Bitcoin mining firm Canaan posts second quarter financials, with BTC mining revenue up 43% from Q1 2023, though net losses also rose 31% to $110 million.

Bitcoin mining firm Canaan has disclosed its unaudited financial outcomes for the second quarter of 2023. The report highlights robust increases in computing power sold and Bitcoin mining revenues. However, these achievements were accompanied by a substantial net loss of $110 million, representing a significant 31% surge compared to the previous quarter.

Listed on Nasdaq, the company delineated several factors contributing to heightened revenues, alongside a notable challenge involving an inventory write-down and equipment impairment amounting to a total of $54 million.

Canaan reported $73.9 million in earnings during Q2 2023, a rise from the $55.2 million in the preceding quarter. This encompassed $57.9 million generated from product sales and $15.9 million in revenue from Bitcoin mining activities.

Bitcoin mining earnings exhibited a 43.3% expansion in contrast to Q1’s $11.1 million, as Canaan’s Q2 2023 figures surpassed Q2 2022’s $7.8 million in BTC mining income, more than doubling it. The company attributed this upsurge to the rebound in Bitcoin values and the resulting escalation in Bitcoin incentives.

“The sequential increase was mainly driven by the Bitcoin price recovery and increased Bitcoin rewards across the network during the quarter.”

Canaan also reported significant growth in its total computing power sold, reaching 6.1 million terahashes per second, up 45% quarter-on-quarter, with the sector becoming a major driver of revenue for the company.

Canaan chief financial officer James Jin Cheng added that the losses included inventory write-down, provision for commitment reserve and impairment of property and equipment, which totaled $54.7 million.

“These non-cash accruals and provisions reflect our consideration of the latest selling price change, regulation changes in Kazakhstan, and the default by the partner at a U.S. project, which did not influence our cash flow.”

As of June 2023, Canaan’s listed cryptocurrency holdings included 1,125 BTC valued at $28.8 million. 747 BTC are owned by Canaan, while 378 BTC are attributed to customer deposits.

Canaan also reported that it had suspended 2.0 exahashes per second of its mining computing power based in Kazakhstan to ensure legal compliance with the Rules for Licensing of Digital Mining Activities coming into effect.

The company is in the process of obtaining a specialized license to continue its operations and expects a reduction in its Q3 BTC generation as a result of the offline hardware.

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