Canaan Inc. Q1 FY2025 earnings call

• Total revenues of $82.8 million exceeded previous guidance of $75 million, up 136% year-over-year. - Driven by A15 series mining machines, total computing power sold was 5.5 exahash per second, up 62.6% year-over-year. - Self-mining business mined 259 bitcoins, up 39% quarter-over-quarter. - Achieved positive gross profit for the first time since the bear market began nearly two years ago. - General and administrative expenses decreased by 39% quarter-over-quarter, narrowing operating loss. - Started pilot production line in the US, exploring larger manufacturing facility to reduce supply chain risks

In the first quarter of 2025, Canaan achieved total revenues of $82.8 million. Product segment performance: Machine sales revenue was $58.3 million, with 5.5 exahash per second of computing power sold, a 63% year-over-year increase. Revenue from the Avalon Home Series was $1.3 million from 6,000 units delivered in Q1, with year-to-date orders over 17,600 units and a total value of over $6.6 million. Mining operations contributed $24 million in revenue, with 259 bitcoins mined, a 33% year-over-year increase. Machine sales revenue contribution: ~70.4% ($58.3M out of $82.8M), Avalon Home Series ~1.6% ($1.3M), mining operations ~28.9% ($24M)

• Cautiously expects Q2 2025 revenue to be approximately $100 million. - Withdrew full-year 2025 revenue guidance and mining hash rate deployment targets due to tariff uncertainties. - Actively evaluating strategic initiatives including a potential share-repurchase program

• US tariffs imposing 10% to 20%+ tariffs on imports, creating uncertainty in custom operations and higher costs for US miners. - Market volatility and bitcoin price fluctuations impacting mining margins. - Delays in mining project deployments in the US due to tariff-related uncertainties

Q: Could you describe what happened with ASP and equipment pricing trends through the quarter as bitcoin prices went down, and what to expect in the second quarter?

A: In quarter one, ASP climbed to $10.5 due to strong early quarter demand, A15 series feedback, and some clearance of older products. Quarter two average selling price could be better with less A14 inventory, but future depends on US market demand and bitcoin price.

Q: How much lead time is needed for orders for 3Q or 4Q to be better than 2Q?

A: Currently, lead time for orders is about six to eight weeks, and could be between one and two months if everything goes well.

Q: Is there capacity to shift a portion of manufacturing to the US to limit tariff impact?

A: Started small scale trial production in the US, but manufacturing in US is complicated due to changing policies. Internal goal is to limit US-based production cost increase to 15%-20% compared to Malaysia, depending on demand and economics.