rate volatility pressured industry profitability.
Quarterly results set a three-year high
Chairman and CEO Nangeng Zhang said the company managed its sales pace early in the quarter and secured a large order from a “major customer in North America,” while also continuing to expand self-mining and testing diversified mining partnerships through pilot projects. Total revenue in the fourth quarter reached $196 million, up 30.4% quarter-over-quarter and 121.1% year-over-year, and above the midpoint of the company’s guidance range of $175 million to $205 million.
CFO James Jin Cheng said fourth-quarter revenue was heavily concentrated in North America, with revenue from North American customers totaling $125 million, representing over 75% of total product sales. He said the results reflected continued recognition from “top-tier institutional miners” in the region.
Market volatility and margin pressures
Management repeatedly emphasized the difficult operating backdrop. Zhang described Bitcoin’s sharp swings during the period, noting it briefly reached approximately $126,000 in early October, then fell below $100,000 in mid-November and dropped below $90,000 by the end of December. At the same time, a wave of new hash rate came online, pushing the network to record levels and compressing miners’ margins.
Cheng said gross margin in the fourth quarter was $14.6 million, down from $16.6 million in the third quarter, citing three primary drivers: lower average selling prices tied to large institutional orders, weaker market demand following Bitcoin’s late-quarter decline, and a mix shift toward industrial machines versus the higher-margin Avalon Home Series. He also said the company recorded $13.9 million of inventory write-downs in the quarter due to “severe Bitcoin price volatility” in early 2026.
Below gross profit, Cheng said the year-end dip in Bitcoin prices resulted in a $44 million non-cash fair value loss, and the conversion of the final batches of preferred shares created another $15 million non-cash fair value loss. He added that there would not be any fair value loss related to preferred share conversions in the next quarter. These non-cash items contributed to an adjusted EBITDA loss of $40.5 million, according to management.
Mining operations, digital asset reserves, and liquidity
Despite prioritizing rig sales in the quarter, Zhang said self-mining continued to expand. At quarter-end, total installed hash rate rose 8.6% quarter-over-quarter to 9.91 EH/s, with 7.7 EH/s energized. The company mined approximately 300 bitcoins during the quarter.
At the end of 2025, management said Canaan held 1,750 bitcoins and roughly 3,951–3,961 ether (figures were stated slightly differently by the CEO and CFO during the call). Cheng said that as of Dec. 31, 2025, the holdings were valued at approximately $166 million based on year-end prices, and described the digital asset treasury as a “core pillar” of the company’s financial strategy and a source of long-term liquidity.
On cash and capital management, Cheng said operating expenses were $38 million in the fourth quarter, down 6% sequentially, reflecting organizational streamlining and a focus on core projects. He said the company generated approximately $75 million in cash inflow from sales and received approximately $80 million from a strategic straight equity financing and brief use of its renewed at-the-market program. The company used cash to make $100 million of payments to secure wafer supply and $89 million for production and operations, ending the quarter with a cash balance of $81 million.
Cheng also said the company repurchased approximately 2.8 million ADSs for $2 million under its $30 million stock repurchase program announced in December, and plans to continue executing opportunistically.
Product roadmap and manufacturing footprint
Zhang highlighted product development progress, including the October launch of the A16XP, which he said delivers over 300 TH/s per unit with power efficiency of 12.8 J/TH. In response to analyst questions, management said A16 machines were being sent to customers for testing, with mass production preparations underway. The company expects mass production to start after the Lunar New Year holiday and to begin volume ramp-up by the end of the first quarter. Management also said it is developing liquid-cooled and immersion-cooled versions to match different customer deployment needs.
Regarding foundry and costs, Cheng said global advanced-node foundry capacity remains tight due to demand from AI-related sectors, but Canaan believes its access to wafers and key components is “stronger than the industry average” based on long-term partnerships, rolling forecasts, and prepayments. He said unit costs for A16 face upward pressure versus A15 in wafers, packaging, and certain system components, but the company plans to offset those pressures through yield improvements, testing optimizations, and more efficient system design.
On manufacturing footprint and compliance, Zhang said the company has built production and assembly setups across multiple regions including mainland China, Malaysia, and the U.S., and noted that its self-mining operations are “100% outside China.” He said the company built “thousands of machines” through its U.S. manufacturing facilities last year and intends to review the supply chain to make it safer for U.S. customers and expand U.S.-based production.
2026 priorities, energy initiatives, and guidance
Looking ahead, management outlined a strategy centered on execution and long-term capability building, emphasizing power and computing infrastructure and a more systematic approach to consumer and small-to-medium business (2C/SMB) channels.
- Power and infrastructure: Zhang said the company plans to shift from an opportunistic, asset-light approach to a more systematic upstream development path, prioritizing applying for power directly rather than bidding for third-party capacity. He said Canaan has made progress on a U.S. pipeline and is confident it can secure “substantial load” by year-end 2026, potentially reaching gigawatt scale, while using partnerships and project financing rather than “a one-off large-scale capital outlay.” He also described Bitcoin mining and AI HPC colocation as complementary at the infrastructure level.
- Energy proof-of-concepts: Zhang discussed a Canada initiative involving converting flared natural gas at wellheads into computing power, calling it an initial step toward deeper participation in energy infrastructure. On a separate question about scalability and market size, he said individual projects typically range from “a few megawatts to several tens of megawatts,” cautioned against overly optimistic multi-gigawatt TAM assumptions given fragmented business models, and said near-term focus includes data/methodology standardization, productization/modularity, and replication once pilots mature.
- 2C/SMB expansion: Zhang said the company sees potential in consumer products but plans a cautious approach prioritizing stability, noise control, ease of use, and service, alongside investments in online partnerships, offline distribution, after-sales service, and user engagement systems.
For first-quarter 2026, Zhang and Cheng said they are taking a cautious view amid market uncertainty and miners’ “wait-and-see” behavior after Bitcoin’s declines. The company guided for total revenue of $60 million to $70 million. Cheng added that on Feb. 5, Bitcoin fell to $60,000, which he said triggered shutdowns for higher-cost miners and pressured profitability across the industry, including Canaan’s own mining operations. Management said the priority in the near term is maintaining liquidity and de-risking the balance sheet while preparing for a potential market recovery later in the year.
About Canaan (NASDAQ:CAN)
Canaan Inc is a China-based technology company specializing in the design and manufacture of high-performance computing hardware for the digital currency and blockchain industry. The company’s core business revolves around application-specific integrated circuit (ASIC) miners, which are purpose-built machines optimized for cryptocurrency mining. By focusing on energy efficiency and processing power, Canaan’s mining rigs aim to deliver competitive hash rates while managing power consumption in large-scale operations.
The flagship product line, known as AvalonMiner, encompasses a range of models tailored to different scales of mining activity, from small-scale hobbyist setups to industrial farms.
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