Canaan Inc. Reports Unaudited Third Quarter 2021 Financial Results
Written by ABC AUDIO on November 16, 2021
BEIJING, Nov. 16, 2021 /PRNewswire/ — Canaan Inc. (NASDAQ: CAN) (“Canaan” or the “Firm”), a number one high-performance computing options supplier, immediately introduced its unaudited monetary outcomes for the third quarter ended September 30, 2021.
Third Quarter 2021 Working and Monetary Highlights
Whole computing energy bought was 6.7 million Thash/s, up 128.4% from 2.9 million Thash/s in the identical interval of 2020 and up 12.9% from 5.9 million Thash/s within the second quarter of 2021, setting a brand new file. The sturdy year-over-year and sequential will increase have been primarily pushed by the stable market demand and the supply of Bitcoin mining machines.
As of September 30, 2021, the Firm had money and money equivalents of RMB1,698.5 million (US$263.6 million), up 334.0% in comparison with RMB391.Three million as of December 31, 2020, primarily on account of a bigger variety of down funds obtained by the Firm on account of the bigger quantity of gross sales orders of Bitcoin mining machines.
Whole internet revenues have been RMB1,317.6 million (US$204.5 million), representing a rise of 708.2% from RMB163.0 million in the identical interval of 2020, and a rise of 21.8% from RMB1,081.Eight million within the second quarter of 2021.
Gross revenue was RMB741.7 million (US$115.1 million) in comparison with a gross lack of RMB17.Zero million in the identical interval of 2020 and a gross revenue of RMB427.9 million within the second quarter of 2021, representing a sequential progress of 73.3%.
Internet earnings was RMB467.2 million (US$72.5 million), in comparison with a internet lack of RMB86.4 million in the identical interval of 2020 and a internet earnings of RMB167.Three million within the second quarter of 2021, representing a sequential progress of 179.3%.
Non-GAAP adjusted internet earnings was RMB587.5 million (US$91.2 million), in comparison with a non-GAAP adjusted internet lack of RMB84.8 million in the identical interval of 2020 and a non-GAAP adjusted internet earnings of RMB320.1 million within the second quarter of 2021, representing a sequential progress of 83.6%.
Mr. Nangeng Zhang, Chairman and Chief Govt Officer of Canaan, commented, “Within the third quarter, we continued to navigate by way of varied market and regulatory dynamics, and achieved new highs in a number of working and monetary metrics. Our whole computing energy bought set one other file excessive to six.7 million Thash/s within the quarter, whereas we’re more and more diversifying our world presence. Our expanded footprint is because of our proactive strategic shift to world markets, efficient enterprise growth, and enhanced relationship with present shoppers. Furthermore, we’ve got began to increase our collaboration with key shoppers to joint mining, get additional concerned within the trade worth chain by leveraging our computing resolution benefits. In the meantime, in gentle of the continuing IC provide disruptions, we stay steadfast in increasing our cooperation with suppliers and securing the steadiness of our provide chain. As an integral a part of our technique, we continued to bolster our progressive capabilities by including elite skills to our R&D crew. We are going to keep vigilant to each challenges and alternatives as we develop on this fast-developing area.”
Mr. James Jin Cheng, Chief Monetary Officer of Canaan, acknowledged, “Regardless of varied challenges within the third quarter, we achieved a robust quarter with topline outcome reaching a brand new excessive to RMB1,317.6 million. We additionally additional improved our revenue stage, evidenced by a strong gross revenue of RMB741.7 million, and a non-GAAP adjusted internet earnings of RMB587.5 million. Underpinned by our glorious gross sales and market growth, our improved money place allows us to drive operation and buffer market volatilities. Whereas we delivered an excellent efficiency, we’re additionally cognizant of potential dangers, together with worth strain and instability from the provision entrance, bitcoin worth fluctuation, regulatory modifications in several nations, and so forth. To preemptively mitigate these dangers, we’ve got enhanced our partnership with our suppliers, tapped into the mining enterprise, and strategically superior our enterprise growth within the world markets. With our intensive expertise within the trade, environment friendly monetary administration, proper methods and efficient execution, we’re assured to beat headwinds and generate long-term worth for each the trade and our shareholders.”
Third Quarter 2021 Monetary Outcomes
Whole internet revenues within the third quarter of 2021 elevated by 708.2% to RMB1,317.6 million (US$204.5 million) from RMB163.0 million in the identical interval of 2020, and up 21.8% in comparison with RMB1,081.Eight million within the second quarter of 2021. The year-over-year and quarter-over-quarter will increase have been primarily as a result of steady enhance in whole computing energy bought and common promoting worth per Thash/s.
Price of revenues within the third quarter of 2021 was RMB575.9 million (US$89.4 million), representing a rise of 219.9% from RMB180.0 million in the identical interval of 2020 and a lower of 11.9% from RMB653.9 million within the second quarter of 2021. The year-over-year enhance in value of revenues was in step with income progress. The quarter-over-quarter lower was attributable to bill-of-material (BOM) value effectivity with the improved product yield fee.
Gross revenue within the third quarter of 2021 was RMB741.7 million (US$115.1 million) in comparison with a gross lack of RMB17.Zero million in the identical interval of 2020 and a gross revenue of RMB427.9 million within the second quarter of 2021, representing a sequential enhance of 73.3%.
Whole working bills within the third quarter of 2021 have been RMB278.4 million (US$43.2 million), representing a rise of 267.0% from RMB75.9 million in the identical interval of 2020 and a rise of 6.1% from RMB262.Four million within the second quarter of 2021.
Analysis and growth bills within the third quarter of 2021 have been RMB92.8 million (US$14.4 million), representing a rise of 188.8% from RMB32.1 million in the identical interval of 2020 and a rise of 32.7% from RMB69.9 million within the second quarter of 2021. The rise was primarily attributable to the elevated employees prices in technology-related departments in addition to the incremental growth prices for brand new merchandise. Analysis and growth bills within the third quarter of 2021 additionally included share-based compensation bills of RMB25.9 million (US$4.0 million).
Gross sales and advertising bills within the third quarter of 2021 have been RMB37.6 million (US$5.8 million), representing a rise of 1,081.9% from RMB3.2 million in the identical interval of 2020 and a rise of 45.4% from RMB25.9 million within the second quarter of 2021. The rise was primarily attributable to the elevated employees prices. Gross sales and advertising bills within the third quarter of 2021 additionally included share-based compensation bills of RMB1.2 million (US$0.2 million).
Normal and administrative bills within the third quarter of 2021 have been RMB148.1 million (US$23.0 million), representing a rise of 265.0% from RMB40.6 million in the identical interval of 2020 and a lower of 11.2% from RMB166.6 million within the second quarter of 2021. The rise over the identical interval of 2020 was primarily as a result of employees value {and professional} service charges. The lower in comparison with the second quarter of 2021 was primarily pushed by the decrease share-based compensation bills acknowledged through the third quarter of 2021, which was partially offset by the elevated employees prices {and professional} service charges. Normal and administrative bills within the third quarter of 2021 additionally included share-based compensation bills of RMB93.2 million (US$14.5 million).
Earnings from operations within the third quarter of 2021 was RMB463.3 million (US$71.9 million), in comparison with a loss from operations of RMB92.9 million in the identical interval of 2020 and earnings from operations of RMB165.5 million within the second quarter of 2021, representing a sequential enhance of 179.9%.
Internet earnings attributable to strange shareholders within the third quarter of 2021 was RMB467.2 million (US$72.5 million), in comparison with a internet lack of RMB86.4 million in the identical interval of 2020 and a internet earnings of RMB167.Three million within the second quarter of 2021, representing a sequential enhance of 179.3%.
Non-GAAP adjusted internet earnings within the third quarter of 2021 was RMB587.5 million (US$91.2 million), in comparison with a non-GAAP adjusted internet lack of RMB84.8 million in the identical interval of 2020 and a non-GAAP adjusted internet earnings of RMB320.1 million within the second quarter of 2021, representing a sequential enhance of 83.6%. Non-GAAP adjusted internet (loss)/earnings excludes share-based compensation bills. For additional data, please seek advice from “Use of Non-GAAP Monetary Measures” on this press launch.
International foreign money translation adjustment, internet of nil tax, was a acquire of RMB5.1 million (US$0.8 million), in contrast with a lack of RMB15.Four million in the identical interval of 2020 and a lack of RMB10.2 million within the second quarter of 2021, as a result of US greenback appreciation towards the Renminbi through the third quarter of 2021.
Primary internet earnings per American depositary share (“ADS”) within the third quarter of 2021 was RMB2.68 (US$0.42). Compared, fundamental internet loss per ADS in the identical interval of 2020 was RMB0.55, whereas fundamental internet earnings per ADS within the second quarter of 2021 was RMB0.99. Every ADS represents 15 of the Firm’s Class A strange shares.
Diluted internet earnings per ADS within the third quarter of 2021 was RMB2.64 (US$0.41). Compared, diluted internet loss per ADS in the identical interval of 2020 was RMB0.55, whereas diluted internet earnings per ADS within the second quarter of 2021 was RMB0.96. Every ADS represents 15 of the Firm’s Class A strange shares.
As of September 30, 2021, the carrying worth of cryptocurrencies held by the Firm was RMB6.1 million (US$0.9 million).
Contract liabilities as of September 30, 2021, have been RMB1,026.7 million (US$159.3 million), rising from RMB430.Four million as of December 31, 2020, primarily as a result of elevated down funds for the gross sales orders of Bitcoin mining machines to be delivered within the coming quarters.
As of September 30, 2021, the Firm had money and money equivalents of 1,698.5 million (US$263.6 million), up 334.0% in comparison with RMB391.Three million as of December 31, 2020.
Shares Excellent
As of September 30, 2021, the Firm had a complete of 157,945,733 ADSs, every representing 15 Class A strange shares.
Latest Developments
The Firm’s Share Repurchase Replace
On September 20, 2021, the Firm introduced that its board of administrators has approved a share repurchase program underneath which the Firm could repurchase as much as US$20 million value of its excellent ADSs, every representing 15 Class A strange shares, and/or (ii) Class A strange shares over the subsequent 12 months ranging from September 20, 2021.
As of November 12, 2021, the Firm has deployed roughly US$4.6 million to repurchase roughly 0.6 million ADSs underneath the Firm’s present share repurchase program.
Enterprise Outlook
For the fourth quarter of 2021, the Firm expects whole revenues to have a sequential enhance of 35% to 50%. This forecast displays the Firm’s present and preliminary views in the marketplace and operational circumstances, that are topic to vary.
Convention Name Info
The Firm’s administration crew will maintain a Direct Occasion convention name on November 16, 2021, at 7:00 A.M. Jap Time (or 8:00 P.M. Beijing Time on the identical day) to debate the monetary outcomes. Particulars for the convention name are as follows:
Occasion Title: Canaan Inc. Third Quarter 2021 Earnings Convention Name
Registration Hyperlink: http://apac.directeventreg.com/registration/event/2827548
All individuals should use the hyperlink offered above to finish the net registration course of prematurely of the convention name. Upon registering, every participant will obtain a set of participant dial-in numbers, the Direct Occasion passcode, and a singular entry PIN, which can be utilized to hitch the convention name.
A replay of the convention name can be accessible by way of November 23, 2021, by dialing the next numbers:
Worldwide: +61-2-8199-0299
United States: +1-646-254-3697
Hong Kong, China: +852-3051-2780
Replay PIN: 2827548
A dwell and archived webcast of the convention name may even be out there on the Firm’s investor relations web site at investor.canaan-creative.com.
About Canaan Inc.
Established in 2013, Canaan (NASDAQ: CAN), is a know-how firm specializing in ASIC high-performance computing chip design, chip analysis and growth, computing tools manufacturing, and software program companies. The corporate’s imaginative and prescient is “tremendous computing is what we do, social enrichment is why we do it.” Canaan has a wealthy expertise in chip design and streamlined manufacturing within the ASIC subject. In 2013, it launched and mass produced its first ASIC Bitcoin mining machine. In 2018, Canaan launched the world’s first 7nm ASIC chip, offering power environment friendly computing tools to the cryptocurrency mining trade. In the identical 12 months, Canaan launched the world’s first RISC-V structure business edge AI chip, additional harnessing the potential of ASIC know-how within the subject of high-performance computing and synthetic intelligence.
Trade Charge Info
This announcement incorporates translations of sure RMB quantities into U.S. {dollars} (“US$”) at specified charges solely for the comfort of the reader. Except in any other case acknowledged, all translations from RMB to US$ have been made on the fee of RMB6.4434 to US$1.00, the midday shopping for fee in impact on September 30, 2021, within the H.10 statistical launch of the Federal Reserve Board. The Firm makes no illustration that the RMB or US$ quantities referred could possibly be transformed into US$ or RMB, because the case could also be, at any specific fee or in any respect.
Protected Harbor Assertion
This announcement incorporates ahead−trying statements. These statements are made underneath the “secure harbor” provisions of the U.S. Personal Securities Litigation Reform Act of 1995. These ahead−trying statements may be recognized by terminology equivalent to “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and comparable statements. Amongst different issues, the enterprise outlook and quotations from administration on this announcement, in addition to Canaan Inc.’s strategic and operational plans, include ahead−trying statements. Canaan Inc. might also make written or oral ahead−trying statements in its periodic stories to the U.S. Securities and Trade Fee (“SEC”) on Kinds 20−F and 6−Okay, in its annual report back to shareholders, in press releases and different written supplies and in oral statements made by its officers, administrators or workers to 3rd events. Statements that aren’t historic details, together with statements about Canaan Inc.’s beliefs and expectations, are ahead−trying statements. Ahead−trying statements contain inherent dangers and uncertainties. A variety of components might trigger precise outcomes to vary materially from these contained in any ahead−trying assertion, together with however not restricted to the next: the Firm’s targets and methods; the Firm’s future enterprise growth, monetary situation and outcomes of operations; the anticipated progress of the Bitcoin trade and the value of Bitcoin; the Firm’s expectations relating to demand for and market acceptance of its merchandise, particularly its Bitcoin mining machines; the Firm’s expectations relating to sustaining and strengthening its relationships with manufacturing companions and prospects; the Firm’s funding plans and methods, fluctuations within the Firm’s quarterly working outcomes; competitors in its trade in China; and related authorities insurance policies and rules regarding the Firm and cryptocurrency. Additional data relating to these and different dangers is included within the Firm’s filings with the SEC, together with its registration assertion on Kind F−1, as amended, and its annual stories on Kind 20−F. All data offered on this press launch and within the attachments is as of the date of this press launch, and Canaan Inc. doesn’t undertake any obligation to replace any ahead−trying assertion, besides as required underneath relevant legislation.
Use of NonGAAP Monetary Measures
In evaluating Canaan’s enterprise, the Firm makes use of non-GAAP measures, equivalent to adjusted internet loss, adjusted internet earnings, adjusted internet (loss)/earnings, as supplemental measures to assessment and assess its working efficiency. The Firm defines adjusted internet loss as internet loss excluding sharebased mostly compensation bills. The Firm believes that the non-GAAP monetary measures present helpful details about the Firm’s outcomes of operations, improve the general understanding of the Firm’s previous efficiency and future prospects and permit for larger visibility with respect to key metrics utilized by the Firm’s administration in its monetary and operational decision-making.
The non-GAAP monetary measures should not outlined underneath U.S. GAAP and should not offered in accordance with U.S. GAAP. The non-GAAP monetary measures have limitations as analytical instruments and traders shouldn’t contemplate them in isolation, or as an alternative choice to internet loss, money flows offered by working actions or different consolidated statements of operations and money flows knowledge ready in accordance with U.S. GAAP. One of many key limitations of utilizing adjusted internet loss is that it doesn’t mirror the entire gadgets of earnings and expense that have an effect on the Firm’s operations. Share-based compensation has been and will proceed to be incurred in Canaan’s enterprise and isn’t mirrored within the presentation of adjusted internet earnings/loss. Additional, the non-GAAP monetary measures could differ from the non-GAAP data utilized by different corporations, together with peer corporations, and due to this fact their comparability could also be restricted. The Firm mitigates these limitations by reconciling the non-GAAP monetary measures to probably the most comparable U.S. GAAP efficiency measures, all of which must be thought-about when evaluating the Firm’s efficiency.
Investor Relations Contact
Canaan Inc.
Mr. Shaoke Li
Electronic mail: [email protected]
ICR, LLC
Robin Yang
Tel: +1 (347) 396-3281
Electronic mail: [email protected]
CANAAN INC. | ||||
UNAUDITED CONSOLIDATED BALANCE SHEETS | ||||
(all quantities in hundreds of RMB, besides share and per share knowledge, or as in any other case famous) | ||||
As of December 31, | As of September 30, | |||
2020 | 2021 | 2021 | ||
RMB | RMB | US$ | ||
ASSETS | ||||
Present belongings: | ||||
Money and money equivalents | 391,310 | 1,698,463 | 263,597 | |
Restricted money | 4,494 | 127 | 20 | |
Brief-term investments | 62,386 | – | – | |
Accounts receivable | 7,128 | 826 | 128 | |
Inventories | 225,522 | 833,209 | 129,312 | |
Prepayments and different present belongings | 316,366 | 1,309,719 | 203,264 | |
Whole present belongings | 1,007,206 | 3,842,344 | 596,321 | |
Non-current belongings: | ||||
Property, tools and software program | 12,193 | 31,088 | 4,825 | |
Cryptocurrencies | – | 6,062 | 941 | |
Proper-of-use belongings, internet | 14,422 | 26,241 | 4,073 | |
Lengthy-term investments | – | 20,000 | 3,104 | |
Different non-current belongings | 2,530 | 2,673 | 415 | |
Non-current monetary funding | 25 | – | – | |
Whole non-current belongings | 29,170 | 86,064 | 13,358 | |
Whole belongings | 1,036,376 | 3,928,408 | 609,679 | |
LIABILITIES, AND SHAREHOLDERS’ EQUITY | ||||
Present liabilities | ||||
Brief-term money owed | 34,754 | – | – | |
Accounts payable | 37,407 | 120,448 | 18,693 | |
Notes payable | 13,963 | – | – | |
Contract liabilities | 430,388 | 1,026,734 | 159,347 | |
Accrued liabilities and different present liabilities | 63,343 | 286,171 | 44,413 | |
Lease liabilities, present | 12,621 | 13,521 | 2,098 | |
Whole present liabilities | 592,476 | 1,446,874 | 224,551 | |
Non-current liabilities: | ||||
Lease liabilities, non-current | 3,322 | 12,281 | 1,906 | |
Different non-current liabilities | 8,020 | 6,440 | 999 | |
Whole non-current liabilities | 11,342 | 18,721 | 2,905 | |
Whole liabilities | 603,818 | 1,465,595 | 227,456 | |
Shareholders’ fairness: | ||||
Atypical shares (US$0.00000005 par worth; | 1 | 1 | – | |
Subscriptions receivable from shareholders | (1) | (1) | – | |
Treasury shares (US$0.00000005 par worth; 43,896,090 | (23,915) | (65,474) | (10,161) | |
Extra paid-in capital | 1,634,619 | 3,073,476 | 476,996 | |
Statutory reserves | 97,307 | 97,307 | 15,102 | |
Amassed different complete loss | (79,780) | (82,546) | (12,811) | |
Amassed deficit | (1,195,673) | (559,950) | (86,903) | |
Whole shareholders’ fairness | 432,558 | 2,462,813 | 382,223 | |
Whole liabilities and shareholders’ fairness | 1,036,376 | 3,928,408 | 609,679 | |
CANAAN INC. | ||||
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME | ||||
(all quantities in hundreds of RMB, besides share and per share knowledge, or as in any other case famous) | ||||
For the Three Months Ended | ||||
September 30, | June 30, 2021* | September 30, | September 30, | |
RMB | RMB | RMB | US$ | |
Internet revenues | ||||
Merchandise income | 159,727 | 1,079,429 | 1,311,992 | 203,618 |
Leases income | 2,860 | 1,634 | – | – |
Service income | 151 | – | – | – |
Mining earnings | – | 655 | 5,624 | 873 |
Different revenues | 303 | 43 | – | – |
Whole internet revenues | 163,041 | 1,081,761 | 1,317,616 | 204,491 |
Price of revenues | (180,033) | (653,874) | (575,925) | (89,382) |
Gross revenue | (16,992) | 427,887 | 741,691 | 115,109 |
Working bills: | ||||
Analysis and growth bills | (32,117) | (69,905) | (92,763) | (14,397) |
Gross sales and advertising bills | (3,181) | (25,860) | (37,597) | (5,835) |
Normal and administrative bills | (40,561) | (166,633) | (148,053) | (22,977) |
Whole working bills | (75,859) | (262,398) | (278,413) | (43,209) |
(Loss)/earnings from operations | (92,851) | 165,489 | 463,278 | 71,900 |
Curiosity earnings | 283 | 1,977 | 2,917 | 453 |
Funding earnings | 1,963 | 93 | – | – |
Curiosity expense | (785) | (15) | – | – |
International change beneficial properties/(losses), internet | 2,066 | (556) | 1,248 | 194 |
Different earnings/(bills), internet | 2,942 | 636 | (207) | (32) |
(Loss)/earnings earlier than earnings tax bills | (86,382) | 167,624 | 467,236 | 72,515 |
Earnings tax expense | (24) | (337) | (4) | (1) |
Internet (loss)/earnings | (86,406) | 167,287 | 467,232 | 72,514 |
International foreign money translation adjustment, internet of nil tax | (15,402) | (10,241) | 5,118 | 794 |
Whole complete (loss)/earnings | (101,808) | 157,046 | 472,350 | 73,308 |
Weighted common variety of shares utilized in per share | ||||
— Primary | 2,350,115,118 | 2,523,225,188 | 2,615,416,505 | 2,615,416,505 |
— Diluted | 2,350,115,118 | 2,621,690,830 | 2,652,280,752 | 2,652,280,752 |
Internet (loss)/incomes per share (cent per share) | ||||
— Primary | (3.68) | 6.63 | 17.86 | 2.77 |
— Diluted | (3.68) | 6.38 | 17.62 | 2.73 |
Share-based compensation bills have been included in: | ||||
Price of revenues | – | 92 | – | – |
Analysis and growth bills | 1,025 | 29,589 | 25,911 | 4,021 |
Gross sales and advertising bills | 11 | 1,889 | 1,248 | 194 |
Normal and administrative bills | 600 | 121,235 | 93,157 | 14,458 |
*Unaudited consolidated statements of complete earnings for the three months ended June 30, 2021 are restated hereby, on account of the reassessment of the classification of the warrants monetary instrument.
The desk under units forth a reconciliation of internet (loss)/earnings to non-GAAP adjusted internet (loss)/earnings for the interval indicated:
For the Three Months Ended | ||||
September 30, | June 30, 2021 | September 30, | September 30, | |
RMB | RMB | RMB | US$ | |
Internet (loss)/earnings | (86,406) | 167,287 | 467,232 | 72,514 |
Share-based compensation bills | 1,636 | 152,805 | 120,316 | 18,673 |
Non-GAAP adjusted internet (loss)/earnings | (84,770) | 320,092 | 587,548 | 91,187 |
SOURCE Canaan Inc.
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