Canaan's mining-equipment revenue fell 96% from a year earlier to $4.8 million in the third quarter of 2026, according to results released November 10. The Bitcoin hardware manufacturer is also selling portions of its cryptocurrency holdings to fund share repurchases, drawing on its treasury to meet competing demands for shareholder returns and investment.
The 96% decline applies to equipment sales. Total quarterly revenue fell about 90%, to $14.5 million from $150.5 million, while Canaan reported an $8 million net profit alongside a $42.9 million operating loss. Those figures describe a business whose reported earnings improved before its underlying operations recovered.
Equipment sales shrink on volume and price
Canaan attributed the equipment decline to both lower computing power sold and weaker average selling prices. It sold 1 million TH/s of computing power during the quarter. Customers were buying less capacity, and the capacity they bought generated less revenue per unit.
Its own mining operations provided $9.5 million of revenue and produced 133 BTC, compared with $30.6 million of mining revenue a year earlier. Mining therefore generated almost twice as much revenue as equipment sales in the latest quarter.
That reversal changes the interpretation of Canaan's exposure to Bitcoin. Selling machines depends on customers committing capital to future production. Operating those machines earns revenue from production already underway. A company can face weak equipment orders even while its existing mining sites continue producing coins.
The quarter's profit also needs to be separated from those activities. Cryptocurrency and financial-derivative valuation gains totaled roughly $52 million. The operating loss widened from $23.9 million a year earlier, although it narrowed from the preceding quarter. The Block reported these figures in its November 10 coverage.
For investors, the operating result is the more useful starting point for judging whether equipment sales and mining can support the business. Valuation gains can improve earnings without repairing customer demand.
Bitcoin reserves enter the buyback calculation
Canaan announced an initial $20 million repurchase program under a $100 million board authorization approved November 6. Management said it would selectively monetize cryptocurrency holdings while retaining a long-term digital-asset strategy.
The authorization permits spending; it does not mean the entire amount has been spent.
Asset sales were already contributing cash. During the earnings call, management said sales of Ethereum and part of its Bitcoin holdings generated $40 million in the third quarter for operational flexibility and buybacks. Canaan spent $5.4 million repurchasing 13.6 million American depositary shares during that quarter.
Selling cryptocurrency releases cash for buying shares but reduces the assets retained for future price appreciation or other financing needs. A repurchase can express confidence in the stock while still consuming resources that could fund operations.
Treasury size alone gives an incomplete picture of that flexibility. Canaan reported approximately 1,875 BTC at September 30, with 1,258 BTC pledged for secured loans. Pledged holdings cannot be treated as an unrestricted pool for repurchases.
This corporate financing decision has consequences for shareholders, though the announced strategy calls for selective sales rather than liquidation of the entire Bitcoin position.
Power development competes for capital
Canaan is also directing resources toward power infrastructure in the United States. Its proposed 1 GW Duval County project in Texas received a conditional ERCOT grid classification, with further studies and approvals still required. Another 1 GW project in Zapata County remained in early development.
Both projects require capital before they become completed operating assets.
At quarter-end, Canaan had $22.8 million in cash and cash equivalents, plus $50 million in restricted cash committed as collateral for infrastructure arrangements. The earnings-call transcript also recorded $3.3 million in project prepayments and an approximately $1.1 million land purchase in October.
Management's response to hardware weakness extends into production planning. Executives said advanced-node wafer costs had risen while demand remained weak. They described the primary research phase for next-generation mining ASICs as complete, allowing spending decisions to follow market needs.
Canaan is trying to preserve its hardware capabilities while committing money to a different source of potential earnings. Buying back shares adds another claim on the same financial resources. Success in one activity will not automatically finance the others.
Management guided fourth-quarter revenue to $18 million to $22 million, projecting an improvement on the third quarter.
Overview
Canaan's results combine a 96% fall in equipment revenue with continued Bitcoin production, treasury sales and a new repurchase program. The reported net profit depended on valuation gains while operations remained loss-making.
The central tension is the allocation of available capital. Canaan is supporting its shares and developing power assets during a hardware downturn. Its initial buyback program is $20 million, against quarter-end unrestricted cash and cash equivalents of $22.8 million.
