Canaan Inc. saw its stock price decline sharply on Tuesday, falling 13.8% to $0.4163 during late morning trading on the Nasdaq. The drop came after the bitcoin mining hardware manufacturer reported a first-quarter net loss of $88.7 million, widening from an $85.0 million loss in the prior quarter. The company also issued a disappointing second-quarter revenue forecast, projecting between $35 million and $45 million, well below analyst expectations.
Quarterly Performance Highlights
For the first quarter of 2026, Canaan reported revenue of $62.7 million, a steep decline from $196.3 million in the fourth quarter of 2025 and down from $82.8 million in the same period a year earlier. The company attributed the revenue drop to lower bitcoin prices and a declining hashprice, which measures mining profitability per unit of computing power. CEO Nangeng Zhang described Q1 as "a very challenging quarter," noting that miners have been pulling back on capital spending amid the downturn.
Product revenue came in at $42.9 million, while mining operations contributed $19.1 million. Canaan mined 257 bitcoins during the quarter and ended March with a crypto treasury of 1,807.60 BTC and 3,951.53 ETH. The company also reported that it has approximately 11 exahashes per second of installed mining compute running through 10 joint-mining projects.
Strategic Shift and Heat-Reuse Project
In an effort to diversify beyond its core mining hardware business, Canaan announced it has secured a bid to deliver hash-to-heat units for a Nordic district heating project. The initiative will capture excess heat from mining computers to produce hot water, targeting about 8 megawatts of capacity. Currently, 2 MW is operational, with an additional 6 MW ordered in March. The company expects the project to heat approximately 2,800 homes. CEO Zhang emphasized that heat reuse is now integrated into Canaan's system design, calling the contract a demonstration of the company's technological strength.
Cash Position and Industry Headwinds
Canaan's cash position declined to $43.5 million as of March 31, down from $80.8 million at the end of December. CFO Jin "James" Cheng noted that all-in power costs remained near 4 cents per kilowatt hour across its mining units. The company collected about $42 million from customers after the quarter closed.
The broader crypto mining sector faced headwinds as well. Bitcoin traded nearly flat around $76,374, while shares of Marathon Digital fell 4.6% and Riot Platforms dropped 6.2%. The Nasdaq Composite lost over 200 points on Tuesday as inflation concerns pushed Treasury yields higher, weighing on risk assets.
Outlook and Risks
Canaan's Q2 revenue guidance of $35 million to $45 million implies a further sequential decline, reflecting ongoing challenges. If bitcoin prices remain weak, hashprice stays low, or energy costs rise, the company's machine sales could continue to face pressure. Slower buying from miners is another risk. Management is betting on its heat-reuse strategy to generate new revenue streams, but investors will need to see these projects translate into tangible earnings rather than just announced capacity.
Trading volume for Canaan shares exceeded 11.8 million shares on Tuesday, indicating heightened investor interest in the stock's decline.
