Equipment revenue fell 96% from a year earlier while the hardware maker's own mining brought in nearly twice as much. The $8 million profit came from fair-value and derivatives gains, not from operations, which lost $42.9 million.
Canaan reported third-quarter revenue of $14.5 million on Tuesday, down 90% from $150.5 million a year earlier, as sales of its bitcoin mining machines all but stopped. Products revenue, the line that covers mining equipment, came to $4.8 million against $118.6 million in the same quarter of 2025.
The collapse leaves the Nasdaq-listed manufacturer taking in more from mining bitcoin itself than from selling the machines that do it. Canaan's mining revenue was $9.5 million in the quarter, nearly twice its equipment sales. A year earlier the balance ran the other way by close to four to one.
That reversal reflects a shrinking hardware business rather than a growing mining one. Mining revenue fell 69% from $30.6 million a year earlier, and Canaan produced 133 bitcoin against 267 in the third quarter of 2025. The company sold 1.0 million TH/s of computing power over the three months, about one exahash. Chairman and Chief Executive Nangeng Zhang pointed to "continued weakness in bitcoin mining equipment demand and intense industry pricing competition."
Canaan still reported net income of $8 million, against a $27.7 million loss a year earlier and a $97.6 million loss in the second quarter. None of it came from the operating business. Loss from operations was $42.9 million, and the company booked a gross loss of $8.6 million, meaning revenue did not cover the direct cost of producing it. The profit rests instead on a $20.1 million fair-value gain on cryptocurrency holdings and a $31.9 million gain on financial derivatives, as The Block noted in its account of the results.
Chief Financial Officer Jin "James" Cheng tied those gains to bitcoin's price at the end of September and drew the distinction himself. "We recognize that this non-cash gain is distinct from underlying operating performance," he said. Bitcoin traded lower through the weeks that followed, falling below $74,000 in early November. Non-GAAP adjusted EBITDA was $22.4 million, against negative $74.9 million in the second quarter.
Two other lines moved the reported figures. Depreciation and amortization fell to $3.6 million from $14.0 million a year earlier, and the company took $5.7 million of impairment on property, equipment and software. Cheng put the mining operation's gross margin at about 30% before depreciation; the group still reported its $8.6 million gross loss.
Canaan held 1,875.5 bitcoin at September 30, and most of it is encumbered. A total of 1,258 coins were pledged against secured term loans, 100 sat in a fixed-term product, and 517.5 were owned outright, with a fair value of $43.7 million. That leaves roughly two thirds of the treasury committed to lenders, a different posture from the listed miners that have been selling into the market. MARA sold 13,597 bitcoin to clear $750 million of loans, and Hut 8 sold 2,148 to fund share repurchases.
Canaan's own board authorized up to $100 million of repurchases over 12 months starting November 6, with an initial program of up to $20 million. It did so while operations were loss-making and two thirds of the bitcoin treasury was pledged to lenders.
The hardware slump has a demand side. Public miners have been trimming bitcoin capacity or redirecting power to AI tenants rather than buying rigs. Cipher's mining revenue fell 71% in its latest quarter while AI leases brought in $5.9 million, and IREN still expects to mine into 2027 despite a December exit target. Canaan sells into that market.
The company now describes itself as "an innovator in compute and energy infrastructure," and the quarter's disclosures put most of the forward story in Texas power rather than chip sales. Canaan bought Cipher Mining's 49% stake in three West Texas bitcoin mining projects earlier this year for about $40 million, and those projects had a combined installed hashrate of 4.87 EH/s at the end of September. A proposed 1 GW site in Duval County received a conditional "Studied Load – Firm" classification under ERCOT's Batch Zero process, and a second 1 GW project in Zapata County is in early development.
Canaan guided fourth-quarter revenue to between $18 million and $22 million, above the third quarter's $14.5 million. The Duval County classification is conditional, with further studies and approvals still outstanding.
