Canaan Posts $8M Profit on Bitcoin Gains as Mining Rig Sales Fall 90%
Canaan Inc. (Nasdaq: CAN) reported third-quarter revenue of $14.5 million, down 90% year over year, and GAAP net income of $8.0 million driven by a $51.9 million fair-value gain on its bitcoin holdings and derivatives. The company said the gains were separate from operating performance, which included an operating loss of $42.9 million.
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The Headline Numbers
Canaan reported third-quarter 2026 total revenue of $14.5 million, down from $150.5 million a year earlier, according to its unaudited results filed with the SEC in a 6-K on Tuesday. The result landed near the low end of its earlier guidance range of $11 million to $15 million, management said.
The company posted GAAP net income of $8.0 million, or $0.01 per share. Sources differ on how to characterize the composition of that profit. Crypto Briefing attributes it largely to gains on Bitcoin holdings and financial derivatives, while Bitcoin Magazine breaks it out precisely: a $20.1 million gain on cryptocurrency and a $31.9 million gain on financial derivatives, totaling $51.9 million.
Operations Versus Paper Gains
Canaan's operating figures are weaker than the bottom line suggests. Bitcoin Magazine reports an $8.6 million gross loss and a $42.9 million operating loss for the quarter. Chief financial officer Jin "James" Cheng described the fair-value gain as "distinct from underlying operating performance," attributing it to a bitcoin price recovery toward quarter-end.
Non-GAAP adjusted EBITDA came in at $22.4 million, but that figure includes the fair-value gains. Bitcoin Magazine calculates that excluding them, adjusted EBITDA would have been a loss of about $29.5 million. Crypto Briefing reaches the same conclusion, framing the earnings quality question as the central issue for investors.
Hardware Demand and Product Revenue
Product revenue was $4.8 million, down from $13.6 million in the second quarter and $118.6 million in the same period of 2025. Chairman and CEO Nangeng Zhang cited "continued weakness in bitcoin mining equipment demand and intense industry pricing competition," and the company attributed the decline to lower volumes and a lower average selling price. Canaan recorded $8.2 million of inventory write-downs, down from $25.3 million in the prior quarter.
Mining operations contributed $9.5 million of revenue. Canaan reported a mining gross margin of about 30% before depreciation, an all-in power cost of roughly $0.043 per kilowatt-hour, and it mined 133 bitcoin during the quarter.
Treasury Drawdown and Buybacks
Canaan held 1,875.5 bitcoin as of September 30. Of that total, 517.5 were owned outright, 1,258 were pledged for secured term loans, and 100 sat in a fixed-term product. Bitcoin Magazine notes the treasury fell about 40 coins from the 1,915.5 reported at the end of the second quarter, implying roughly 173 bitcoin were moved off the balance sheet despite the 133 mined. Zhang described this as "selectively monetizing cryptocurrency holdings to fund share repurchases."
On November 6 the board approved a $100 million share repurchase authorization over 12 months and launched an initial $20 million program under it.
Power Infrastructure Pivot
Canaan is repositioning toward 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, which Zhang said remains subject to further studies and approvals. A second 1-gigawatt project in Zapata County is in early-stage development. Canaan set aside $50 million of restricted cash as collateral for a letter of credit tied to infrastructure contracts and made about $3.3 million of project prepayments. It ended September with $72.8 million in cash, of which $22.8 million was unrestricted.
The company also plans a 1-for-25 reverse ADS split, effective on or about December 4, to address Nasdaq's minimum bid price requirement. For the fourth quarter it guided to revenue of $18 million to $22 million.
Industry Context
Bitcoin Magazine places Canaan alongside other public miners shifting toward AI and data infrastructure, citing MARA's sale of 13,597 bitcoin to fund AI buildout. Canaan's CEO's remarks on equipment demand suggest the hardware weakness is industry-wide rather than specific to the company. Both sources note that the $97.6 million second-quarter loss illustrates how quickly results can swing with bitcoin's price.
Why It Matters
For Traders
CAN's reported profit depends on bitcoin's price at quarter-end, so near-term results could swing sharply if bitcoin moves against the company's holdings.
For Investors
Operating losses of $42.9 million with profit from mark-to-market gains raise earnings-quality questions that matter more than the headline net income figure.
For Builders
Canaan's treasury drawdown and shift to power projects show miners using bitcoin holdings and grid interconnection rights as collateral and capital sources for infrastructure.
This article is for information only and is not financial advice. Read the full disclaimer.
