Canaan (NASDAQ:CAN) said its first-quarter 2026 results reflected a difficult operating environment for bitcoin miners, as lower bitcoin prices, weak hash prices and geopolitical and energy-market uncertainty weighed on demand for mining equipment.
Chairman and Chief Executive Nangeng Zhang told investors that the quarter was “very challenging,” noting that bitcoin prices fell sharply from early-year highs and that miners around the world became more cautious with capital spending. Still, Zhang said the company focused on execution, inventory discipline, mining operations and energy infrastructure during the downturn.
Canaan generated first-quarter revenue of $62.7 million, in line with its prior guidance. Chief Financial Officer James Jin Cheng later rounded the figure to $63 million in his remarks. Product revenue was $43 million, while mining revenue was $19 million.
Mining Machine Sales Decline as Customers Delay Purchases
Canaan sold 4.1 exahash per second of computing power during the quarter at an average selling price of about $10.5 per terahash, producing $42.9 million in mining machine revenue. Zhang said many customers delayed purchases because of low hash prices and high market uncertainty, while pricing in the market came under pressure.
North American customers accounted for more than 80% of total product sales, up from 75% in the prior quarter, according to Cheng. Canaan also completed the final stage of production, delivery and revenue recognition for a large order from a leading North American customer that had been secured in the fourth quarter of 2025.
Zhang said Canaan chose not to pursue short-term sales growth through aggressive inventory buildup or lower-quality orders, instead prioritizing inventory control, cash flow and order quality.
The company also continued work on its Avalon A16 series mining machines. Zhang said some customers received sample units and began testing during the quarter. The Avalon A16 XP, launched in the fourth quarter of 2025, delivers up to 300 terahash per second per machine with energy efficiency as low as 12.8 joules per terahash, according to the company.
Mining Operations Grow Despite Lower Bitcoin Prices
Canaan’s mining business generated 257 bitcoins in the quarter and recorded $19.12 million in mining revenue. Zhang said the business continued to contribute positive cash liquidity even under low hash price conditions.
By the end of the quarter, Canaan’s global installed hash rate reached 11 exahash per second, up 66% year over year and 11% sequentially. Cheng said the growth was driven mainly by North America, where the company’s installed mining hash rate was 7.7 times the level of the first quarter of 2025. North America represented 53.6% of Canaan’s quarterly global hash rate, compared with 11.5% a year earlier.
Canaan ended the quarter holding 1,808 bitcoins and 3,952 Ethereum. Cheng said the market value of the company’s bitcoin holdings was $121 million as of March 31, based on the quarter-end bitcoin price, and had increased to nearly $140 million after a subsequent price recovery toward $77,000.
ABC Project Expands North American Energy Footprint
A major focus of the call was Canaan’s acquisition of a 49% equity interest in the Alborz, Bear and Chief Mountain mining projects in West Texas, referred to as the ABC Projects. The transaction was completed in late February through a share exchange with Cipher, and included 6,840 Avalon A15 Pro mining machines.
Zhang said the projects have 120 megawatts of installed power capacity, an installed hash rate of approximately 4.82 exahash per second as of the end of April, and power costs below $0.03 per kilowatt hour. The Alborz site has completed grid interconnection and operates under a hybrid model using behind-the-meter wind power and grid power, which Zhang said improved uptime.
Cheng said Canaan issued approximately 54 million ADSs with a total fair value of $25 million in the share-based transaction. Of that amount, $14 million was allocated as an equity investment for the 49% stake in the joint venture, while $11 million was allocated to mining units now recorded as property, plant and equipment.
Management described the acquisition as part of Canaan’s shift toward an “energy plus computing infrastructure” strategy. Zhang said energized, operating low-cost power assets are more valuable than “pipeline opportunities on paper,” and that the projects give Canaan more flexibility as it evaluates future AI and high-performance computing opportunities.
Inventory Write-Down Drives Gross Loss
Canaan reported a gross loss of $23 million in the quarter, which Cheng said was entirely driven by a $25 million non-cash inventory write-down recorded in product costs. Excluding that impact, adjusted gross profit was approximately $1 million, representing a break-even adjusted gross margin.
Operating expenses totaled $31 million, down 11% from the prior quarter and 18% from the same period a year earlier. Research and development expenses were $15 million, down 19% year over year. Selling expenses fell 59% to $1 million, while general and administrative expenses declined 11% to $15 million.
The company also recorded a $41 million fair value loss on its digital asset holdings, reflecting the decline in bitcoin from approximately $87,000 at the end of 2025 to $67,000 at the end of the first quarter. Cheng emphasized that the fair value adjustment was not a realized cash loss because Canaan continues to hold the assets.
Adjusted EBITDA loss for the quarter was $76 million. Canaan ended the quarter with $43 million in cash, down from $81 million in the prior quarter. Cheng said the decline was driven by collection timing and planned capital outlays, including $57 million for manufacturing and operations, $6 million for wafer procurement and $2 million for share repurchases. He added that Canaan collected $42 million in cash receivables from miner sales in April.
Second-Quarter Outlook Remains Cautious
Canaan guided for second-quarter revenue of $35 million to $45 million. Zhang said bitcoin and hash prices had recovered somewhat from first-quarter lows, but miners remained conservative in their investment decisions. He also cited energy prices, geopolitical developments and policy uncertainty as ongoing factors affecting customers.
During the question-and-answer session, Zhang said the mining equipment market would likely show a more meaningful recovery if hash price rose to about $40 to $45 per exahash per day, while a level around $55 could create much stronger demand. He said recent hash price levels remained in the low $30s after pulling back from a move closer to $40.
Management also discussed Canaan’s Avalon Home products, partnerships with Tether on customized mining modules, and an approximately 8-megawatt hydro-cooling equipment sale to a Nordic heating service provider for district heating applications. Zhang said the company is working on upgrades for several Avalon Home models and hopes to launch them in the second half of the year.
Looking ahead, Zhang said Canaan remains in a difficult transition period but is focused on reducing inventory, controlling costs, advancing new products, expanding mining operations and securing low-cost power resources.
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.
