Canaan Inc. ((CAN)) has held its Q4 earnings call. Read on for the main highlights of the call.
Canaan Inc. Reports Strong Q4 2024 Earnings with Record Revenue and Growth
Canaan Inc. recently held its earnings call for the fourth quarter of 2024, revealing a strong performance with record revenue and significant growth in both mining operations and product sales. The sentiment during the call was optimistic, highlighting the company’s successful expansion into North America and the launch of new products. Despite facing challenges such as inventory write-downs, regulatory uncertainties, and high operating expenses, Canaan’s positive cash flow and EBITDA profitability suggest a promising outlook.
Record Revenue Achievement
Canaan Inc. reported approximately $89 million in total revenue for Q4 2024, surpassing its guidance of $80 million and achieving the highest quarterly revenue in the past two years. For the full year, the company achieved nearly $270 million in revenue, marking a 27.4% increase year-over-year, showcasing the company’s robust financial performance.
Significant Growth in Mining Operations
The company experienced a remarkable 84% year-over-year increase in Bitcoin mining, producing 186 Bitcoins in Q4 2024. This growth translated into $15.3 million in mining revenue, up 313% year-over-year. The total installed mining hash rate reached 5.4 exahash per second, with a gross margin increase to 42% from 22% in Q3.
Successful Product Launches
Canaan’s A15 series contributed $73 million in mining machine revenue, reflecting a 64% year-over-year increase. The consumer product line, Avalon Home series, attracted significant interest with 24,000 orders for the Nano 3 and 12,000 for new products, contributing an additional $5 million.
Expansion in North America
North America emerged as a key market, accounting for approximately 40% of mining machine sales. Canaan signed agreements to expand mining capacity in Pennsylvania and Texas, aiming to achieve 10 exahash per second in North America by mid-2025.
Strong Cash Flow and EBITDA
Canaan reported positive cash flow from production and operations, generating $17 million in Q4. The adjusted EBITDA gain was $19.3 million, marking the first profitability since the market downturn began two years ago, indicating a strong financial recovery.
Inventory and Supply Chain Challenges
The company faced inventory write-downs totaling $13.6 million in Q4 2024. Although these write-downs decreased by 76% year-over-year, they still impacted the gross profit, highlighting ongoing supply chain challenges.
Regulatory and Market Uncertainties
Canaan acknowledged the global political and economic environment, along with Bitcoin price volatility, as factors contributing to market uncertainty. These elements have led to a cautious outlook for Q1 2025.
High Operating Expenses
Operating expenses increased by $10.1 million year-over-year to $49.3 million, driven by global business expansion, staff costs, professional service fees, and R&D expenditures, reflecting the company’s investment in future growth.
Forward-Looking Guidance
Canaan Inc. provided robust guidance for the upcoming quarters. The company anticipates Q1 2025 revenue of approximately $75 million, with Q2 expected to range between $120 million and $150 million. The projected total annual revenue for 2025 is between $900 million and $1.1 billion, indicating strong growth expectations.
In conclusion, Canaan Inc.’s Q4 2024 earnings call highlighted a period of record revenue and significant growth across various segments. Despite facing challenges such as inventory write-downs and regulatory uncertainties, the company’s positive cash flow and EBITDA profitability suggest a promising outlook. With ambitious expansion plans and strong forward-looking guidance, Canaan Inc. is poised for continued success in the coming year.