BEIJING, Nov. 16, 2021 /PRNewswire/ -- Canaan Inc.
(NASDAQ: CAN) ("Canaan" or the "Company"), a leading
high-performance computing solutions provider, today announced its
unaudited financial results for the third quarter ended
September 30, 2021.
Third Quarter 2021 Operating and Financial Highlights
Total computing power sold was 6.7 million Thash/s,
up 128.4% from 2.9 million Thash/s in the same period of 2020
and up 12.9% from 5.9 million Thash/s in the second quarter of
2021, setting a new record. The robust year-over-year and
sequential increases were mainly driven by the solid market demand
and the delivery of Bitcoin mining machines.
As of September 30, 2021, the
Company had cash and cash equivalents of RMB1,698.5 million (US$263.6 million), up 334.0% compared to
RMB391.3 million as of December 31, 2020, primarily due to a larger
number of down payments received by the Company as a result of the
larger volume of sales orders of Bitcoin mining machines.
Total net revenues were RMB1,317.6
million (US$204.5 million),
representing an increase of 708.2% from RMB163.0 million in the same period of 2020,
and an increase of 21.8% from RMB1,081.8
million in the second quarter of 2021.
Gross profit was RMB741.7
million (US$115.1 million)
compared to a gross loss of RMB17.0
million in the same period of 2020 and a gross profit of
RMB427.9 million in the second
quarter of 2021, representing a sequential growth of 73.3%.
Net income was RMB467.2 million (US$72.5 million), compared to a net loss of
RMB86.4 million in the same
period of 2020 and a net income of RMB167.3
million in the second quarter of 2021, representing a
sequential growth of 179.3%.
Non-GAAP adjusted net income was RMB587.5 million (US$91.2
million), compared to a non-GAAP adjusted net loss of
RMB84.8 million in the same
period of 2020 and a non-GAAP adjusted net income of RMB320.1 million in the second quarter of
2021, representing a sequential growth of 83.6%.
Mr. Nangeng Zhang, Chairman and Chief Executive Officer of
Canaan, commented, "In the third quarter, we continued to navigate
through various market and regulatory dynamics, and achieved new
highs in multiple operating and financial metrics. Our total
computing power sold set another record high to 6.7 million Thash/s
in the quarter, while we are increasingly diversifying our global
presence. Our expanded footprint is due to our proactive strategic
shift to global markets, effective business development, and
enhanced relationship with existing clients. Moreover, we have
started to extend our collaboration with key clients to joint
mining, get further involved in the industry value chain by
leveraging our computing solution advantages. Meanwhile, in light
of the ongoing IC supply disruptions, we remain steadfast in
expanding our cooperation with suppliers and securing the stability
of our supply chain. As an integral part of our strategy, we
continued to bolster our innovative capabilities by adding elite
talents to our R&D team. We will stay vigilant to both
challenges and opportunities as we grow in this fast-developing
space."
Mr. James Jin Cheng, Chief
Financial Officer of Canaan, stated, "Despite various challenges in
the third quarter, we achieved a strong quarter with topline result
reaching a new high to RMB1,317.6
million. We also further improved our profit level,
evidenced by a robust gross profit of RMB741.7 million, and a non-GAAP adjusted net
income of RMB587.5 million.
Underpinned by our excellent sales and market development, our
improved cash position enables us to drive operation and buffer
market volatilities. While we delivered an outstanding performance,
we are also cognizant of potential risks, including price pressure
and instability from the supply front, bitcoin price fluctuation,
regulatory changes in different countries, etc. To preemptively
mitigate these risks, we have enhanced our partnership with our
suppliers, tapped into the mining business, and strategically
advanced our business development in the global markets. With our
extensive experience in the industry, efficient financial
management, right strategies and effective execution, we are
confident to overcome headwinds and generate long-term value for
both the industry and our shareholders."
Third Quarter 2021 Financial Results
Total net revenues in the third quarter of 2021
increased by 708.2% to RMB1,317.6 million (US$204.5 million) from RMB163.0 million in the same period of 2020,
and up 21.8% compared to RMB1,081.8
million in the second quarter of 2021. The year-over-year
and quarter-over-quarter increases were mainly due to the
continuous increase in total computing power sold and average
selling price per Thash/s.
Cost of revenues in the third quarter of 2021 was
RMB575.9 million (US$89.4 million), representing an increase
of 219.9% from RMB180.0 million
in the same period of 2020 and a decrease of 11.9% from
RMB653.9 million in the second
quarter of 2021. The year-over-year increase in cost of revenues
was in line with revenue growth. The quarter-over-quarter decrease
was attributable to bill-of-material (BOM) cost efficiency with the
improved product yield rate.
Gross profit in the third quarter of 2021 was
RMB741.7 million (US$115.1 million) compared to a gross loss
of RMB17.0 million in the same period
of 2020 and a gross profit of RMB427.9
million in the second quarter of 2021, representing a
sequential increase of 73.3%.
Total operating expenses in the third quarter of
2021 were RMB278.4 million
(US$43.2 million), representing
an increase of 267.0% from RMB75.9 million in the same period of 2020
and an increase of 6.1% from RMB262.4
million in the second quarter of 2021.
Research and development expenses in the third quarter of 2021
were RMB92.8 million
(US$14.4 million), representing
an increase of 188.8% from RMB32.1 million in the same period of 2020
and an increase of 32.7% from RMB69.9
million in the second quarter of 2021. The increase was
primarily attributable to the increased staff costs in
technology-related departments as well as the incremental
development costs for new products. Research and development
expenses in the third quarter of 2021 also included share-based
compensation expenses of RMB25.9 million (US$4.0 million).
Sales and marketing expenses in the third quarter of 2021 were
RMB37.6 million (US$5.8 million), representing an increase of
1,081.9% from RMB3.2 million in
the same period of 2020 and an increase of 45.4% from RMB25.9 million in the second quarter of 2021.
The increase was mainly attributable to the increased staff costs.
Sales and marketing expenses in the third quarter of 2021 also
included share-based compensation expenses of RMB1.2 million (US$0.2 million).
General and administrative expenses in the third quarter of 2021
were RMB148.1 million
(US$23.0 million), representing
an increase of 265.0% from RMB40.6 million in the same period of 2020
and a decrease of 11.2% from RMB166.6
million in the second quarter of 2021. The increase over the
same period of 2020 was mainly due to the staff cost and
professional service fees. The decrease compared to the second
quarter of 2021 was mainly driven by the lower share-based
compensation expenses recognized during the third quarter of 2021,
which was partially offset by the increased staff costs and
professional service fees. General and administrative expenses in
the third quarter of 2021 also included share-based compensation
expenses of RMB93.2 million
(US$14.5 million).
Income from operations in the third quarter of 2021
was RMB463.3 million
(US$71.9 million), compared to a
loss from operations of RMB92.9 million in the same period of 2020
and income from operations of RMB165.5
million in the second quarter of 2021, representing a
sequential increase of 179.9%.
Net income attributable to ordinary shareholders in
the third quarter of 2021 was RMB467.2 million (US$72.5 million), compared to a net loss of
RMB86.4 million in the same
period of 2020 and a net income of RMB167.3
million in the second quarter of 2021, representing a
sequential increase of 179.3%.
Non-GAAP adjusted net income in the third quarter of
2021 was RMB587.5 million
(US$91.2 million), compared to a
non-GAAP adjusted net loss of RMB84.8 million in the same period of 2020
and a non-GAAP adjusted net income of RMB320.1 million in the second quarter of 2021,
representing a sequential increase of 83.6%. Non-GAAP adjusted net
(loss)/income excludes share-based compensation expenses. For
further information, please refer to "Use of Non-GAAP Financial
Measures" in this press release.
Foreign currency translation adjustment, net of nil tax,
was a gain of RMB5.1 million
(US$0.8 million), compared with
a loss of RMB15.4 million in the same
period of 2020 and a loss of RMB10.2
million in the second quarter of 2021, due to the US dollar
appreciation against the Renminbi during the third quarter of
2021.
Basic net earnings per American depositary share
("ADS") in the third quarter of 2021 was RMB2.68 (US$0.42). In comparison, basic net
loss per ADS in the same period of 2020 was RMB0.55, while basic net earnings per ADS in
the second quarter of 2021 was RMB0.99. Each ADS represents 15 of the Company's
Class A ordinary shares.
Diluted net earnings per ADS in the third quarter of
2021 was RMB2.64 (US$0.41). In
comparison, diluted net loss per ADS in the same period of 2020 was
RMB0.55, while diluted net earnings
per ADS in the second quarter of 2021 was RMB0.96. Each ADS represents 15 of the Company's
Class A ordinary shares.
As of September 30, 2021, the
carrying value of cryptocurrencies held by the Company was
RMB6.1 million (US$0.9 million).
Contract liabilities as of September 30, 2021, were RMB1,026.7 million (US$159.3 million), increasing from
RMB430.4 million as of December 31, 2020, mainly due to the increased
down payments for the sales orders of Bitcoin mining machines to be
delivered in the coming quarters.
As of September 30, 2021, the
Company had cash and cash equivalents of 1,698.5 million
(US$263.6 million), up 334.0%
compared to RMB391.3 million as of
December 31, 2020.
Shares Outstanding
As of September 30, 2021, the
Company had a total of 157,945,733 ADSs, each representing 15 Class
A ordinary shares.
Recent Developments
The Company's Share Repurchase Update
On September 20, 2021, the Company
announced that its board of directors has authorized a share
repurchase program under which the Company may repurchase up to
US$20 million worth of its
outstanding ADSs, each representing 15 Class A ordinary shares,
and/or (ii) Class A ordinary shares over the next 12 months
starting from September 20, 2021.
As of November 12, 2021, the
Company has deployed approximately US$4.6
million to repurchase approximately 0.6 million ADSs under
the Company's existing share repurchase program.
Business Outlook
For the fourth quarter of 2021, the Company expects total
revenues to have a sequential increase of 35% to 50%. This forecast
reflects the Company's current and preliminary views on the market
and operational conditions, which are subject to change.
Conference Call Information
The Company's management team will hold a Direct Event
conference call on November 16, 2021,
at 7:00 A.M. Eastern Time (or 8:00
P.M. Beijing Time on the same day) to discuss the financial
results. Details for the conference call are as follows:
Event
Title:
Canaan Inc. Third Quarter 2021 Earnings Conference Call
Registration
Link:
http://apac.directeventreg.com/registration/event/2827548
All participants must use the link provided above to complete
the online registration process in advance of the conference call.
Upon registering, each participant will receive a set of
participant dial-in numbers, the Direct Event passcode, and a
unique access PIN, which can be used to join the conference
call.
A replay of the conference call will be accessible through
November 23, 2021, by dialing the
following numbers:
International: +61-2-8199-0299
United
States: +1-646-254-3697
Hong Kong,
China: +852-3051-2780
Replay
PIN: 2827548
A live and archived webcast of the conference call will also be
available at the Company's investor relations website at
investor.canaan-creative.com.
About Canaan Inc.
Established in 2013, Canaan (NASDAQ: CAN), is a technology
company focusing on ASIC high-performance computing chip design,
chip research and development, computing equipment production, and
software services. The company's vision is "super computing is what
we do, social enrichment is why we do it." Canaan has a rich
experience in chip design and streamlined production in the ASIC
field. In 2013, it released and mass produced its first ASIC
Bitcoin mining machine. In 2018, Canaan released the world's first
7nm ASIC chip, providing energy efficient computing equipment to
the cryptocurrency mining industry. In the same year, Canaan
released the world's first RISC-V architecture commercial edge AI
chip, further harnessing the potential of ASIC technology in the
field of high-performance computing and artificial
intelligence.
Exchange Rate Information
This announcement contains translations of certain RMB amounts
into U.S. dollars ("US$") at specified rates solely for the
convenience of the reader. Unless otherwise stated, all
translations from RMB to US$ were made at the rate of RMB6.4434 to US$1.00, the noon buying rate in effect on
September 30, 2021, in the H.10
statistical release of the Federal Reserve Board. The Company makes
no representation that the RMB or US$ amounts referred could be
converted into US$ or RMB, as the case may be, at any particular
rate or at all.
Safe Harbor Statement
This announcement contains forward−looking statements. These
statements are made under the "safe harbor" provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These
forward−looking statements can be identified by terminology such as
"will," "expects," "anticipates," "future," "intends," "plans,"
"believes," "estimates" and similar statements. Among other things,
the business outlook and quotations from management in this
announcement, as well as Canaan Inc.'s strategic and operational
plans, contain forward−looking statements. Canaan Inc. may also
make written or oral forward−looking statements in its periodic
reports to the U.S. Securities and Exchange Commission ("SEC") on
Forms 20−F and 6−K, in its annual report to shareholders, in press
releases and other written materials and in oral statements made by
its officers, directors or employees to third parties. Statements
that are not historical facts, including statements about Canaan
Inc.'s beliefs and expectations, are forward−looking statements.
Forward−looking statements involve inherent risks and
uncertainties. A number of factors could cause actual results to
differ materially from those contained in any forward−looking
statement, including but not limited to the following: the
Company's goals and strategies; the Company's future business
development, financial condition and results of operations; the
expected growth of the Bitcoin industry and the price of Bitcoin;
the Company's expectations regarding demand for and market
acceptance of its products, especially its Bitcoin mining machines;
the Company's expectations regarding maintaining and strengthening
its relationships with production partners and customers; the
Company's investment plans and strategies, fluctuations in the
Company's quarterly operating results; competition in its industry
in China; and relevant government
policies and regulations relating to the Company and
cryptocurrency. Further information regarding these and other risks
is included in the Company's filings with the SEC, including its
registration statement on Form F−1, as amended, and its annual
reports on Form 20−F. All information provided in this press
release and in the attachments is as of the date of this press
release, and Canaan Inc. does not undertake any obligation to
update any forward−looking statement, except as required under
applicable law.
Use of NonGAAP Financial Measures
In evaluating Canaan's business, the Company uses non-GAAP
measures, such as adjusted net loss, adjusted net income, adjusted
net (loss)/income, as supplemental measures to review and assess
its operating performance. The Company defines adjusted net loss as
net loss excluding sharebased compensation expenses. The Company
believes that the non-GAAP financial measures provide useful
information about the Company's results of operations, enhance the
overall understanding of the Company's past performance and future
prospects and allow for greater visibility with respect to key
metrics used by the Company's management in its financial and
operational decision-making.
The non-GAAP financial measures are not defined under U.S. GAAP
and are not presented in accordance with U.S. GAAP. The non-GAAP
financial measures have limitations as analytical tools and
investors should not consider them in isolation, or as a substitute
for net loss, cash flows provided by operating activities or other
consolidated statements of operations and cash flows data prepared
in accordance with U.S. GAAP. One of the key limitations of using
adjusted net loss is that it does not reflect all of the items of
income and expense that affect the Company's operations.
Share-based compensation has been and may continue to be incurred
in Canaan's business and is not reflected in the presentation of
adjusted net income/loss. Further, the non-GAAP financial measures
may differ from the non-GAAP information used by other companies,
including peer companies, and therefore their comparability may be
limited. The Company mitigates these limitations by reconciling the
non-GAAP financial measures to the most comparable U.S. GAAP
performance measures, all of which should be considered when
evaluating the Company's performance.
Investor Relations Contact
Canaan Inc.
Mr. Shaoke Li
Email: IR@canaan-creative.com
ICR, LLC
Robin Yang
Tel: +1 (347) 396-3281
Email: canaan.ir@icrinc.com
CANAAN
INC.
|
UNAUDITED
CONSOLIDATED BALANCE SHEETS
|
(all amounts in
thousands of RMB, except share and per share data, or as otherwise
noted)
|
|
|
As of December
31,
|
As of September
30,
|
|
2020
|
2021
|
2021
|
|
RMB
|
RMB
|
US$
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
391,310
|
1,698,463
|
263,597
|
Restricted
cash
|
4,494
|
127
|
20
|
Short-term
investments
|
62,386
|
-
|
-
|
Accounts
receivable
|
7,128
|
826
|
128
|
Inventories
|
225,522
|
833,209
|
129,312
|
Prepayments and other
current assets
|
316,366
|
1,309,719
|
203,264
|
Total current
assets
|
1,007,206
|
3,842,344
|
596,321
|
Non-current
assets:
|
|
|
|
Property, equipment
and software
|
12,193
|
31,088
|
4,825
|
Cryptocurrencies
|
-
|
6,062
|
941
|
Right-of-use assets,
net
|
14,422
|
26,241
|
4,073
|
Long-term
investments
|
-
|
20,000
|
3,104
|
Other non-current
assets
|
2,530
|
2,673
|
415
|
Non-current financial
investment
|
25
|
-
|
-
|
Total non-current
assets
|
29,170
|
86,064
|
13,358
|
Total
assets
|
1,036,376
|
3,928,408
|
609,679
|
LIABILITIES, AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Short-term
debts
|
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 other current liabilities
|
63,343
|
286,171
|
44,413
|
Lease liabilities,
current
|
12,621
|
13,521
|
2,098
|
Total current
liabilities
|
592,476
|
1,446,874
|
224,551
|
Non-current
liabilities:
|
|
|
|
Lease liabilities,
non-current
|
3,322
|
12,281
|
1,906
|
Other non-current
liabilities
|
8,020
|
6,440
|
999
|
Total non-current
liabilities
|
11,342
|
18,721
|
2,905
|
Total
liabilities
|
603,818
|
1,465,595
|
227,456
|
Shareholders'
equity:
|
|
|
|
Ordinary shares
(US$0.00000005 par value;
1,000,000,000,000 shares authorized, 2,372,222,222 and
2,618,246,711 shares issued, 2,328,326,132 and
2,561,212,601 shares outstanding as of December 31,
2020 and September 30, 2021, respectively)
|
1
|
1
|
-
|
|
|
|
|
|
|
|
|
|
Subscriptions
receivable from shareholders
|
(1)
|
(1)
|
-
|
Treasury stocks
(US$0.00000005 par value; 43,896,090
shares as of December 31, 2020 and 57,034,110 shares as
of September 30, 2021, respectively)
|
(23,915)
|
(65,474)
|
(10,161)
|
Additional paid-in
capital
|
1,634,619
|
3,073,476
|
476,996
|
Statutory
reserves
|
97,307
|
97,307
|
15,102
|
Accumulated other
comprehensive loss
|
(79,780)
|
(82,546)
|
(12,811)
|
Accumulated
deficit
|
(1,195,673)
|
(559,950)
|
(86,903)
|
Total
shareholders' equity
|
432,558
|
2,462,813
|
382,223
|
Total liabilities
and shareholders' equity
|
1,036,376
|
3,928,408
|
609,679
|
|
|
|
|
|
CANAAN
INC.
|
UNAUDITED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE
(LOSS)/INCOME
|
(all amounts in
thousands of RMB, except share and per share data, or as otherwise
noted)
|
|
|
For the Three
Months Ended
|
|
September 30,
2020
|
June
30,
2021*
|
September 30,
2021
|
September 30,
2021
|
|
RMB
|
RMB
|
RMB
|
US$
|
Net
revenues
|
|
|
|
|
Products
revenue
|
159,727
|
1,079,429
|
1,311,992
|
203,618
|
Leases
revenue
|
2,860
|
1,634
|
-
|
-
|
Service
revenue
|
151
|
-
|
-
|
-
|
Mining
income
|
-
|
655
|
5,624
|
873
|
Other
revenues
|
303
|
43
|
-
|
-
|
Total net
revenues
|
163,041
|
1,081,761
|
1,317,616
|
204,491
|
Cost of
revenues
|
(180,033)
|
(653,874)
|
(575,925)
|
(89,382)
|
Gross
profit
|
(16,992)
|
427,887
|
741,691
|
115,109
|
Operating
expenses:
|
|
|
|
|
Research and
development expenses
|
(32,117)
|
(69,905)
|
(92,763)
|
(14,397)
|
Sales and marketing
expenses
|
(3,181)
|
(25,860)
|
(37,597)
|
(5,835)
|
General and
administrative expenses
|
(40,561)
|
(166,633)
|
(148,053)
|
(22,977)
|
Total operating
expenses
|
(75,859)
|
(262,398)
|
(278,413)
|
(43,209)
|
(Loss)/income from
operations
|
(92,851)
|
165,489
|
463,278
|
71,900
|
Interest
income
|
283
|
1,977
|
2,917
|
453
|
Investment
income
|
1,963
|
93
|
-
|
-
|
Interest
expense
|
(785)
|
(15)
|
-
|
-
|
Foreign exchange
gains/(losses), net
|
2,066
|
(556)
|
1,248
|
194
|
Other
income/(expenses), net
|
2,942
|
636
|
(207)
|
(32)
|
(Loss)/income
before income tax expenses
|
(86,382)
|
167,624
|
467,236
|
72,515
|
Income tax
expense
|
(24)
|
(337)
|
(4)
|
(1)
|
Net
(loss)/income
|
(86,406)
|
167,287
|
467,232
|
72,514
|
Foreign currency
translation adjustment, net of nil tax
|
(15,402)
|
(10,241)
|
5,118
|
794
|
Total
comprehensive (loss)/income
|
(101,808)
|
157,046
|
472,350
|
73,308
|
Weighted average
number of shares used in per share
calculation:
|
|
|
— Basic
|
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
|
Net (loss)/earning
per share (cent per share)
|
|
|
|
|
— Basic
|
(3.68)
|
6.63
|
17.86
|
2.77
|
— Diluted
|
(3.68)
|
6.38
|
17.62
|
2.73
|
Share-based
compensation expenses
were
included in:
|
|
|
Cost of
revenues
|
-
|
92
|
-
|
-
|
Research and
development expenses
|
1,025
|
29,589
|
25,911
|
4,021
|
Sales and marketing
expenses
|
11
|
1,889
|
1,248
|
194
|
General and
administrative expenses
|
600
|
121,235
|
93,157
|
14,458
|
*Unaudited consolidated statements of comprehensive income for
the three months ended June 30, 2021
are restated hereby, as a result of the reassessment of the
classification of the warrants financial instrument.
The table below sets forth a reconciliation of net (loss)/income
to non-GAAP adjusted net (loss)/income for the period
indicated:
|
For the Three
Months Ended
|
|
September 30,
2020
|
June
30,
2021
|
September 30,
2021
|
September 30,
2021
|
|
RMB
|
RMB
|
RMB
|
US$
|
Net
(loss)/income
|
(86,406)
|
167,287
|
467,232
|
72,514
|
Share-based
compensation expenses
|
1,636
|
152,805
|
120,316
|
18,673
|
Non-GAAP adjusted net
(loss)/income
|
(84,770)
|
320,092
|
587,548
|
91,187
|
View original
content:https://www.prnewswire.com/news-releases/canaan-inc-reports-unaudited-third-quarter-2021-financial-results-301425076.html
SOURCE Canaan Inc.