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Earnings call · Jun 2026 (Q2 FY26)

Canaan Q2 FY26 earnings call CAN

Sep 8, 2026 Source

Executive summary

Canaan Q2 FY26 — Revenue Miss, Strategic Capital Allocation, and Gigawatt Power Ambition

Canaan navigated a challenging Q2 FY26 with revenue below expectations due to weakened Bitcoin prices and increased competition. The company focused on cash management, strategic capital allocation including share repurchases, and optimizing its mining and power infrastructure assets. Despite near-term market caution, Canaan remains committed to its long-term strategy of securing gigawatt-scale power resources and developing compute-to-heat applications.

Highlights

5

  • Digital assets treasury reached a record high with 1,915 BTC and 3,952 ETH, valued at $112 million as of June 30.

  • Cash position improved to $66 million, up $23 million from Q1 FY26, despite lower revenue.

  • Mining operations generated $18 million in revenue, accounting for 55% of total revenue, with a 20% gross margin (excluding depreciation).

  • Secured $5.2 million in cash from Project ABC in Q2, with cumulative cash reaching $8.4 million as of August 31.

  • Confidence remains high in securing gigawatt-scale power resources by year-end 2026.

Concerns

5

  • Total revenues of approximately $32 million were below guidance range of $35 million to $45 million.

  • Miner sales weakened noticeably and elevated industry inventory levels intensified price competition, impacting product revenue of $14 million.

  • Recognized approximately $4 million of equity investment losses for Project ABC due to retirement of older mining machines.

  • Adjusted EBITDA was a loss of $74.9 million, broadly in line with the previous quarter, reflecting significant non-cash accounting adjustments.

  • Q3 FY26 revenue guidance is between $11 million and $15 million, reflecting continued caution on the near-term mining machine market.

Guidance & targets

CategoryTargetConfidence
Total Revenue
$11 million to $15 million
high materiality
Medium

Segment performance

SegmentRevenueYoYQoQMargin
Mining Machine Business
Product revenue declined due to softened demand and increased price competition from elevated industry inventory levels. The company adjusted pricing flexibly and focused on production based on actual sales and inventory management.
Computing power sold: 2.5 EH/sAverage selling price: $5.5 per TH/s
$14 million———
Mining Operations
Accounted for 55% of the company's total revenue in Q2. The business generated positive cash contribution and covered direct operating costs. The company adjusted deployed hash rate based on power prices and operating conditions.
Bitcoin mined: 243 BTCInstalled hash rate (non-JV projects): 10.05 EH/s (as of end of June)Average all-in power cost: 4.3 cents U.S. dollar per kilowatt hour (in June)
$18 million——20% gross margin (excluding depreciation)
Project ABC
The project continued mining machine upgrades and generated positive cash flow. A one-time loss of approximately $4 million in equity investment was recognized due to the retirement of older mining machines.
Installed hash rate: 4.85 EH/s (as of end of July)Hash rate increase: 10% from end of MarchCash received in Q2: $5.2 millionCumulative cash received: $8.4 million (as of August 31)
————
Avalon Home Products
Still a relatively small consumer product line, but seen as having long-term value by combining computing and heating for household users. Preparations for mass production are underway for the Q3 heating season.
$1 million———

Deals & partnerships

WindHQ Joint venture for Project ABC, focusing on mining machine upgrades and operational efficiency.

Partner for Project ABC, contributing site operations and power management experience. The partnership is focused on upgrading the mining fleet and improving project cash rate.

Risks & headwinds

Weakened Bitcoin mining economics Q2 FY26

Bitcoin price fluctuated between $62,000 and $58,000, hash price between ¢2.8 and ¢3.9 per terahash per second per day.

Mitigation:Tightened spending, strengthened cash flow and liquidity management, continued organizational finalization, adjusted pricing flexibly, focused on inventory management.

Declining miner sales and intensified price competition Q2 FY26, expected to continue in Q3 FY26

Product revenue was approximately $14 million; total revenues of $32 million were below guidance of $35 million to $45 million.

Mitigation:Adjusted pricing more flexibly, emphasized production based on actual sales, controlled new production according to real orders, focused on inventory management, cash flow, and order quality.

Elevated industry inventory levels Q2 FY26, expected to continue in Q3 FY26

Not explicitly quantified but stated as a factor intensifying price competition.

Mitigation:Focus on inventory management, control new production, and digest industry inventory.

Nasdaq minimum bid price non-compliance Until January 11, 2027

Granted an additional 180-day grace period with a deadline of January 11.

Mitigation:Will continue to monitor ADR trading price and take necessary actions to regain compliance and maintain listing status, including share repurchases.

Equity investment losses from Project ABC Q2 FY26

Approximately $4 million of equity investment losses recognized.

Mitigation:This was a one-time accounting loss related to the retirement of older mining machines as part of an upgrade to improve asset quality and cash generation.

What to watch in Q3 FY26

Q3 FY26 Total Revenue

Q3 FY26
Current Q2 FY26 revenue of $32 million
Target Between $11 million and $15 million

Why it matters

This guidance reflects continued market caution and will indicate the extent of ongoing pressure on miner sales and pricing.

Based on the current market and operating conditions, we expect total revenues for the third quarter of 2026 to be between $11 million and $15 million.

Q&A highlights

Can you provide color on the 1 gigawatt pipeline, including dual deployment for Bitcoin mining and HPC, and whether Canaan will pursue co-location or GPU cloud rental?

Canaan is advancing several power resource projects but cannot disclose specific details due to competitive reasons. Confidence in securing gigawatt-scale load by year-end 2026 remains. The company is open to co-location or GPU cloud rental, depending on specific project partnerships and capital capabilities, focusing on securing cost-advantaged power resources first.

“What we can say is our view from the Q4 2024.5 earnings call earlier this year based on the progress we have made so far, our confidence in securing gigawatt scale power resources the end of this year remains unchanged.”

asked by Logan Hennen · answered by Nangeng Zhang

2 min read 6 chapters

Detailed narrative

Market Headwinds and Strategic Response

Q2 FY26 was characterized by a difficult environment for the Bitcoin mining industry, with Bitcoin prices fluctuating significantly and hash prices remaining low. Localized conflicts and tightening mining policies further impacted miner investment willingness. This led to a noticeable weakening in miner sales and intensified price competition due to elevated industry inventory levels. In response, Canaan tightened spending, strengthened cash flow and liquidity management, and continued organizational finalization.

Mining Operations as a Key Contributor

The company's mining operations played a crucial role, generating approximately $18 million in revenue, accounting for 55% of total revenue. This segment maintained a 20% gross margin (excluding depreciation) and covered direct operating costs. Canaan adjusted its deployed hash rate based on power prices and operating conditions, allocating resources to projects with better economics. The installed hash rate in non-JV projects was approximately 10.05 EH/s, with an average all-in power cost of 4.3 cents per kilowatt hour in June.

Project ABC Progress and Optimization

Project ABC remains a key priority, focusing on cash generation and long-term returns. In Q2, the mining machine upgrade continued with partner WindHQ, generating positive cash flow and maintaining efficiency. Installed hash rate at Project ABC reached 4.85 EH/s by the end of July, up 10% from March. The project provided valuable experience in operations, power dispatch, and fleet upgrades, despite a $4 million equity investment loss due to the retirement of older machines.

Advancing Power Resources and AI/HPC Ambitions

Canaan is actively advancing long-term, cost-advantaged, and expandable power resources projects in North America, maintaining confidence in securing gigawatt-scale load by year-end 2026. The company is exploring dual deployment strategies for Bitcoin mining and HPC, and is open to co-location or GPU cloud rental routes, depending on project specifics and partnerships. This strategy leverages Canaan's experience in evaluating power infrastructure and working with local partners.

Capital Allocation and Share Repurchases

The company's digital assets treasury reached a record high, holding 1,915 BTC and 3,952 ETH, valued at $112 million. Canaan actively manages its capital, comparing holding digital assets, investing in infrastructure, and share repurchases. In late August, the company monetized all Ethereum holdings and 54 Bitcoins, generating $13.9 million, and used a portion to repurchase 13.6 million ADSs for $5.4 million. Year-to-date, $7.4 million has been deployed to repurchase 16.4 million ADSs.

Product Development and Compute-to-Heat

R&D efforts focused on the A16 series, emphasizing cost-effective air-cooled and high-temperature hydro-cooled models. On the consumer side, Avalon Home products, which generated $1 million in Q2 revenue, are being prepared for mass production in Q3, targeting the winter heating season. The company also continues to advance energy utilization partnerships like compute-to-heat, with a Nordic project validating hydro-cooled equipment for district heating and 2 MW of equipment in operation for node-based heating projects.

AI-generated summary of the company's earnings call. Not investment advice.