Canaan Posts $8M Profit on Bitcoin Gains Despite 96% Drop in Miner Sales

Canaan Inc. (NASDAQ: CAN) reported $8.0 million in net income for the third quarter on Tuesday, supported by a $51.9 million fair-value gain from its bitcoin holdings and derivatives. That result came even as sales of its mining machines plunged 96%.

The unaudited financial results were submitted in a 6-K filing with the Securities and Exchange Commission. Total revenue slid to $14.5 million from $150.5 million a year earlier, comprising $4.8 million from product sales and $9.5 million from mining operations. The company delivered computing power equivalent to 1.0 million terahashes per second and produced 133 bitcoin through its mining activities.

The profit was not generated by the core business. Canaan recorded an $8.6 million gross loss and a $42.9 million operating loss. Chief Financial Officer Jin “James” Cheng attributed the $51.9 million fair-value gain to a rebound in bitcoin prices late in the quarter, describing it as “distinct from underlying operating performance.”

The $51.9 million figure combines a $20.1 million gain on cryptocurrency and a $31.9 million gain on financial derivatives. Canaan also reported $22.4 million in non-GAAP adjusted EBITDA, a metric that still incorporates those gains. Removing them would result in an adjusted EBITDA loss of roughly $29.5 million.

Chairman and CEO Nangeng Zhang cited “continued weakness in bitcoin mining equipment demand and intense industry pricing competition.” Product revenue fell from $13.6 million in the second quarter and from $118.6 million in the same period of 2025. The company attributed the decline to both lower shipment volumes and a reduced average selling price.

The treasury carries the quarter

Inventory-related write-downs amounted to $8.2 million, compared with $25.3 million in the prior quarter. Mining operations posted a gross margin of about 30% before depreciation, with an all-in power cost of roughly $0.043 per kilowatt-hour and approximately 10 exahashes per second of installed capacity outside joint ventures.

As of Sept. 30, Canaan held 1,875.5 bitcoin. Of that total, 517.5 coins were held outright, 1,258 were pledged as collateral for secured term loans, and 100 were placed in a fixed-term product. The company recorded $43.7 million in cryptocurrency assets and $114.2 million in cryptocurrency receivables.

The bitcoin inventory decreased by about 40 coins from the 1,915.5 reported at the end of the second quarter. Despite mining 133 coins during the period, the company likely moved roughly 173 bitcoin from its treasury. Zhang said Canaan is “selectively monetizing cryptocurrency holdings to fund share repurchases.”

On Nov. 6, the board authorized a new $100 million share buyback program to run for 12 months and launched an initial $20 million tranche under that authorization.

A 2-gigawatt Texas bet, and a reverse split

Canaan is working to reposition itself around power and compute infrastructure. Its 1-gigawatt project in Duval County, Texas, received a conditional “Studied Load – Firm” classification under ERCOT’s Batch Zero process, a grid-connection step Zhang noted remains “subject to further studies and approvals.” Another 1-gigawatt project in Zapata County is in early-stage development.

To back those initiatives, Canaan allocated $50 million of restricted cash as collateral for a letter of credit related to infrastructure contracts and made about $3.3 million in project prepayments. In October, it purchased a parcel of U.S. land for roughly $1.1 million. Cash at Sept. 30 stood at $72.8 million, with $50 million restricted and $22.8 million available without restrictions.

Canaan also intends to execute a 1-for-25 reverse ADS split, effective on or about Dec. 4, converting each ADS from 15 Class A ordinary shares to 375. The move is designed to help the company meet Nasdaq’s minimum bid price requirement.

For the fourth quarter, Canaan forecasts revenue between $18 million and $22 million.

This pivot toward power and compute infrastructure places Canaan alongside other public bitcoin miners. MARA sold 13,597 bitcoin to fund AI infrastructure, and Hyperscale Data sold its remaining coins for a Michigan data center.

The quarter leaves open the question of whether a paper gain on 1,875 bitcoin and a pair of early-stage Texas power projects can sustain Canaan until machine-buying customers return.