Canaan Hardware Revenue Falls 96% as Buyback Begins

Canaan’s mining-equipment business contracted sharply in the third quarter as the Bitcoin hardware maker adopted a more flexible approach to its cryptocurrency treasury and launched a new share repurchase program. Products revenue fell to $4.8 million from $118.6 million a year earlier, a decline of roughly 96%. The company attributed the drop to fewer computing-power sales, lower average selling prices and weak market demand in its unaudited third-quarter results. Mining operations generated another $9.5 million, taking total quarterly revenue to $14.5 million.

The weak hardware numbers came as Canaan’s board approved up to $100 million of new share repurchases over 12 months beginning November 6. The company launched an initial program of up to $20 million on November 10. Canaan says future repurchases may be financed with cash and other available liquidity, while management has also authorized selective sales from its digital asset treasury. The company has not committed to deploying the entire $100 million authorization, with purchases dependent on market conditions, working-capital requirements and other capital needs.

Crypto Gains Offset a Large Operating Loss

Canaan’s bottom line looked considerably stronger than its core operating performance. The company recorded a $42.9 million operating loss and an $8.6 million gross loss during the quarter, but finished with GAAP net income of approximately $8 million. That reversal largely reflected $51.9 million in combined fair-value gains, consisting of $20.1 million from cryptocurrency and $31.9 million from financial derivatives. Management attributed the gains primarily to Bitcoin’s higher September 30 price relative to June 30 and explicitly distinguished the accounting uplift from underlying operating performance.

The company has already demonstrated how crypto holdings can serve as a source of corporate liquidity. In August, Canaan sold 3,952 ETH and 54.5 BTC for about $13.9 million and subsequently deployed $5.4 million to repurchase 13.6 million ADSs. The policy represents active treasury management rather than abandonment of Canaan’s stated long-term digital asset strategy. Similar balance-sheet flexibility has appeared elsewhere in mining, including MARA’s decision to sell Bitcoin for operations and debt management before later reported accumulation.

Canaan ended September with a reported Bitcoin treasury of 1,875.5 BTC, but those coins have different balance-sheet classifications. Cryptocurrency assets primarily comprised 517.5 BTC worth $43.7 million, while another 1,258 BTC pledged against secured term loans and 100 BTC transferred into a fixed-term product were classified as cryptocurrency receivables. The headline treasury balance therefore should not be interpreted as 1,875.5 BTC of unrestricted Bitcoin immediately available for sale. Active treasury structures are also visible at other miners, with CleanSpark reporting Bitcoin posted as collateral or tied to derivative receivables.

Cash Is Also Committed to Infrastructure

Canaan reported $72.8 million of cash and restricted cash at quarter-end, but $50 million of that amount was restricted as collateral for a letter of credit supporting long-term infrastructure commitments. The balance sheet separately listed $22.8 million in cash. The new $20 million repurchase program consequently sits alongside substantial existing infrastructure commitments rather than against an entirely unrestricted $72.8 million cash pool. Canaan also spent approximately $1.1 million in October on U.S. land intended to support future power development.

Those investments form part of a broader shift toward energy and computing infrastructure. Canaan is advancing a 1 GW project in Duval County, Texas, and another 1 GW early-stage project in Zapata County while retaining its mining hardware and self-mining businesses. The strategy follows an industry-wide effort to extract more value from power infrastructure as Bitcoin miners increasingly explore AI and high-performance computing workloads. For Canaan, however, those projects remain development initiatives and should not yet be treated as replacement revenue for the collapsing hardware business.

Canaan expects fourth-quarter revenue of $18 million to $22 million, leaving near-term results well below the scale recorded a year earlier. The company’s immediate financial strategy now combines a weakened mining-machine business, Bitcoin production, infrastructure investment and selective treasury monetization to fund shareholder returns. How much of the broader $100 million authorization is ultimately exercised will depend on whether those competing uses of liquidity leave additional capital available for repurchases.