Canaan shares plunge after Q1 loss; CEO cites Middle East

Canaan, the Singapore-based bitcoin miner and hardware maker, reported a first-quarter net loss of $88.7 million and revenue of $62.7 million for the three months ended March 31. Revenue dropped 68% from $196.3 million in the prior quarter. The company posted its second consecutive quarterly loss. Shares fell more than 13% to about $0.418 after Tuesday’s opening bell, nearing a recent low of $0.38.

Most revenue came from Canaan’s product unit, which generated $42.9 million as the company completed final deliveries under a major U.S. order. Canaan mined 257 bitcoin during the quarter; production was reduced by weather-related energy curtailments in North America.

Management reduced operating expenses to $31.4 million from $38.2 million in the prior quarter and cut staffing costs by $2.1 million. Executives described those changes as intended to strengthen the company’s survivability. Treasury holdings grew to 1,807 bitcoin and 3,951 ether, with a combined value of about $146 million at quarter end.

During the quarter Canaan acquired a 49% interest in Cipher Mining’s ABC Projects in West Texas to expand access to U.S. power infrastructure. Management linked the stake to efforts to develop high-performance computing and AI infrastructure while decreasing emphasis on pure bitcoin mining and hardware sales.

Zhang warned, “Uncertainties related to the Middle East situation, energy prices, global liquidity and the policies continue to keep the industry in a cautious environment.” He connected the geopolitical tensions, higher energy costs and tight liquidity to pressure on miners’ profitability and outlook.

Executives reported that completing the U.S. product deliveries affected revenue, inventory and cash flow during the quarter. Company leaders added they will pursue partnerships and projects that provide access to more stable power supplies for computing workloads.