Q3 Results Show Sharp Mining Revenue Decline

Canaan Inc. recorded $14.5 million in revenue for the third quarter of 2026, a 90.4% decline from $150.5 million in the same period of 2025. The company generated $4.8 million from products revenue, primarily its mining machines, and $9.5 million from its own Bitcoin mining operations, with the remaining $0.3 million coming from other sources. Net income reached $8 million, up from a $27.7 million loss a year earlier, aided by $20.1 million in fair-value gains on cryptocurrency holdings and $31.9 million on financial derivatives. Basic and diluted earnings per ADS stood at $0.01.

The operating loss totaled $42.9 million. Canaan attributed the strong gains to Bitcoin trading higher on September 30, 2026, than on June 30. Management noted that the non-cash gains were separate from the underlying business performance, which remained challenged by softer demand for mining hardware and lower average selling prices.

Buyback Program Launched to Reflect Undervalued Shares

Following its third-quarter results, Canaan announced a $20 million initial share repurchase program as part of a broader $100 million authorization approved by its board on November 6, 2026, and set to remain valid for 12 months. The company plans to fund the program using cash and other available liquidity, with management deciding timing and amounts based on market conditions, operational needs, and existing commitments. Shares have declined about 75% year to date through early November.

Chairman and CEO Nangeng Zhang stated that the repurchase reflects the belief that the shares trade at levels materially below the strength of the business model and long-term potential. He indicated the company would pursue more active purchases as funds become available while maintaining sufficient liquidity for daily operations and infrastructure initiatives.

The program allows repurchases through open-market transactions, private deals, or block trades. Earlier in 2026, Canaan had sold 3,952 ETH and 54.5 BTC for about $13.9 million, using proceeds including $5.4 million to repurchase 13.6 million ADS in late August.

Bitcoin Holdings and Selective Monetization

As of September 30, 2026, Canaan held 1,875.5 BTC. Of this total, 1,258 BTC were pledged as collateral for secured loans, and 100 BTC were placed in a fixed-term product. The remaining 517.5 BTC appeared directly on the balance sheet at $43.7 million. The company also reported $72.8 million in cash and restricted cash at quarter-end, with $50 million supporting a letter of credit for infrastructure contracts and leaving approximately $22.8 million unrestricted.

Management has maintained a long-term digital-asset treasury while selectively monetizing portions to support share repurchases. This approach aligns with the company’s strategy to utilize cryptocurrency holdings without disrupting core operations.

Expansion into Texas Power and AI Infrastructure

Despite the mining slowdown, Canaan is advancing infrastructure projects focused on Texas energy. The company is developing two planned one-gigawatt power projects. The Duval County site received conditional “Studied Load – Firm” classification from the Electric Reliability Council of Texas, though further studies and approvals are required. The Zapata County project remains in the early development stage.

The infrastructure plans include $50 million set aside as collateral for the letter of credit tied to related contracts. Canaan is also advancing broader high-performance computing initiatives for artificial intelligence alongside its energy expansion.

Q4 Outlook and Business Adjustments

For the fourth quarter of 2026, Canaan expects revenue of $18 million to $22 million, consistent with the range provided in the third-quarter update. The company continues to balance its core Bitcoin mining and hardware activities with new ventures in power and computing.

Separately, the company has proposed changing its American depositary share ratio from one ADS representing 15 ordinary shares to one ADS representing 375 ordinary shares, equivalent to a 1-for-25 reverse ADS split expected around December 4, 2026.