Canaan hardware maker Canaan posted a net loss of $ 5.6 million in Q1 2020, despite a massive increase in earnings. According to the company’s recently released financial report, gross profit increased by 417% from the first quarter of 2019, while total net income increased by 44%.
Unchecked report shows Canaan suffered massive losses in Q1
According to a earnings report released earlier today, mining hardware manufacturer Canaan lost $ 5.6 million in the first fiscal quarter of the year. The financial results published by the company end on March 31 and include both operating and financial highlights.
The Bitcoin company’s net loss for Q1 2020, while it was high at 39.9 million yuan, still represents a significant drop from the 67.9 million yuan loss the company reported in Q1 2019.
On the other hand, the company’s total net sales increased significantly last quarter, with the report growing 44.6% year over year to 68.3 million yuan, or $ 9.6 million. The company reported net sales of 67.9 million yuan in Q1 2019.
“Despite growing macroeconomic uncertainties, we have continued our growth momentum to deliver better-than-expected financial results for the first quarter of 2020,” said Quanfu Hong, Canaan’s chief financial officer.
Canaan reports a fourfold increase in gross profit
In the company’s report, Hong explained that Canaan’s net sales increase was a direct result of an increase in the total processing power sold and the average sales price per terrahash in the last quarter.
The report also quoted that there has been a 417% increase in gross profit in Canaan year-on-year, with the company pocketing 2.4 million yuan, or about $ 330,000. The company made 500,000 yuan, or about $ 70,000, in the first quarter of last year.
Zhang Nangeng, Canaan’s CEO and chairman, said in a profit call that the overall mining market situation was not “too good” last year, which is why the company cut the price of its mining hardware by more than 50%. Many have also attributed a lack of interest in mining equipment due to the halving of Bitcoin as the primary driving force behind Canaan’s poor performance.
Demand for mining equipment will rise again for Canaan if it can stay ahead of the innovation in the mining equipment production curve. The company’s biggest competitor in Bitcoin startup Bitmain remains the market leader.