Canaan reports $33M net loss for 2020 despite bullish Bitcoin price action
Bitcoin’s bullish 2020 closeout was not enough to prevent Canaan from incurring a net loss in 2020.
According to the company’s unaudited financial report for Q4 2020, the Bitcoin (BTC) miner maker’s net loss for 2020 was about $33 million. However, Canaan’s 2020 net loss is significantly lower than the $148 million recorded in 2019.
Indeed, the reduction in net loss for Canaan was a common theme across the company’s quarterly performance in 2020. As previously reported by Cointelegraph, significant growth in gross margin on the sale of mining rigs helped the company lessen its year-on-year net loss by over 90% in Q2 2020.
As part of the report issued on Monday, Canaan revealed that its 2020 net revenue amounted to about $68.6 million — a 66% decline from the revenue figures in the 2019 financials.
The marked revenue decline also meant Canaan’s year-on-year gross profit took a steep tumble falling from $79 million in 2019 to under $6 million in 2020.
However, despite the drop in net revenue, Canaan says the trend will reverse in 2021 with the company forecasting a $61 million net revenue target for Q1 2021.
Like other Chinese miners, Canaan’s crypto mining inventory is on backorder amid the ongoing global semiconductor shortage.
According to Canaan CEO Nancheng Zhang, the volume of pre-orders for the company’s Bitcoin mining hardware will drive revenue growth, stating:
“Although the outbreak of COVID-19 caused supply chain disruptions and thus negatively impacted our revenues in the fourth quarter of 2020, our market leadership has enabled us to attain $174 million contracted orders with $66 million of cash advance from customers as of December 31, 2020, thus laying a solid foundation for substantial revenue growth for 2021.”
As of the time of writing, the stock price of the Nasdaq-listed Canaan is about 50% down from its 2021 high attained a month ago. Despite the drop, Canaan is still up 179% year-to-date.