Q2 2025 Canaan Inc Earnings Call

Any mode.

After the managements prepared remarks, we will have a question and answer session. Please note that this event is being recorded now I'd like to hand, the conference over to your speaker today, Ms. <unk> <unk> Investor Relations director of the company. Please go ahead Glen.

Thank you operator.

Hello, everyone and welcome to our earnings conference call.

Operator: Ladies and gentlemen, thank you for standing by and welcome to Canaan Inc.'s second quarter 2025 earnings conference call. At this time, all participants are on a listen-only mode. After the management prepared remarks, we will have a question and answer session. Please note that this event is being recorded. Now I'd like to hand the conference over to our speaker today, Ms. Gwyn Lauber, Investor Relations Director of the company. Please go ahead, Gwyn.

Speaker #2: Ladies and gentlemen, thank you for standing by. And welcome to Canaan Inc.'s second quarter 2025 earnings conference call. At this time, all participants on the list and only mode, after the management prepared remarks, we will have a question and answer session.

Joining us today are chairman and CEO, Nathan Cheng and our CFO, Jim James Chang.

Leon Wang Vice President of capital markets, and corporate development and XI Zhang Senior IR manager will also be available during the question and answer session.

Speaker #2: Please note that this event is being recorded. Now, I'd like to hand the conference over to your speaker today, Ms. Gwyn Lauber, Investor Relations Director of the company, please go ahead, Gwyn.

Our CEO will start the call by providing an overview of the company and performance highlights for the quarter.

Gwyn Lauber: Thank you, operator. Hello everyone, and welcome to our earnings conference call. Joining us today are our Chairman and CEO, Nangeng Zhang, and our CFO, James Cheng. Leo Wang, Vice President of Capital Markets and Corporate Development, and Xu Zheng, Senior IR Manager, will also be available during the question and answer session. Our CEO will start the call by providing an overview of the company and performance highlights for the quarter. Our CFO will then provide details on the company's operating and financial results for the period before we open up the call for your questions. Before I begin, I would like to refer you to our safe harbor statement and our earnings press release. Today's call will include forward-looking statements. These statements include, but are not limited to, our outlook for the company and statements that estimate or project future operating results and the performance of the company.

Speaker #3: Thank you, Operator. Hello, everyone, and welcome to our earnings conference call. Joining us today are our Chairman and CEO, Nangeng Zhang, and our CFO, James Cheng.

Our CFO will then provide details on the company's operating and financial results for the period before we open up the call for your questions.

Before I begin I would like to refer you to our safe Harbor statement in our earnings press release.

Speaker #3: Leo Wang, Vice President of Capital Markets and Corporate Development, and Xu Zhang, Senior IR Manager, will also be available during the question-and-answer session.

Today's call will include forward looking statements.

These statements include but are not limited to our outlook for the company and statements that estimate or project future operating results and the performance of the company.

Speaker #3: Our CEO will start the call by providing an overview of the company and performance highlights for the quarter. Our CFO will then provide details on the company's operating and financial results for the period before we open up the call for your questions.

These statements speak only as of today and the company assumes no obligation to revise any forward looking statements that may be made in today's press release.

Speaker #3: Before I begin, I would like to refer you to our safe harbor statement and our earnings press release. Today's call will include forward-looking statements.

Call or webcast.

As required by law.

These statements do not guarantee future performance and are subject to risks uncertainties and assumptions. Please.

Speaker #3: These statements include but are not limited to our outlook for the company, and statements that estimate or project future operating results, and the performance of the company.

Please refer to the press release and the risk factors and documents, we file with the Securities and Exchange Commission.

Gwyn Lauber: These statements speak only as of today, and the company assumes no obligation to revise any forward-looking statements that may be made in today's press release, call, or webcast, except as required by law. These statements do not guarantee future performance and are subject to risk, uncertainties, and assumptions. Please refer to the press release and the risk factors and documents we file with the Securities and Exchange Commission, including our most recent report on Form 20F, for information on risks, uncertainties, and assumptions that may cause actual results to differ materially from those set forth in such statements. In addition, during today's call, we will discuss both GAAP financial measures and certain non-GAAP financial measures, which we believe are useful as supplemental measures of the company's performance. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results.

Speaker #3: These statements speak only as of today. And the company assumes no obligation to revise any forward-looking statement that may be made in today's press release or call or webcast.

Including our most recent report on form 20-F.

For information on risks uncertainties and assumptions that may cause actual results to differ materially from those set forth in such statements.

Speaker #3: Except as required by law. These statements do not guarantee future performance and are subject to risk, uncertainties, and assumptions. Please refer to the press release and the risk factors and documents we file with the securities and exchange commission.

In addition, during today's call, we will discuss both GAAP financial measures and certain non-GAAP financial measures.

We believe are useful as supplemental measures of the company's performance.

These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results.

Speaker #3: Including our most recent report on Form 20-F, for information on risks, uncertainties, and assumptions, that may cause actual results to different materially from those set forth in such statements.

You can find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP results.

Speaker #3: In addition, during today's call, we will discuss both GAAP financial measures and certain non-GAAP financial measures, which we believe are useful as supplemental measures of the company's performance.

Our earnings press release, which is posted on the company's website.

And finally, please note that during the call all dollar amounts refer to U S dollars.

With that I will now turn the call over to our chairman and CEO and keep getting please go ahead.

Speaker #3: These non-gap measures should be considered in addition to and not as a substitute for or in isolation from gap results. You can find additional disclosures regarding these non-gap measures including reconciliations with comparable gap results in our earnings press release which is posted on the company's website.

Gwyn Lauber: You can find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP results, in our earnings press release, which is posted on the company's website. Finally, please note that during the call, all dollar amounts refer to U.S. dollars. With that, I will now turn the call over to our Chairman and CEO, Nangeng Zhang. Please go ahead.

Sounds great.

Hello, everyone. This is energy.

Okay then.

Welcome to our earnings call.

<unk>, who is our CFO James <unk>.

Singapore headquarters to share our Q2 2025 business result, and that it has stopped this with you.

Speaker #3: And finally, please note that during the call, all dollar amounts referred to US dollars. With that, I will now turn the call over to our Chairman and CEO, Ng Zhang.

This past quarter marked the first anniversary.

Yes, most of the nuisance become hobby.

Speaker #3: Please go ahead.

We are delighted to celebrate requires all time high price in recent days.

Nangeng Zhang: Thank you, Gwyn. Hello everyone, this is Nangeng Zhang, CEO of Canaan Inc. Welcome to our earnings call. Together with our CFO, James Cheng, we are in our Singapore headquarters to share our Q2 2025 business results and the latest updates with you. This first quarter marked the first anniversary since the most recent Bitcoin halving, and we are delighted to celebrate Bitcoin's all-time high price in recent days. We are pleased to report the strongest quarterly results in the current Bitcoin cycle, and also the best quarter in the past 10 quarters since Q3 2022. Total revenue for Q2 reached $100.2 million, up 40% year-over-year, breaking the $100 million mark. Gross profit rose to $9.3 million, a significant increase from $0.6 million in Q1.

Speaker #4: Sounds good, Gwyn. Hello, everyone. This is Ng, CEO of Canaan. Welcome to our earnings call. Together with our CFO, James, we are in our Singapore headquarters to share our Q2 2025 business results and the latest updates with you.

We are pleased to report our strongest quarter close to me at all.

The comps get quite a cycle and also the best quarter in the past 10 quarters since Q3 'twenty to 'twenty two.

Total revenue for Q2 rich.

Speaker #4: This past quarter marked the first anniversary since the most recent Bitcoin halving. We are delighted to celebrate Bitcoin's all-time high price in recent days.

102 million U S dollars.

<unk>, 2% year over year, reaching 100 million U S dollar swaps.

Gross profits rose two non screaming that you asked about us.

Speaker #4: We are pleased to report the strongest quarterly results in the current Bitcoin cycle, as well as the best quarter in the past 10 quarters since Q3 2022.

Significant increase from <unk>.

0.6 U S dollars.

Since many of you have got us into what.

Operating loss narrowed to $27 1 million sellers.

Speaker #4: Total revenue for Q2 reached $100.2 million US dollars, up 40% year-over-year. Breaking the $100 million US dollars mark. Gross profit rose to $9.3 million US dollars, a significant increase from $0.6 US dollars $0.6 million US dollars in Q1.

You don't tend to profitable at 1.68 million U S dollars.

And adjusted EBITDA reached 25 3 million U S autos, both keeping a record high since we began reporting these metrics in Q1 2024.

We attribute our strong results this quarter to three main factors.

Nangeng Zhang: Operating loss narrowed to $27.1 million, EBITDA turned profitable at $1.68 million, and adjusted EBITDA reached $25.3 million, both hitting record high since we began reporting this matrix in Q1 2024. We attribute our strong results this quarter to three main factors: the higher and stable Bitcoin price, our quick and effective response to the new tariff policy environment, and the rapid growth of our Avalon Home Use Miner Series product line. Throughout the quarter, Bitcoin remained strong, rising from around $75,000 at the start of the quarter to the peak of nearly $120,000 by late May, and then staying at a high level with some volatility. At the same time, total network hash rate also stayed high, which kept mining margins under pressure.

Speaker #4: Operating loss narrowed to $27.1 million US dollars. EBITDA turned profitable at $1.68 million US dollars. And adjusted EBITDA reached $25.3 million US dollars. Both kicking record highs since we began reporting these metrics in Q1 2024.

The higher end stable with one price.

Our quick and effective response.

New tariff policy environment, and the rapid growth of our home use be combining product Florida.

Throughout.

Quarter.

Pinpoint remained strong pricing from a wronged 75 saw the rest of us at the start of the quarter to the peak of nearly 120 solid U S. Others by late May.

Speaker #4: We attribute our strong results this quarter to three main factors: the higher and stable Bitcoin price, our quick and effective response to the new tariff policy environment.

And then staying at a high level with some volatility.

Our same center total network hash rate also stayed high.

Speaker #4: And the rapid growth of our home-use use Bitcoin mining product line. Throughout the quarter, Bitcoin remained strong, rising from around $75,000 US dollars at the start of the quarter to the peak of nearly $120,000 US dollars by late May.

Text mining Morris added pressure.

To her.

In Q2 mode up overall.

From a low of about $48 four.

At the ash per day towards peak.

58 U S dollars.

<unk> per day.

Speaker #4: And then staying at a high level with some volatility. At the same time, total network hash rate also stayed high, which kept mining margins under pressure.

It made.

Additions during this quarter many countries are affected.

Affected by the.

Receptacles tariff policy.

Which increase the import import cost of equipment for U S mining customers.

Nangeng Zhang: The hash price in Q2 moved up overall, from a low of about $48 per petahash per day to a peak of $58 per petahash per day in May. In addition, during this quarter, many countries were affected by the reciprocal tariff policy, which increased the import cost of equipment for U.S. mining customers and brought a lot of uncertainty to global trade. This led many U.S. customers to delay building mining sites or deploying hybrids. Facing these challenges, our sales, supply chain, and compliance teams worked closely together and focused on markets outside the U.S., delivering strong performance that offset the negative impact from the U.S. market's weaker business environment. Our product sales reached approximately $72 million, including $65.9 million from Avalon Industrial Mining Solutions and $5.7 million from the Avalon Home Use Miner Series.

Speaker #4: The hash price in Q2 moved up overall, from a low of about $48 per petahash per day to a peak of $58 per terahash per day.

And a lot of uncertainty to global trade.

That many U S customers to delay building modern sites or deploy you have right.

Facing these challenges our sales higher churn in the compliance teams work closely together and focused on.

Speaker #4: In May, during this quarter, many countries were affected by the reciprocal tariff policy, which increased the import cost of equipment for U.S. mining customers.

Markets outside the U S.

<unk> strong performance that offset the negative impact from the U S markets weaker business environment.

Speaker #4: And brought a lot of uncertainty to global trade. This led many U.S. customers to delay building mining sites or deploying hash rates. Facing these challenges, our supply chain and compliance teams worked closely together and focused on markets outside the U.S.

Our product sales reached approximately 72 million U S dollars.

Including.

$665 9 million in U S dollars from Avalon industrial mining solutions.

The 5.7, meaning sellers from the ethanol home use.

No serious in Q2, we delivered a total.

Speaker #4: Delivering strong performance that offset the negative impact from the US markets weaker business environment. Our products sales reached approximately 72 million US dollars. Including 65.9 million US dollars from Avalon Industrial Mining Solutions.

Six 4 million.

Yes.

The second of computing power.

This average selling price.

11, one U S dollars potash.

Our out of home minor product line, PD, where our strong performance this quarter generating $5 $7 million in revenue.

Speaker #4: And $5.7 million from the Avalon home-use mining series. In Q2, we delivered a total of 6.4 million hashes per second of computing power.

Sharp increase of 359% from $1 3 million in U S dollars.

Nangeng Zhang: In Q2, we delivered a total of 6.4 million terahashes per second of computing power, with an average selling price of $11.1 per terahash. Our Avalon Home Use Miner Series product line delivered strong performance this quarter, generating $5.7 million in revenue, a sharp increase of 359% from $1.3 million in the previous quarter, and maintained a gross margin of 39%, which is higher than that of our institutional mining machines. This segment now accounts for over 5% of our total revenue. What is more remarkable is that this growth was achieved despite the challenges of high summer temperatures and rising electricity costs. Looking ahead, we will continue to rapidly expand the home-use mining market, especially in heating-related application scenarios, where energy that might otherwise be wasted can be turned into additional value.

In the previous quarter and maintained a gross margin of 39%, which is higher than that of our institution of mining machines.

Speaker #4: An average selling price of $11.1 per terahash. Our Avalon home miner product line delivered strong performance this quarter, generating $5.7 million in revenue.

This segment now accounts for over 5% of our total revenue.

What is more with.

With macro is that this growth was achieved.

Speaker #4: A sharp increase of 359% from $1.3 million US dollars in the previous quarter. And maintained a gross margin of 39%. Which is higher than that of our institutional mining machines.

That's part of the challenges of high summer temperatures and rising electricity costs.

Okay.

We will continue to aggressively expand the home use market, especially in heating related application scenarios.

Where energy that might otherwise be wasted can be turned into additional value.

Speaker #4: This segment now accounts for over 5% of our total revenue. What is more remarkable is that this growth was achieved despite the challenges of high summer temperatures and rising electricity costs.

In Q2, our SaaS Montney operations produced 284 points off.

Up nine 4% from 259 with clients in the previous quarter benefiting from the rise of bitcoin prices. During this period, our mining revenue reached a record.

Speaker #4: Looking ahead, we will continue to rapidly expand the home-use mining market. Especially in heating-related applications scenarios. Where energy that might otherwise be wasted can be turned into additional value.

28, 1 million U S dollars and the increase of over 15% from <unk>.

$74 three <unk> in Q1.

Nangeng Zhang: In Q2, our self-mining operations produced 284 Bitcoins, up about 9.4% from 259 Bitcoins in the previous quarter. Benefiting from the rise of Bitcoin prices during this period, our mining revenue reached a record $28.1 million and an increase of over 15% from $24.3 million in Q1. At the end of June, our total installed mining capacity worldwide reached 8.15 exahash per second, with a 6.57 exahash per second already in operation. Last week, we also released our July Bitcoin production and mining operations update, showing continued progress in our mining business. By the end of July, our Bitcoin treasury had reached 1,500 evaluated Bitcoins. This brings us to our next topic, our Bitcoin treasury. Historically, we have increased our Bitcoin treasury in three ways. First, by accepting Bitcoin as payment for mining equipment. Second, by earning Bitcoins through our mining operations.

Speaker #4: In Q2, our self-mining operations produced 284 Bitcoins. Up about 9.4% from 259 Bitcoins in the previous quarter. Benefiting from the rise of Bitcoin prices during this period.

After the end of June our total installed mining capacity worldwide reached eight.

One five extra cash for a second.

Please.

657 extra cash per second already in operation.

Speaker #4: Our mining revenue reached a record $28.1 million US dollars. And increased of over 15% from $24.3 million US dollars in Q1. Of the end of June, our total installed mining capacity worldwide reached $8.15 extra hash per second.

Last week, we also released our July <unk>.

It's quite production in the Montney operations update showing continued.

Progress in our mining business by the end of July our Bitcoin Treasury has had reached was solid in the spinal hardware that would be clients.

This brings us to our next topic, our pecan treasury she.

Speaker #4: With a 6.57 extra hash per second already in operation. Last week, we also released our July Bitcoin production and mining operations update. Showing continued progress in our mining business.

Historically, we have increased our fifth contract rate in three ways first by accepting fifth point payments for mining equipment second by earning big clients through our mining operations and third by directly purchasing.

Speaker #4: By the end of July, our Bitcoin treasury has reached $1,500 Bitcoins. This brings us to our next topic, our Bitcoin treasury. Historically, we have increased our Bitcoin treasury in three ways.

<unk> in the open market.

Look back at this particular cycle, we have set the accumulated deep clients at all stages.

Recent quarters, our cash cost of mining has constantly been lower than.

Average market price.

Speaker #4: First, by accepting Bitcoin as payment for mining equipment. Second, by earning Bitcoins through our mining operations. And third, by directly purchasing Bitcoins in the open market.

At this point during the same periods.

While the path.

Acquiring <unk> may fluctuate from quarter to quarter.

Nangeng Zhang: Third, by directly purchasing Bitcoins in the open market. Look back at this Bitcoin cycle, we have steadily accumulated Bitcoins at all stages. In recent quarters, our cash cost of mining has constantly been lower than the average market price of Bitcoin during the same periods. While the cost of acquiring Bitcoins may fluctuate from quarter to quarter, its long-term value has continued to rise. This is why self-mining remains a profitable strategy for us, even during bear markets. At Canaan Inc., we are proud to be one of the few companies in the Bitcoin ecosystem that truly achieves vertical integration. Vertical integration is not just about mining Bitcoins. We design and manufacture our own ASIC chips and mining machines. We operate our mining business together with partners around the world, and we follow a displaced treasury strategy to accumulate Bitcoins at attractive price levels.

Long term value has continued to rise. This is why assess money remains a profitable strategy for us even during bear markets.

Speaker #4: Look back at this Bitcoin cycle; we have steadily accumulated Bitcoins at all stages. In recent quarters, our cash cost of mining has constantly been lower than the average market price.

Our tenants we are proud to be one of the few companies in the ecosystem that's truly achieves works.

Accretion.

Speaker #4: Of Bitcoin during the same period. While the cost of acquiring Bitcoins may fluctuate from quarter to quarter, its long-term value has continued to rise.

The integration is not just about in line with these clients, we design and manufacture our own ASIC chips in the mining machines, we operate our money in business together.

These partners around the world.

Speaker #4: This is why self-mining remains a profitable strategy for us. Even during bear markets. At Canaan, we are proud to be one of the few companies in the Bitcoin ecosystem that truly achieves vertical integration is not just about mining Bitcoins.

And that will follow.

This places treasury.

Strategy to accumulate with clients.

At attractive price levels.

This repeaters.

Worked together to help us lower the cost of acquiring big clients, reducing operational risks and maintain strategic flexibility.

Speaker #4: We design and manufacture our own ASIC chips and mining machines. We operate our mining business together with partners around the world. We follow a displaced treasury strategy to accumulate Bitcoins at attractive price levels.

The peak cycle.

All while steadily building enhancing our good.

Clients history.

Since our founding we have always TD or believed that because it's both a global assets class.

The foundation of entire cryptocurrency ecosystem, Likewise, our business spans to global and ductile relay any single country or customer growth our ability to adapt.

Nangeng Zhang: These three pillars work together to help us lower the cost of acquiring Bitcoins, reducing operational risks, and maintaining strategic flexibility throughout the Bitcoin cycle, all while steadily building and enhancing our Bitcoin treasury. Since our founding, we have always believed that Bitcoin is both a global asset class and the foundation of the entire cryptocurrency ecosystem. Likewise, our business spans the globe and does not rely on any single country or customer group. Our ability to adapt, flexibility across different markets, and supply chains has helped us achieve steady improvements through market cycles and policy changes. We have built a strong reputation in many countries, especially in the United States, which has earned us repeat orders from some of the most respected mining companies in the industry.

Speaker #4: These repeaters work together to help us lower the cost of acquiring Bitcoins, reducing operational risks and maintaining strategic flexibility throughout the Bitcoin cycle, all while steadily enhancing our Bitcoin treasury.

Across different markets and supply chains has helped us achieve steady improvements.

Speaker #4: Since our founding, we have always believed that Bitcoin is both a global asset class and a foundation of the entire cryptocurrency ecosystem. Likewise, our business spans the globe and does not rely on any single country or customer group.

Through market cycles and policy changes.

We have.

Our strong reputation in many countries, especially in United States.

States, which has earned.

Repeat orders from some of the most respected mining companies in the industry.

Speaker #4: Our ability to adapt flexibly across different markets and supply chains has helped us achieve steady improvements through market cycles and policy changes. We have built a strong reputation in many countries, especially in the United States.

In R&D and supply chain, our <unk> series is now in the chip packaging and testing stage and will soon move into full machine testing.

We are making every effort to bring a <unk> to market as quickly as possible.

On the supply chain side, our manufacturing.

Speaker #4: Which has earned our repeat orders from some of the most respected mining companies in the industry. In R&D and supply chain, our A16 series is now in the chip packaging and testing stage.

Ability in U S is now up and running.

Complementing our existing existing.

Nangeng Zhang: In R&D and supply chain, our Avalon A16 series is now in the chip packaging and testing stage and will soon move into full machine testing. We are making every effort to bring Avalon A16 series to market as quickly as possible. On the supply chain side, our manufacturing capability in the U.S. is now up and running, complementing our existing capacity in Malaysia. This allows us to meet bulk delivery needs for U.S. customers with only a modest cost increase. This includes fulfilling part of the order from the listed company, Cypher, in Q3. Recently, we also secured a follow-on order from CleanSpark for our Avalon A16 emerging cooling model, showing strong customer recognition of our products and services. As a U.S.-listed company committed to 100% compliance, our customers have great confidence in the compliance of our offerings.

Capacity in Malaysia.

This allows us to meet park delivery needs for U S customers.

Speaker #4: And will soon move into full machine testing. We are making every effort to bring A16 series to market as quickly as possible. On the supply chain side, our manufacturing capability in the US is now up and running.

This only.

Modest cost increase.

This includes fulfilling part of the older from the listed company cipher in Q3 recently, we also secured a follow on order for our clean spark for our <unk> emerging quoting model showing strong customer recognition of our <unk>.

Speaker #4: Complete mentioning our existing capacity in Malaysia. This allows us to meet bulk delivery needs for U.S. customers with only a modest cost increase. This includes fulfilling parts of the order from the listed company Cypher in Q3.

Products and services.

Our U S listed company committed to 100% compliance our customers have great confidence in the compliance of our all of our operators.

In today's already quoted how trade environments, reducing potential regulatory risks for our clients.

Speaker #4: Recently, we also secured a follow-on order from CleanSmart for our A15 emerging cooling model, showing strong customer recognition of our products and services. As a U.S. listed company committed to 100% compliance, our customers have great confidence in the compliance of our offerings.

It's more important than ever.

Looking ahead, we will continue to follow our unique.

Full cycle strategy, our vertical integration.

This client fit.

<unk> Treasury management, and our ability to have flexibility shifts between SaaS money and with upon purchase.

Nangeng Zhang: In today's already volatile trade environment, reducing potential regulatory risks for our clients is more important than ever. Looking ahead, we will continue to follow our unique full cycle strategy, our vertical integration, disciplined Bitcoin treasury management, and the ability to flexibly shift between self-mining and Bitcoin purchase when market conditions are right, giving Canaan Inc. a clear edge at every stage of the Bitcoin cycle. By designing and producing our own hardware, operating mining under the most favorable conditions, and steadily building our Bitcoin strategy, we have established a clear competitive advantage, one that allows us to keep accumulating Bitcoins at a cost lower than the market price, even in challenging environments. Our ongoing commitment to build a company is both resilience and agility, leveraging the advantages of vertical integration to grow our Bitcoin assets, protect shareholder value, and seize every market opportunity.

Speaker #4: In today's already volatile trade environment, reducing potential regulatory risks for our clients is more important than ever. Looking ahead, we will continue to follow our unique full-cycle strategy.

Market conditions are right.

Can a clear edge at every stage of the business cycle.

By designing and producing our all of the hardware operating funding and are the most favorable conditions and are steadily building our deep client treasury, we have expressed as tablet a clear comparative.

Speaker #4: Our vertical integration disciplined Bitcoin treasury management and ability to flexibly shift between self-mining and Bitcoin purchases when market conditions are right give Canaan a clear edge at every stage of the Bitcoin cycle.

Advantage.

Once that allow us to keep accumulating with clients at a cost lower than the market price even in challenging environments.

Our ongoing commitment to build a company with.

Speaker #4: By designing and producing our own hardware, operating mining in the most favorable conditions, and steadily building our Bitcoin treasury, we have established a clear competitive advantage.

It's both.

Cities and agility, leveraging the advantages afforded secretion to grow our assets protect shareholder value and as fees every market opportunity.

We believe this strategy will carry us through short term volatility and deliver long term stable and outstanding returns.

Speaker #4: One that allows us to keep accumulating Bitcoins at a cost lower than the market price, even in challenging environments. Our ongoing commitment is to build a company with both resilience and agility.

We also position Kanan, leading institution in both technology innovation and Bitcoin Trust re measurement.

We will continue to focus on the North America as our core expansion in region.

Speaker #4: Leveraging the advantages of vertical integration to grow our Bitcoin assets. Protect shareholder value and seize every market opportunity. We believe this strategy will carry us through short-term volatility and deliver long-term stable and outstanding returns.

Australian project.

Distribution and customer service, while closely monitoring.

Nangeng Zhang: We believe this strategy will carry us through short-term volatility and deliver long-term stable and outstanding returns. It will also position Canaan Inc. as the leading institution in both technology, innovation, and Bitcoin treasury management. We will continue to focus on North America as our core expansion region, strengthening project execution and customer service, while closely monitoring geopolitical and policy changes to adjust our strategy, seize opportunities, and mitigate risks. In summary, based on the current situation, we remain confidently optimistic for Q3 2025, with revenue expected to be in the range of $125 million to $145 million. This forecast is based on the present market and operational conditions, and actual results may vary given recent policy uncertainties and market fluctuations. This concludes my prepared remarks. Thank you, everyone. Now I will hand it over to our CFO, James Cheng.

Fuel protocol in our politics, our policy changes towards adjust our strategy seize opportunities and mitigate risks.

Speaker #4: It will also position Canaan as a leading institution in both technology innovation and Bitcoin treasury management. We will continue to focus on North America as our core expansion region.

In summary, based on the current situation will remain.

Cautiously optimistic for Q3 2025 with revenue expected to be in range of $125 million to 145 million U S. Dollars. This forecast is based on our present present market and operational conditions and.

Speaker #4: Strengthening project execution and customer service while closely monitoring geopolitical and political changes to adjust our strategy, seize opportunities, and mitigate risks. In summary, based on the current situation, we remain cautiously optimistic for Q3 2025.

And actual results may vary given recent policy uncertainties and market fluctuations.

This concludes my prepared remarks, thank you everyone now I'll hand, it over to our CFO chips.

Thank you Angie and good day to everyone. This is Jane CFO came in and there is a lag to share our Q2 financial results with you today.

Speaker #4: With revenue expected to be in the range of $125 million to $145 million, this forecast is based on the present market and operational conditions.

As <unk> stated at the start of the call. We are firmly committed to vertical integration in the bitcoin ecosystem.

Speaker #4: And actual results may vary given recent policy uncertainties and market fluctuations. This concludes my prepared remarks. Thank you, everyone. Now I will hand it over to our CFO, James Cheng.

Our vertically integrated model encompassing the entire chain of R&D manufacturing and sales of mining equipment sales mining operations and the pivotal currency Treasury management position.

James Cheng: Thank you, Nangeng Zhang, and good day, everyone. This is James Cheng, CFO of Canaan Inc. I am very glad to share our Q2 financial results with you today. As Nangeng Zhang stated at the start of the call, we are firmly committed to vertical integration in the Bitcoin ecosystem. Our vertically integrated model, encompassing the entire chain of R&D, manufacturing, and sales of mining equipment, self-mining operations, and cryptocurrency treasury management, positions us uniquely. With the cryptocurrency industry and Bitcoin ecosystem gaining increasing attention and support globally, we are confident that our forward-thinking strategic investment is demonstrating its sustained value potential. We are pleased to report record quarterly results, with both the peak of the current Bitcoin cycle and the highest performance in the past 10 quarters following Q3 2022. Let me give a quick summary of our financial performance.

Speaker #5: Thank you, Ng. And good day, everyone. This is James. CFO of Canaan. I'm very glad to share our Q2 financial results with you today.

Positions us uniquely.

With a critical currency industry, and bitcoin ecosystem, gaining increasing attention and support globally. We are confident that our forward thinking strategically investment is demonstrating its sustained value potential.

Speaker #5: As Ng stated, at the start of the call, we are firmly committed to vertical integration in the Bitcoin ecosystem. Our vertically integrated model encompassing the entire chain of R&D, manufacturing, and sales of mining equipment.

We are pleased to report record quarterly results with both the peak of the current speed corn cycle and at the highest performance in the past 10 quarters. Following Q3 2022.

Speaker #5: Self-mining operations and cryptocurrency treasury management position us uniquely within the cryptocurrency industry and Bitcoin ecosystem, which is gaining increasing attention and support globally. We are confident that our forward-thinking strategic investment is demonstrating its sustained value potential.

Let me give a quick summary of our financial performance.

First we reported a strong Q2 results with total revenue of $100 2 million.

Not only exceeding our guidance, but also reaching the 100 million quarterly milestones and representing a 40% year over year increase.

Speaker #5: We are pleased to report record quarterly results, with both the peak of the current Bitcoin cycle and the highest performance in the past 10 quarters following Q3 2022.

Our product sales delivered robust.

Performance with revenue of $72 million, an increase of 23% quarter over quarter and up 17% year over year.

Speaker #5: Let me give a quick summary of our financial performance. First, we reported strong Q2 results with total revenue of $100.2 million dollars. Not only exceeding our guidance, but also reaching the $100 million quarterly milestone.

James Cheng: First, we reported strong Q2 results with a total revenue of $100.2 million, not only exceeding our guidance but also reaching the $100 million quarterly milestone and representing a 40% year-over-year increase. Our product sales delivered a robust performance with a revenue of $72 million, an increase of 23% quarter over quarter and up 17% year over year. In Q2, we experienced a softening U.S. demand under the pressure of tariff uncertainties. While continuously delivering some early-booked contract sales orders from U.S. customers, we were also working hard to expand our distribution channels in Asia. With all efforts, our average selling price, or ASP, increased to $11.1 per terahash per second, reaching a new quarterly high in the past two years.

In Q2, we experienced softer needs U S demand under the pressure of tariff uncertainties.

While continuously delivering some early book to contract sales orders from U S. Customers. We will also working hard to expand our distribution channels in Asia.

Speaker #5: And representing a 40% year-over-year increase. Our product sales delivered a robust performance with revenue of $72 million dollars. An increase of 23% quarter over quarter and up 17% year-over-year.

With all efforts, our average selling price or ASP increased to $11 $1 per taro has specific reaching a new quarterly high in the past two years.

Speaker #5: In Q2, we experienced a softening US demand under the pressure of tariff uncertainties. While continuously delivering some early booked contract sales orders from US customers.

Turning to the revenue from our Avalon home series in quarter. Two we delivered approximately 13000, new units of our Avalon home products contributing revenue of approximately $5 $7 million and reaching the gross profit.

Speaker #5: We were also working hard to expand our distribution channels in Asia. With all efforts, our average selling price or ASP increased to $11.1 per terahash per second.

<unk> of 39%.

As of August 13, unfulfilled orders and finished the deliveries in quarter three totaled $9 5 million.

Speaker #5: Reaching a new quarterly high in the past two years. Turning to the revenue from our Avalon home series, in quarter two, we delivered approximately $13,000 units of our Avalon home products.

James Cheng: Turning to the revenue from our Avalon Home Use Miner Series, in Q2, we delivered approximately 13,000 units of our Avalon Home Use Miner Series products, contributing revenue of approximately $5.7 million and reaching the gross profit margin of 39%. As of August 13, unfulfilled orders and finished deliveries in Q3 totaled $9.5 million. Second, our mining business also recorded its best quarterly performance. Our mining revenue surged 202% year over year to $28 million. We mined 284 Bitcoins in the quarter, up 201% year over year. Our deployed hash rate expanded 23% from 6.6 exahash per second at the end of Q1 to 8.15 exahash per second at the end of Q2. In Q2, more than 10,000 mining rigs were newly deployed in our American projects, and the installed computing power in America reached 3.66 exahash per second at the end of Q2.

Second our mining business also.

Recorded its best quarterly performance.

Our mining revenue surged to 200 of zero to 2% year over year to $28 million.

Speaker #5: Contributing revenue of approximately $5.7 million and reaching a gross profit margin of 39%. As of August 13, unfulfilled orders and finished deliveries in Q3 totaled $9.5 million.

We mined 284 basis points in the quarter.

100, <unk>, 1% year over year.

Our deploy the hash rates expanding to 23% from six six X at the harsh decision at the end of quarter 12815 extra harsh per second at the end of quarter two.

Speaker #5: Second, our mining business also recorded its best quarterly performance. Our mining revenue surged to $202% year-over-year to $28 million dollars. We mined 284 Bitcoins in the quarter.

In quarter, two more than 10000 mining rigs were newly deployed in our America.

Some projects.

And the install the computing power in America reached $3 66 extra hospice segment at the end of quarter two.

Speaker #5: Up 101% year-over-year. Our deployed hash rate expanded to 23% from 6.6 exahashes per second at the end of Q1 to 8.15 exahashes per second at the end of Q2.

Next driven by the strong results of machine sales in the mining operation.

Our profit stability sold both sequentially and year over year.

Speaker #5: In Q2, more than 10,000 mining rigs were newly deployed in our America project, and the installed computing power in America reached 3.66 exahash per second at the end of Q2.

Gross profit came in at $9 3 million.

Comparator with zero point $6 million in quarter, one also setting a record high for the first time since quarter three 2002.

Adjusted EBITDA achieved a gain of $25 million.

James Cheng: Next, driven by the strong results of machine sales and mining operations, our profitability soared both sequentially and year over year. Gross profit came in at $9.3 million, compared with $0.6 million in Q1, also setting a record high for the first time since Q3 2022. Adjusted EBITDA achieved a gain of $25 million, a significant turnaround from the prior quarter's loss of $38 million. Our basic and diluted net loss per ADS narrowed to $0.03, representing the lowest loss in the past 10 quarters following Q3 2022. Last but not least, we maintained a solid balance sheet with over 1,480 Bitcoins, with a market value of approximately $160 million at the end of Q2. We continued to manage our Bitcoin reserves to generate sustainable outperformance. Turning to the expenses, our operating expenses totaled approximately $36 million, remaining flat sequentially.

Speaker #5: Next, driven by the strong results of machine sales and mining operations, our profitability improved both sequentially and year-over-year. Gross profit came in at $9.3 million.

A significant turnaround from the prior quarter's loss of $38 million.

Our basic and diluted net loss per avs.

Narrowed to two three.

U S reps.

Representing the lowest lost in the past 10 quarters following quarter three 2022.

Speaker #5: Compared with $0.6 million dollars in quarter one, also setting a record high for the first time since quarter three 2022. Adjusted EBITDA achieved a gain of $25 million dollars.

Last but not least.

We maintained a solid balance sheet with over 1480 <unk> coins.

Speaker #5: A significant turnaround from the prior quarter's loss of $38,000,000 dollars. Our basic and diluted net loss per ADS narrowed to $0.03 US dollars. Representing the lowest loss in the past 10 quarters following quarter three 2022.

With a market value of approximately $160 million at the end of quarter two.

We continued to manage our bitcoin reserves to generate sustainable outperformance.

Turning to the expenses, our operating expenses totaled approximately $36 million.

Speaker #5: Last but not least, we maintained a solid balance sheet with over 1,400 Bitcoins, with a market value of approximately $160 million at the end of Q2.

Remaining flat sequentially.

As previously announced we are steadily progressing with the exit of our AI business. Once completed this is expected to significantly reduce operating costs.

Speaker #5: We continue to manage our Bitcoin reserves to generate sustainable outperformance. Turning to the expenses, our operating expenses totaled approximately $36 million, remaining flat sequentially as previously announced.

Although there will be a one time expense related to organizational optimization in the short term the overall operating expense structure will become healthier.

By the end of second quarter, the price of bitcoin increased to around 100 zero $7000.

James Cheng: As previously announced, we are steadily progressing with the exit of our AI business. Once completed, this is expected to significantly reduce operating costs. Although there will be a one-time expense related to organization optimization in the short term, the overall operating expense structure will become healthier. By the end of the second quarter, the price of Bitcoin increased to around $107,000 versus around $83,000 at the end of the first quarter. The increased Bitcoin price on the last day of the quarter resulted in an aggregate unrealized fair value gain on crypto assets of $34 million. The non-cash accounting treatment for the fair value change of the preferred shares hit our Q2 bottom line with $17 million, consisting of $8 million from the Series A1 preferred shares converted during this quarter and $9 million from the remaining unconverted Series A and Series A1 preferred shares at the quarter end.

Speaker #5: We are steadily progressing with the exit of our AI business. Once completed, this is expected to significantly reduce operating costs. Although there will be a one-time expense related to organization optimization in the short term.

<unk> around $83000 at the end of the first quarter.

The increase the bitcoin price on the last day of the quarter resulted in an aggregate unrealized fair value gain on critical assets of $34 million.

Speaker #5: The overall operating expense structure will become healthier. By the end of second quarter, the price of Bitcoin increased to around $107,000 dollars. Versus around $83,000 dollars at the end of the first quarter.

The noncash accounting treatment for the fair value change of the preferred shares hit our quarter to bottom line with $17 million consisting.

Consisting of $8 million from the series a one preferred shares converted during this quarter and $9 million from the remaining unconverted the series a and series a one preferred shares at the quarter end in order to represent outperformance more accuracy.

Speaker #5: The increased Bitcoin price on the last day of the quarter resulted in an aggregate unrealized fair value gain on crypto assets of $34 million.

Lee and more comparable Inc. We have excluded the impact of this accounting treatment for our non-GAAP measures.

Speaker #5: The non-cash accounting treatment for the fair value change of the preferred shares hit our Q2 bottom line with $17 million, consisting of $8 million from the Series A1 preferred shares converted during this quarter.

Turning to our balance sheet and cash flow in quarter, two we paid a <unk> $41 million.

To secure a wafer supply $62 million for production operation and a $5 million prepaid for our share repurchase program. The cash outflow aforementioned was offset by cash inflow of $66 million from cells.

Speaker #5: And $9 million from the remaining unconverted Series A and Series A1 preferred shares at the quarter end. In order to represent our performance more accurately and comparably, we have excluded the impact of this accounting treatment for our non-GAAP measures.

James Cheng: In order to represent our performance more accurately and more comparably, we have excluded the impact of this accounting treatment for our non-GAAP measures. Turning to our balance sheet and cash flow, in Q2, we paid $41 million to secure our wafer supply, $62 million for production and operation, and $5 million prepaid for our share repurchase program. The cash outflow aforementioned was offset by cash inflow of $66 million from sales, $7 million from export VAT refunds, and $4 million from ADI program reimbursement. Consequently, at the end of Q2, we held a cash of $66 million on our balance sheet. Turning to our Bitcoin assets, Bitcoins held as our own holding asset increased in the quarter, reaching a record high of 1,484 Bitcoins as of June 30. This is 76 more than 1,408 at the end of the first quarter.

$7 million from export VIP response, and a $4 million from Adi program reimbursement.

Speaker #5: Turning to our balance sheet and cash flow, in Q2 we paid $41 million to secure our wafer supply and $62 million for production and operation.

Consequently at the end of quarter, two we held cash of $66 million or balance sheet.

Speaker #5: And $5 million prepaid for our share repurchase program. The cash outflow mentioned above was offset by a cash inflow of $66 million from sales and $7 million from export VAT refunds.

Now turning to our mid con assets bid.

Bitcoin calendar as our own holding asset increase in the quarter, reaching a record high of 1480 <unk> clients as of June 30.

Speaker #5: And $4 million from the ADI program reimbursement. Consequently, at the end of Q2, we held cash of $66 million on our balance sheet.

This is 76 more than 1400 zero eight at the end of the first quarter on.

On June 32025, the fair market value of our own clients totaled around $160 million.

Speaker #5: Now turning to our Bitcoin assets. Bitcoins held as our own holding asset increased in the quarter, reaching a record high of 1,484 Bitcoins as of June 30.

And our hotel again was approximately $82 million higher than the original value of the declines that weekend from mining or other operations.

As of July 31, our total debt contrary increased to 1511 as already disclosed.

Speaker #5: This is 76% more than $1,488 at the end of the first quarter. On June 30, 2025, the fair market value of our own Bitcoins totaled around $160 million dollars.

James Cheng: On June 30, 2025, the fair market value of our own Bitcoins totaled around $160 million, and our hold-up gain was approximately $82 million, higher than the original value of the Bitcoins that we gained from mining or other operations. As of July 31, our total Bitcoin treasury increased to 1,511, as already disclosed. As announced recently, by the end of July 2025, all Series A1 preferred shares have been converted into ADSs and sold. As of the date of the earnings, we have cumulatively repurchased approximately 3.6 million ADSs for approximately $2.4 million under the share repurchase program. With rebounding customer demand and proven local manufacturing in North America, we will maintain our strategic focus on this core market. Concurrently, we will continue to be agile in response to geopolitical and policy shifts, seizing opportunities while mitigating risks.

As announced recently by the end of July 2025, All series, a one preferred shares have been converted into assets and installed.

Speaker #5: And our holding gain was approximately $82 million dollars higher than the original value of the Bitcoins that we gained from mining or other operations.

As of the date of the earnings we have accumulatively repurchased approximately three 6 million <unk> for approximately $2 $4 million under the share repurchase program.

Speaker #5: As of July 31, our total Bitcoin treasury increased to $1,511, as already disclosed. As announced recently, by the end of July 2025, all Series A1 preferred shares have been converted into ADSs and sold.

With rebounding customer demand and proven local manufacturing in North America, we will maintain our strategic focus on this core market.

Concurrently we will continue to be agile in response to geopolitical and policy issues.

Speaker #5: As of the date of the earnings, we have cumulatively repurchased approximately 3.6 million ADSs. For approximately $2.4 million dollars. Under the share repurchase program.

Seizing opportunities while mitigating risks.

Given these developments, we expect revenue for the third quarter, two being in the range of $125 million.

Speaker #5: With rebounding customer demand and proven local manufacturing in North America, we will maintain our strategic focus on this core market. Concurrently, we will continue to be agile in response to geopolitical and policy shifts.

To $145 million.

This concludes our prepared remarks, we are now open for questions.

Thank you we will now begin the question and answer session as a courtesy to other investors and analysts who may wish to ask a question. Please limit yourself to one question and one follow up.

Speaker #5: Seizing opportunities while mitigating risks. Given this development, we expect revenue for the third quarter to be in the range of $125 million dollars to $145 million dollars.

James Cheng: Given these developments, we expect the revenue for the third quarter to be in the range of $125 million to $145 million. This concludes our prepared remarks. We are now open for questions.

If you have any additional questions. After the Q&A session. The Investor relations team will be available after the call for <unk>.

The benefit of all participants on today's call. If you wish to ask your question to management in Chinese. Please immediately repeat your question in English.

Speaker #5: This concludes our prepared remarks. We are now open for questions.

To ask a question you will need to press star one on your telephone and wait for your name to be announced.

Operator: Thank you. We will now begin the question and answer session. As a courtesy to other investors and analysts who may wish to ask a question, please limit yourself to one question and one follow-up. If you have any additional questions after the Q&A session, the investor relations team will be available after the call. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. To ask a question, you will need to press star one-one on your telephone and wait for your name to be announced. Please stand by while we compile the Q&A roster. Your first question coming from the line of Mike Gondal with Nordlund Capital Markets. Your line is now open.

Speaker #2: Thank you. We will now begin the question-and-answer session. As a courtesy to other investors and analysts who may wish to ask a question, please limit yourself to one question and one follow-up.

Please standby, while we compile the Q&A roster.

Okay.

And your first question coming from the line of.

Speaker #2: If you have any additional questions after the Q&A session, the investor relations team will be available after the call. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English.

Mike Grondahl with Northland Capital markets. Your line is now open.

Hey, guys. This is Logan on for Mike. Thanks for taking my question and congrats on the quarter.

First it was nice to see the $6 four axa has stalled in ASP of $11 10.

Speaker #2: To ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. Please stand by while we compile the Q&A roster.

Is there anything to call out.

Current market dynamic pricing strategy and demand for <unk> you guys saw in July and August.

Speaker #2: Ngo, first question. Coming from the line of, "My condo with Northland, Capital Markets, CLN is now open."

Okay.

Hi, Mike.

Sure.

Yes.

Logan: Hey, guys. This is Logan on for Mike. Thanks for taking our question and congrats on the quarter. First, it was nice to see the 6.4 exahash sold and ASP of $11.10. Is there anything to call out on current market dynamics, pricing strategy, and demand for A15s you guys saw in July and August? Thanks.

Yes.

Speaker #4: Hey guys, this is Logan on from Mike. Thanks for taking our question, and congrats on the quarter. First, it was nice to see the 6.4 extra hash sold and an ASP of $11.10.

Sure.

In Q1 this year first of all give us some.

Sure.

Sure.

Yes of course.

It gives them access to the numbers.

Speaker #4: Is there anything to call out on current market dynamics, pricing strategy, and demand for A15s you guys saw in July and August? Thanks.

We comprise.

Now rise to new Heights and.

Demand.

15 to date.

Look somewhat.

Nangeng Zhang: Hi, Mike. In Q1 this year, first I will give some quick updates about the numbers. Bitcoin price now rises to new heights, and the demand for A15 today looks somewhat different from when we issued our first-year 2025 guidance in January. In Q1, I think the ASP for Q1 is $10.5 per terahash, and Q2's ASP has risen to $11.1 per terahash. This is the ASP side. In Q2, there is a tariff policy which has increased the overall cost for our U.S. customers. I think the estimated impact is roughly from like 15% to 25%, and it remains fluctuating. As a result, many customers in the U.S. are still taking a wait-and-see approach. Several U.S. orders we announced recently, especially from public listed miners, show that through joint efforts, customers are gradually adapting to the tariff changes, and their willingness to purchase is coming back.

Speaker #5: Hi, Mike. Yeah, in Q1, this year, first I'll give some yeah, first I'll give some quick answers about the numbers. Be comprised now rise to new heights and demand of A15 today looks somewhat different from when we issued our first year first 2025 guidance in January.

Different from.

When we.

Issued our first year for us.

So this is not guidance in January.

And.

In Q1 I think.

Asps for our <unk>.

ASP for Q1 is $10 $5 potash.

Q2 sales to Sps rise to.

11, <unk> hundred one.

Trash. So this is.

The ASP side.

But you know.

Sure.

In Q.

<unk> Q2.

Speaker #5: And in Q1, I think the ASP for our the ASP for Q1 is 10.5 dollars per terahash. And Q2 is ASP has rise to 11.1.

There is.

Because the tariff policy.

Which has increased.

The.

The overall cost for.

Our U S customers and I think the.

Speaker #5: Terahash. Yeah, this is as ASP side. But you know, in Q2, there's, you know, because of the tariff policy which has increased the overall cost for our U.S. customers, and I think the estimated impact is roughly from like 15% to 25%.

Estimated impact is roughly from 15% to 25%.

And.

It's remiss.

Sure.

Fluctuate so as a result, many customers and customers in the us.

They were taking.

CBOE with NFC.

But several U S orders, we announced recently.

Especially from public leads to the monitors shows that.

Through joint efforts.

Customers.

Judy adapting the <unk>.

Tariff changes and they are we will need to purchase it's coming back.

Speaker #5: And it remains fluctuate. So as a result, many customers in the US still taking we had to see. But several US holders we are not recently.

Yes, and also we have opened our.

Production facilities in the U S.

And.

Now, we can deliver machines from U S and Malaysia.

Speaker #5: Especially from public listed miners shows that through joint efforts, customers are gradually adapting the tariff changes and their willingness to purchase is coming back.

Two.

Avoid tariffs.

Some of the tariffs.

Two.

Improved overall.

User experience.

For the service.

Nangeng Zhang: We have also opened our production facilities in the U.S., and now we can deliver machines from the U.S. and Malaysia to avoid some of the tariffs, to improve the overall user experience in closed service. I think in the last three quarters, our ASP is increasing, and the ongoing demand especially outside the U.S. for high-performance miners, is also growing. Another thing is because for A15s, the manufacturing process is improving, and the performance is increasing, and the cost is slightly lower and lower. So it supported our ASP and gross margin.

So.

Speaker #5: Yes, and also we have opened our production facilities in the US. And now we can deliver machines from the US and Malaysia. To avoid tariffs some of the tariffs.

I think in the last three quarters our ASP.

Increasing.

And also.

The ongoing demand.

All sides.

Especially outside U S.

For high performance manners.

As also correctly so.

Speaker #5: To improve the overall user experience in full service. Yeah. So I think in the last three quarters, our ASP is increasing. And also the ongoing demand outside especially outside US for high-performance miners is also growing.

And another thing is.

Sure.

Cause.

Sure.

<unk>.

Manufacturing advantage is a process.

He is improving and the performance is increasing.

The cost is.

It's slightly lower lower.

No.

This supported our.

And.

Cosmetics centrally.

Speaker #5: So and another thing is because the for A15s, the manufacturing advantage process is improving and the performance is increasing and the cost is slightly lower and lower.

Great. Thanks for the color there and then one follow up from US Congrats on the Viper and clean spark order during the quarter.

Can you guys just provide update now.

Thank you for the United States production facility, how it cannot viewing strategy for penetrating the north American market.

Is there any update for how you guys see to grow market share there.

Speaker #5: So it's supported our ASP and gross margin. Thank you.

I will say something and above.

Seifer Cypress.

Others may be Genesis will add some color after after that.

Logan: Great. Thanks for the cover there. Then one follow-up from us. Congrats on the Cypher and CleanSpark order during the quarter. Can you guys just provide an update now with the, I think you said, the United States production facility? How is Canaan viewing its strategy for penetrating the North American market? Is there any updates for how you guys see to grow market share there?

Speaker #4: Great, thanks for the color there and then one follow-up from us. Congrats on the cypher and CleanSmart order during the quarter. Can you guys just provide an update now with the I think you said the United States production facility.

I think we have always.

<unk> was at actively expanding in North America market.

Speaker #4: How is Canaan viewing its strategy for penetrating the North American market? Is there any updates for how you guys see to grow market share there?

Is the right.

Decision.

At least in in mid and long term.

And fully <unk>.

Our long term strategy.

I think the U S continues to stand strong policy signals.

Nangeng Zhang: First, I will say something about the Cypher orders. James will add some color after that. I think we have always believed that actively expanding the North America market is the right decision, at least in medium and long terms, and fully in line with our long-term strategy. I think the U.S. continues to send strong policy signals supporting the cryptocurrency industry. Also, America has the world's most mature crypto community and is home to the largest number of publicly listed mining companies. It also has abundant and diverse power resources, including wind and solar renewable energy, that can support very large-scale deployments. America's culture of innovation and its capital markets ecosystem provide a very strong foundation for institutional miners. For us, because the institutional miners always have set habits inside operations, in equipment purchasing, the key to gain more market share in the U.S.

Speaker #6: First, I will say something about the cypher's orders. Maybe James will add some color after that. I think we have always believed that actively expanding in the North American market is the right decision.

Talking that the reason is.

The signal supporting the.

Currency industry.

And also America American has worse, most mature capital community.

And is.

Home.

Two the largest number of publicly listed.

Many companies.

Speaker #6: At least in the long term. And fully in line of our long-term strategy. I think the US continues to stand strong policy signals supporting the reason is the signals supporting the cryptocurrency industry.

It also has <unk>.

Abundance and diverse power resources, including.

Wind and solar renewable energy debt.

It can support.

Very large scale deployments.

Americas culture of innovation, and it's capital markets ecosystem private provider.

Speaker #6: And also America has the world's most mature crypto community. And is home to the largest number of publicly listed mining companies. It also has abundant and diverse power resources including wind and solar, renewable energy.

Provides.

<unk>.

Foundation for institutional.

Manners.

Yes, so for us because the institutional manners always have.

Handset habits in site operations.

Equipment purchasing so for us the key to gain more.

Speaker #6: That can support very large scale deployments. Americans culture of innovation and its capital markets ecosystem private provide a very strong foundation for institutional miners.

Mark Schauer.

The us is to get more customers to try our products first.

So our machines must have very clear performance advantages.

So customers have regions two good reasons to test our new models.

Speaker #6: Yeah, so for us, because the institutional miners always have set habits in site operations in equipment purchasing. So for us, the key to gain more market share in the US is to get more customers to try our products first.

Second is our service quality must be the highest in the industry standard.

I think in 2020 for North America already contributed about 40% of our total money machine sales revenue.

On the minus side that we already have deployed the <unk> III plant.

Nangeng Zhang: is to get more customers to try our products first. So our machines must have very clear performance advantages, so customers have good reasons to test our new models. Second, our service quality must be the highest in the industry standard. I think in 2024, North America already contributed about 40% of our total mining machine sales revenue. On the mining side, we already have deployed 3.67 exahash per second for mining hash rate in this region. In Q2, our mining revenue in North America reached the record high of $28 million. This year, as I mentioned, we also established manufacturing capacity in the U.S. This is all solid for long-term growth in North America. In short term, I think the changes in business environment and policies early this year slowed our expansion pace in the U.S.

<unk> seven <unk> hundred <unk> four of manufacturers in this region.

Speaker #6: So our machines must have very clear performance advantages. So customers have good reasons to good reasons to test our new models. Second is our service quality must be the highest in the industry standard.

In Q2, our revenue in North America reached.

Record high of 28 meaningless sellers.

Yes.

And this year we.

As mentioned, we also established manufacturing capacity in U S.

Speaker #6: I think in 2024, North America already contributed about 40% of our total mining machine sales revenue. On the mining side, we already have deployed 3.67 extra hash per second for mining hash rate in this region.

This is a solid.

For long term growth in North America.

In short term I think the.

The changes in business environment on policies already this year.

Slowed our expansion pace in U S.

So, but we make adjustments.

Speaker #6: In Q2, our mining revenue in North America reached a record high of $28 million USD. This year, as I mentioned, we also established manufacturing capacity in the U.S.

I think the most kind of period is now behind us.

Key metrics are recurring and we remain confident in long term potential of.

North American market.

Thank you.

Speaker #6: This is all solid for long-term growth in North America. In short term, I think the changes in business environment and policies already this year slowed our expansion pace in the US.

Yes.

I will add some color on this because.

U S market.

Important for us in our annual report, we have mentioned like a 40% of revenue in 2024 has come from the U S market.

And recently, we got orders from cyber and clean spark and the size of our order.

Nangeng Zhang: But we make adjustments, and I think the most challenging period is now behind us. Key metrics are recurring, and we remain confident in the long-term potential of the North American market. Thank you.

Speaker #6: So, we make adjustments, and I think the most challenged period is now behind us. Key metrics are recurring, and we remain confident in the long-term potential of the North American market.

First time, we start to have.

Use the manufacturing.

Factory in United States to as a new new alternative although the cost is a little bit higher.

Speaker #6: Yeah, thank you.

James Cheng: I will add some color on this because the U.S. market is so important for us. In our annual report, we have mentioned 40% of our revenue in 2024 has come from the U.S. market. Recently, we got orders from Cypher and CleanSpark. In the Cypher order, it is the first time we started to use the manufacturing factory in the United States as a new alternative. Although the cost is a little bit higher, I think it is beneficial to our customers. It is close to them, and they recognize our product performance. We would like to improve the delivery capability and the overall cooperation experience for them. I think that also shows our execution to the strategic thinking from the CEO. He just mentioned that we really value our customers in the United States, and the U.S.

Speaker #5: Yeah, I will add some color on this because the U.S. market is so important for us in our annual report. We have mentioned that about 40% of our revenue in 2024.

And I think it's <unk>.

Benefits show to our customers.

Close to them and.

<unk>.

They recognize our product performance, so we would like to improve the delivery.

Speaker #5: Has come from US market. And the recently we got orders from cypher and CleanSpark. And in the cypher order, it's the first time we start to have you know use the manufacturing factory in the United States to as a new alternative although the cost is a little bit higher.

Capability and.

Overall, our cooperation experience for them.

So I think that's also.

Shoulder.

Execution to the strategic thinking from CEO, just mentioned that we really value our customers in the United States in the U S strategy is one of the most important strategy.

Speaker #5: And I think it's beneficial to our customers. It's close to them and you know they recognize our product performance. So we would like to improve the delivery capability and overall cooperation experience for them.

Our whole integrated system I think.

Net new orders.

Mutually beneficial to both us and also safer and we also have the immersed cooling orders from clean spark as well so I think.

Speaker #5: So I think that's also showed our execution to the strategic thinking from CEO just mentioned we really value our customers in the United States and the US strategy is one of the most important strategies in our whole integrated system.

Now is the better time compared to.

The early stage of the target to come out after liberation days.

Customers tend to slow down their orders and now we get back our customers and we start to have some orders I believe we will have chance have opportunity to have more.

James Cheng: strategy is one of the most important strategies in our whole integrated system. I think the new orders are mutually beneficial to both us and also Cypher. We also have the immersion-cooled systems orders from CleanSpark as well. I think now is the better time compared to the early stage of the tariffs that came out after liberation days. U.S. customers tended to slow down their orders. Now we get back our customers, and we start to have some orders. I believe we will have the opportunity to have more. Thank you, Mike.

Speaker #5: I think the new orders is mutually beneficial to both us and also cypher and we also have the immersed cooling orders from CleanSpark as well.

Thank you Mike.

Thank you.

Our next question coming from the line of.

Edward Engel with Compass point Research your line is now open.

Speaker #5: So I think now is the better time compared to you know in the early stage of the tariff come out after liberation days. US customers tend to slow down their orders but now we get back our customers and we start to have some orders I believe we will have chance have opportunity to have more.

Hi, everyone. This is a dilutive over on for Ed.

Can I just ask have you seen any changes in customer demand since may and has sentiment rebounded back towards Q1 levels for example.

Let me see.

Yes.

Our Celsius.

This year, we have indeed.

Speaker #5: Thank you, Mike.

<unk> seen some positive changes.

Operator: Thank you. Our next question coming from the line of Edward Engel with Compass Point Research. Your line is now open.

Speaker #2: Thank you. Our next question coming from the line of. Edward Engel with Compass Point Research, your line is now open.

In the market.

Demand recently.

We have a we have announced several new orders from institutional customers in us.

James Cheng: Hey, everyone. This is Gwyn Lauber on for Ed. Can I just ask, have you seen any changes in customer ASIC demand since May? Has sentiment rebounded back towards our Q1 levels, for example?

Speaker #7: Hey everyone, this is a little over on for editing. Can I just ask, have you seen any changes in customer ASIC demand since May?

Acre.

Showing that local customers.

Quickly adapting this new tariff environment and.

Speaker #7: And has sentiment rebounded back towards our Q1 levels, for example?

Our willingness to purchases.

I think it's important to note that.

Direct impact.

Nangeng Zhang: Let me see. I think since July this year, we have indeed seen some positive changes in the market demand. Recently, we have announced several new orders from institutional customers in North America, showing that local customers are gradually adapting to this new tariff environment, and their willingness to purchase is returning. I think it is important to note that the direct impact of the tariff policy is concentrated mainly in the U.S. During Q2, we saw very active demand in Asia and other regions, where we secured a large number of orders this quarter. The company delivered over $100 million in revenue with more than $70 million for mining machine sales, and most of these orders did not come from the U.S. This shows that the overall global demand remains healthy and receded.

Speaker #4: Let me see. I think since July this year, we have indeed seen some positive changes. In the market, demand recently. We have you know we have announced several new orders from institutional customers in those ose America.

After tariff policy.

It's concentrated.

Concentrated mainly in the U S.

During Q2.

We saw very active demand in Asia and other regions.

Where we secured a large number of others.

This quarter the company delivered or 100 meeting the revenue.

These.

Then.

Speaker #4: Showing that local customers are gradually adapting to the new type of environment, and their willingness to purchase is returning. I think it's important to note that the direct impact of the tariff policy is concentrated mainly in the U.S.

770 million or.

<unk> 70, <unk> $70 million for mining machine sales and most of these orders did not come from the U S.

This shows that overall global demand remains healthy.

Risks ceded.

And.

Because in July.

Speaker #4: Yeah, during Q2, we saw very active demand in Asia and other regions. Where we secured a large number of orders this quarter. The company delivered over 100 million in revenue.

Pecan prices have.

<unk> reached new all time highest our tons.

Which has been important driver for miners to increase processes.

That said because the U S tariff policy is still not settled uncertainty remains.

Speaker #4: With more than 70 million US dollar 70 million US dollars for mining machine sales. And most of these orders did not come from the US.

I think.

The demand.

<unk> from U S customers has not fully returned.

Two levels.

Before the tariff process.

And.

Speaker #4: This shows that overall global demand remains healthy and resilient. And you know because in July, be comprises have also reached the new all-time high several times.

I need to talk about some indirect impacts.

Because it's more complex.

Restrictions.

Nangeng Zhang: Because in July, Bitcoin prices have also reached new all-time highs several times, which has been an important driver for miners to increase purchases. That said, because the U.S. tariff policy is still not settled, uncertainty remains. I think the demand from U.S. customers has not fully returned to levels before the tariff policy was announced. I think I need to talk about some indirect impacts because it is more complex. Restrictions on mining machines imported into the U.S. have created a very rare situation in this industry, maybe in the past 10 years, where mining is still.

Mining machines important into U S have a grid.

Greer situation in this industry, maybe in the past.

Yes.

Speaker #4: Which has been an important driver for miners to increase purchases. That said, because the US tariff policy is still not settled uncertainty remains. I think the demand from US customers has not fully returned.

We're mining is still profitable or very profitable.

But due to supply demand imbalances.

Machine originally intended for U S market.

Had to be sold to other regions that.

At discounted.

Speaker #4: To levels we before the tariff policy announced. And I think I need to talk about some indirect impacts because it's more complex. Restrictions on mining machines important to US.

Discounted prices.

This creates the virus market during Q.

Four cycle, so sometimes something is not seen over a decade so to address this.

I think what we can do is we must continue to work on other ways to gather machines into the U S at a lower.

Speaker #4: Have a great and very real situation in this industry. Maybe in the past 10 years, where mining is still profitable or very profitable. But due to supply-demand imbalances, machines originally intended for the U.S. market have to be sold to other regions at discounted prices.

Yes, so I think our U S manufacture is already in operational.

Nangeng Zhang: profitable or very profitable, but due to supply-demand imbalances, machines originally intended for the U.S. market had to be sold to other regions at discounted prices. This created the virus market during a bull cycle, so sometimes something is not seen over a decade. To address this, I think what we can do is we must continue to work on the ways to get the machines into the U.S. at a lower cost. I think our U.S. manufacturer is already operational, but it's still very complex because components entering the U.S. still face tariffs. Overall, I think this setup helps us to lower the cost and speed up the supply for the U.S. market to solve the previous question. I think it will help us to gain more local orders. Thank you.

But while it's still very complex because complements entered into U S steel piece.

Tariffs overall I think the setup house.

<unk> us to lower the cost and the speed of those plan for U S market to solve the previous question.

Speaker #4: This created the buyers market during a bull cycle. So something is not seen over a decade. So to address this, I must I think what we can do is we must continue to work on the ways to get the machines into the US at a lower cost.

And.

Yes, I think it's.

To help us to gain more local orders. Thank you.

Great. Thank you.

Thank you.

Our next question coming from the line of Kevin Cassidy with Rosenblatt Securities. Your line is now open.

Okay.

Yes, congratulations on the great results.

Thanks for taking my question.

Can you describe the effect that bitcoin miners with them.

Assuming the AI and HBC co location hosting agreement.

Slowing the demand for the bitcoin mining rigs.

Yes.

Good morning.

Yes.

James Cheng: Great, thank you.

See some minor CA rest of the quarters.

Operator: Thank you. Our next question is coming from Kevin Cassidy with Rosenblatt Securities. The line is now open.

They are shifting a part of their power in the facilities.

Two <unk> court.

Colocation products.

Gwyn Lauber: Yeah, congratulations on the great results, and thanks for taking my question. Can you describe the effect that Bitcoin miners, with them pursuing the AI and HPC colocation hosting agreements, is that slowing the demand for the Bitcoin mining rigs? Oh, yeah. Good morning. Yes, we have seen some miners in recent quarters. They are shifting a part of their power and facilities to AI HPC colocation projects, and some have done so very successfully, often leveraging their experience in Bitcoin mining and access to energy resources. We see AI HPC and Bitcoin mining as complementary for two reasons. First, AI HPC projects typically have longer sales cycles and a capital recovery period than Bitcoin mining. So when Bitcoin price is high and the network demand is strong, mining continues to offer higher and more predictable returns, which is why many companies are pursuing both.

And somehow bounds, so successfully offering leveraging there.

<unk> experience in Yukon mining in excess to energy sources, we see AI <unk> mining.

As complementary for two reasons.

First is AIG PC products typically have longer.

Sales cycles, and a capital recovery period, then be combining.

So when did comprises high network demand strong mining continued to over a higher and more predictable returns.

Which is why many companies.

Pursuing both.

Second for all energy standpoint.

There is no direct competition for.

Resources built on mining is annuity flexible.

<unk> consumer.

Over the long term it can quickly secure large volumes of energy at low cost.

And opening appling rapid scaling rather than waiting years for traditional products.

Or structure.

Frames onto a year or even days.

It's load.

Profile allow states to absorb intermediate renewable or surpassed energy, helping stabilize supply for AI, which SBC will growth. So many large energy projects now plan for both mining and negotiate potential <unk> customers.

Gwyn Lauber: Second, from an energy standpoint, there is no direct competition for resources. Bitcoin mining is an unusually flexible power consumer. Over the long term, it can quickly secure large volumes of energy at very low cost, enabling rapid scaling rather than waiting years for traditional projects. Over structured time frames, down to a year or even days, its load profile allows it to absorb intermediate renewable or surplus energy, helping stabilize supply for AI and HPC workloads. So many large energy projects now plan for both mining and potential HPC customers together, improving overall energy utilization. So overall, our customers include large institutional miners, distribution partners, and home use around the world. With a flexible product portfolio and global delivery capabilities, I think we can meet a wide range of deployment needs. So, we expect Bitcoin mining equipment to remain the core driver for our business. Yeah, thank you.

Together, improving overall energy <unk>.

Asia.

So overall our customers.

<unk> large institutional manners.

Distribution partners.

And home use around the world.

Flexible for.

Profile allow states to absorb intermediate renewable or surpassed energy, helping stabilize supply for AI, which SPC workloads. So many large energy projects now planned for both mining and appreciate potential HBC customers.

Product portfolio and global delivery capabilities.

<unk> I think we can meet a wide range of deployment.

So we would expect bitcoin mining pigments to remained.

Core driver followed Disney.

Thank you.

Okay.

Together, improving overall energy.

And maybe just as a follow up.

Can you give us an update on the.

Asia.

Nextgen Asics sixteens in.

So overall our customers.

Have you seen a trend for more.

Liquid cooled in immersion systems than in the past.

<unk> large institutional manners.

Firstly.

Distribution partners.

The.

<unk>.

The liquid cooled and Eric.

And home use around award with a flexible for.

Question.

Product portfolio and global delivery competitors.

Yes.

Currently quarter system, having growth strategy.

<unk> I think we can meet a wide range of deployment.

But now our full model steel costs for most of our mono cells.

So we would expect to bitcoin mining equipments to demand.

I think the reason is because.

Core driver for our business.

Yes. Thank you.

They have a lower deployment requirements.

Nangeng Zhang: Okay. Maybe just as a follow-up, can you give us an update on the next-gen ASIC, the Avalon A16 series? Are you seeing a trend for more liquid-cooled and immersion systems than in the past?

Okay.

And maybe just as a follow up.

It's more simpler to install and maintain and can be quickly rollouts across a wide range of global markets.

Can you give us an update on the.

Nextgen, a 62000 sixteens and.

Have you seen a trend for more liquid cooled and immersion systems than in the past.

Especially for customers who have.

Video flexibility and low operating costs.

Okay.

Nangeng Zhang: Firstly, I will answer the liquid-cooled and the air-cooled question. Currently, water-cooled systems have been growing steadily, but air-cooled models still account for most of our miner sales. I think the reason is because they have lower deployment requirements. It is simpler to install and maintain and can be quickly rolled out across a wide range of global markets, especially for customers who value flexibility and low operating costs. Water-cooled systems perform very well in high-density computing environments but require stricter standards for water quality and operations. They are mainly used by large mining farms with fixed infrastructure. Since July, we have seen growing demand in Asia from customers who want to use the heat output for water heating. Many of them start with small batches for around tens to several hundred machines, while they prepare for larger deployments later in winter.

For our water ecosystem.

Firstly.

Because it's performed very well in.

The.

The liquid put under Eric.

High density computing environments.

Question.

But require stricter standards for water quality and operations.

Yes, I think currently what quarter our system, how we grow sturdy.

They are mainly used by a large mining firms we have six infrastructure.

But now after the model steel costs for most of our mono cells.

Yes July we've seen growing demand in Asia.

I think the reason is because.

From customers, who want to use the heat output for water heating.

They have a lower deployment requirements.

It's more simpler to install and maintain and can be quickly rollouts across a wide range of global markets.

Many of them start with small batches for runoff tends to.

Several hundred machines.

Well that prepare for larger deployments later.

Especially for customers who have.

In winter.

Value flexibility and low operating costs.

Yes.

In.

Emerging and accordingly is growing very fast.

For our water ecosystem.

In North America, and parts of Middle East.

Because it's performed very well in.

High density computing environments.

Large institution of miners are clean spark.

But require streaker standards for water quality and operations.

Cruising emerging for us.

<unk> performance.

They are mainly used by a large mining firms with fixed infrastructure.

High density.

Lloyds and.

Stable very stable.

First July we've seen growing demand in Asia.

These products offer a year ago higher customization long term capital investments.

From customers, who want to use that heat output for water heating.

Which also strengthened customer.

Many of them start with small batches for Iraq tends to.

<unk>.

<unk>, yes.

That's the generation.

Several hundred machines.

We will offer all three.

While that prepare for larger deployments later.

According operations office.

In winter.

Nangeng Zhang: Immersion cooling is growing very fast, particularly in North America and parts of the Middle East. Large institutional miners like CleanSpark are choosing immersion for its strong performance, high density, low noise, and very stable operation. These projects often involve higher customization and long-term capital investment, which also strengthens customer retention. For the next generation, we will offer all three different cooling options, and we will optimize designs for different markets or even different customers for different energy conditions. For example, I think in higher temperature regions, immersion cooling and water cooling may be more attractive. Some distributed sites are a smaller size, and air cooling may be continuing to deliver strong cost effectiveness. I think because of the energy efficiency and the next-gen ASIC miners' requirements and the larger and larger scale operators, immersion and water-cooled models will become more and more common. Thank you.

In.

And we will optimize designs for different market or even the difference.

Emerging and accordingly is growing very fast.

Customers for different energy conditions.

In North America, and processed in Middle East.

Large institution of miners are clean spark.

For example in <unk>.

Cruising emerging for its <unk>.

Higher temperature regions in motor and accordingly, According maybe more attractive.

Strong performance.

High density.

Lloyds and.

And.

Some.

Stable very stable.

These products offer a year ago higher customization long term capital investments.

Disputed distributed sites are smaller size are putting maybe continuing to deliver strong cost effectiveness.

Which also strengthened customer.

So.

Asia.

I think.

<unk>, yes.

Four.

<unk> put in operation.

Because.

Energy efficiency and next Gen E cig minus requirements and a larger and larger scale operators.

We will offer all three.

Different coding operations office.

And we will optimize designs for different market or in the difference.

On the merchant and the water port.

Models.

Customers for different energy conditions.

Will.

We will come more and more common.

For example in higher temperature.

Thank you Oh, sorry, another thing you asked about 2016.

In water and accordingly, according maybe more attractive.

Now it's at.

Yes, 60 now.

Sure.

At.

Some.

Stages for.

Disputed distributed sites are smaller size are putting maybe kicking into tubular strong cost effectiveness. So.

Chip Chip Assembly and testing.

Only we only maybe one or two weeks.

Before we have.

<unk> actual results.

I think.

Sure.

So.

Because.

Yes, so after that we will.

Energy efficiency and next Gen <unk> minus requirements and a larger and larger scale operators.

<unk>.

Product launch.

When the full system testing is complete we will.

The merchant and the water port models.

Now officially introduced this <unk> towards the market.

<unk>.

We will come more and more common yes.

Yes. Thank you.

Thank you.

Sure.

Nangeng Zhang: Thank you.

Nangeng Zhang: Oh, sorry. I think you asked about the Avalon A16 series. The Avalon A16 series now is at the stages for chip assembly and testing. It's only maybe one or two weeks before we will have the full machine testing results. So after that, we will have a product launch. When the full system testing is complete, we will announce officially, introduce this Avalon A16 series to the market. Thank you.

And our next question coming from the line of John <unk> with Needham <unk> Company. Your line is now open.

Thank you Oh, sorry, another thing you asked about 2016.

Anything you're seeing now is as a yes.

Hey, guys. Thanks for taking my question.

Yes, so <unk> now is.

Two for you one if we could just dig a little bit more into the bitcoin treasury strategy in kind of your thoughts on.

At stages.

Stages for.

Chip Chip Assembly and testing.

Some of the big win Treasury companies out there.

We only maybe one or two weeks before we have.

Is there a possibility you could start getting a premium into the stock similar to those type of companies and then as a follow up as you do think about your bitcoin stack.

<unk> actual results.

So.

Yes, so after that we will.

And apologies if I missed this but any way to generate yield off the derivative strategy or anything like that.

Product launch.

When the full system testing is complete we will.

Like some of your peers, where they're able to generate a yield on that bit quaint holding.

Now officially introduced this ASIC that serious towards the market.

Thank you John This is Jim speaking I would like to introduce a little bit.

Thank you.

Operator: Thank you. Our next question is coming from John Todaro with Needham & Company. The line is now open.

Thank you.

And our next question coming from the line of John <unk> with Needham <unk> Company. Your line is now open.

Although we are still in the early stage of doing <unk> strategy I think.

Logan: Hey, guys. Thanks for taking my question. I have two for you. One, if we could just dig a little bit more into the Bitcoin treasury strategy and your thoughts on some of the Bitcoin treasury companies out there. Is there a possibility you could start getting a premium into the stock, similar to those types of companies? As a follow-up, as you do think about your Bitcoin stack, and apologies if I missed this, are there any ways to generate yield off it, derivative strategies, anything like that, like some of your peers where they are able to generate a yield on that Bitcoin holding?

Hey, guys. Thanks for taking my question.

Our approach to to do the contrary management.

Two for you one if we could just dig a little bit more into the bitcoin treasury strategy in kind of your thoughts on.

First thing is to build up that kind of.

Conservative Foundation with the goal to make sure our holding is quite safe and also we would like to increase the long term value and liquidity I think thats the purpose of doing this.

The big win Treasury companies out there.

Is there a possibility you could start getting a premium into the stock similar to those type of companies and then as a follow up as you do think about your bitcoin stack and.

First of all.

And apologies if I missed this but any ways to generate yield off derivative strategy or anything like that.

We have the.

Already demonstrated a way of doing this collateral right.

Like some of your peers, where they're able to generate a yield on that bit quaint holding.

Financing.

Kind of a rising bitcoin market, we can pledge part of our bitcoin to access low cost.

James Cheng: Thank you, John. This is James speaking. I would like to introduce a little bit. Although we are still in the early stage of doing a Bitcoin treasury strategy, I think our approach to do this Bitcoin treasury management, the first thing is to build up a kind of, you know, conservative foundation, with the goal to make sure our holding is quite safe. Also, we would like to increase the long-term value and the liquidity. I think that is the purpose of doing this. First of all, we have the, you know, already demonstrated a way of doing this, collateralized financing. In a kind of rising Bitcoin market, we can pledge part of our Bitcoin to access low-cost capital for high-return projects, such as, you know, miner production and also self-mining expansion for our operation. I think when the financing term ends, we usually can repay the principal.

Thank you John This is Jim speaking I would like to introduce a little bit.

Capital for high return projects.

Although we are still in the early stage of doing <unk> strategy I think.

Such as.

Minor production and also self mining expansion for our operations.

Our approach to to do the contrary management. The first thing is to build up that kind of.

I think the win.

Financing terms and we.

We usually can.

Conservative Foundation with the goal to make sure our holding is quite safe and also we would like to increase the long term value and liquidity I think thats the purpose of doing this.

Repay the principal also we can generate additional financing.

This can also improve the efficiency of our capital use I think that Thats. The first method.

Method.

Candidly I think.

First of all we have.

We can also placed some of the decline in.

<unk> already demonstrated a way of doing this our collateral right.

In short term interest bearing accounts.

Nancy.

As you said, earning a modest yield.

Kind of a rising the coin market.

<unk> also.

We can pledge part of our bitcoin to access low cost.

Make sure it's safe and the compliance.

Capital for high return projects.

In addition, we can also evaluate selective.

Such as.

Minor production and also self mining expansion for our operation I think the win.

Derivative strategies to manage price volatility our capture extra returns under certain market conditions I think.

Financing term and we usually can.

Repay the principal.

Also important.

James Cheng: Also, we can generate additional financing. This can also improve the efficiency of our capital use. I think that is the first method. Secondly, I think we can also place some of the Bitcoin in short-term interest-bearing accounts. As you said, earning a modest yield. Also, make sure it is safe and compliant. In addition, we can also evaluate selective derivative strategies to manage price volatility or capture extra returns under certain market conditions. I think that is also important. So overall speaking, we have a kind of vertically integrated model. This model is quite interesting. We can grow our Bitcoin reserves through multiple channels. For example, accepting Bitcoin as payment for miners. Also, we can mine coins at a kind of a cost below market average. Also, we can directly buy Bitcoin in the secondary market when the prices are more attractive.

Also we can generate additional financing.

So overall speaking.

We have a kind of vertical integrated model.

This can also improve the efficiency of our capital use I think thats the first mass.

<unk> model is quite interesting, we can grow our bitcoin reserves through multiple channels.

Method.

Candidly I think.

For example, accepting the coin as payment for.

We can also placed some of the big coin in.

For miners.

In short term interest bearing accounts.

Also we can mind coins.

As you said, earning a modest yield.

At a kind of a cost of below market average.

Also.

Also we can directly by bitcoin in the secondary market when the prices are more.

Make sure it's safe and the compliance.

In addition, we can also evaluate selective.

More attractive so.

So I think.

Derivative strategies to manage price volatility our capture extra returns under certain market conditions I think that's also important.

Although we are still in the early stage our day contrary has already reached.

1511 coins.

By the end of July it's a new record so overtime.

So overall speaking.

I believe the market will see us not only adds to the kind of.

We have the kind of vertical integrated model.

A hardware maker or mining machine provider of computing solutions.

Model is quite interesting, we can grow our bitcoin reserves through multiple channels.

The whole market, we'll also look at us as a.

For example, accepting the coin as payment for.

Capital.

Coal miners.

Bitcoin Terry company.

Also we can mind coins.

Thank you Joan.

At a kind of a cost of below market average.

Thank you.

Our next question coming from the line of Kevin Dede with H C. Wainwright. Your line is now open.

And also we can directly by big coin in the secondary market when the prices.

More attractive so.

James Cheng: So I think, although we are still in the early stage, our Bitcoin treasury has already reached 1,511 coins by the end of July. It is a new record. So over time, I believe the market will see us not only as a kind of hardware maker or mining machine provider or computing solutions. The whole market will also look at us as a capable Bitcoin treasury company. Thank you. Thank you, John.

Hi, <unk> Hi, James.

So I think.

I'm curious.

Although we are still in the early stage of our deck contrary has already reached.

I'm curious to dig in a little bit deeper following up on John's question.

1511 clients.

By the end of July it's a new record so over time.

Would you consider.

Consider using.

I believe the market will see us not only adds to the kind of.

Bitcoin Treasury to help fund operations it wasn't really clear James.

A hardware maker or mining machine provider of computing solutions.

If that was part of the intention I apologize if I messed that up.

The whole market, we'll also look at us as that.

Kevin.

Capital.

Find a different operations like.

Bitcoin Terry company.

Mining sites expansion and also in certain stage, we also order wafers by utilizing.

Thank you Joan.

Operator: Thank you. Our next question coming from the lineup, Kevin Dean with AC Wainwright. The line is now open.

Thank you.

Our next question coming from the line of Kevin Dede with H C. Wainwright. Your line is now open.

Bitcoins too.

<unk> to get loans.

Logan: Hi, Angie. Hi, James. I'm curious to dig in a little bit deeper, following up on John's question. Would you consider using the Bitcoin treasury to help fund operations? It wasn't really clear, James, if that was part of the intention. I apologize if I messed that up.

Hi, <unk> Hi, James.

I'm curious.

Does that answer your question, Kevin that helps very much I appreciate it James Yes. So also curious about the geographies that you are finding the greatest demand for the Avalon home miners.

I am curious to dig in a little bit deeper following up on John's question.

Would you consider.

Consider using the bitcoin treasury to help fund operations it wasn't really clear James.

And how you intend to market that effort.

You know if that was part of the intention I apologize if I messed that up.

Okay phenomena, okay, yes.

Yeah.

Yes, I think the.

James Cheng: Kevin, to find different operations like, you know, mining sites expansion. In certain stages, we also order waivers by utilizing Bitcoins as a pledge to get loans. Does that answer your question, Kevin?

Kevin Tucson.

Currently.

Different operations like.

We will sell.

Homer Cirrus.

Mining sites expansion and also in certain stage, we also order wafers by utilizing.

Globally, there's many many countries.

But I think the primary.

Big clients to <unk>.

The region is still is still the U S. Yes.

Lash to get loans.

No.

Yes.

Does that answer your question Kevin.

<unk>.

I think we have.

Logan: That helps very much. Appreciate it, James. I am also curious about the geographies that you are finding the greatest demand for the Avalon Home Use Miner Series and how you intend to market that effort.

I appreciate it James Yes. So also curious about the geographies that you are finding the greatest demand for the Avalon home miners.

The home to home manner.

We have a very good.

Matrix in quarter two.

And in quarter three.

And how you intend to market that effort.

It's only one one months a little more than one less than we have.

Okay.

Better much better performance in the quarter or two I don't have the exact numbers, but.

Oh.

Okay.

It's.

Nangeng Zhang: Yes, I think the company sells the Avalon Home Use Miner Series globally. There are many different countries, but I think the primary region is still in the U.S. I think the home miner had a very good matrix in Q2. In Q3, it is only one month, a little more than one month, and it has much better performance than Q2. I do not have the exact numbers, but roughly, it is much better than Q2. The interesting thing is Canaan Inc. is selling the Avalon Home Use Miner Series. Canaan Inc. is trying to sell more heaters in summer, and it is still getting a very good result. I think the home miner is a very new production line for the whole industry. Canaan Inc. is working and learning.

Oh, Okay yeah.

Roughly is much better than quarter two yes, so yeah. So.

Yeah.

Yes, I think the.

It is interesting thing is we are selling.

Currently.

We sell the home of serious.

Well, we are trying to sell more heaters in summer and stewards categorical results.

Globally, there's many many countries.

But I think the primary.

So I think the whole monitor is it's a very new production line for the whole industry.

The region is.

Steel is still the U S. Yes.

So.

We are.

Yes.

I think we have.

Working and learning this is what we're out.

No.

Cut the form for personnel from my personal.

So the whole manner.

We have a very good.

Yes.

I think.

Matrix in the in quarter two.

Home home.

Homeowners today.

And in quarter three.

Can't get.

It's only one one months a little more than one less than we have.

Good.

It's already reached a good a good level for the.

Yes.

<unk>.

Better much better performance in the quarter or two I don't have the exact numbers, but.

For our product.

Perfect.

Customary it's it's miners.

It's Rob.

Our roughly is much better than quarter two yes, so yeah. So.

But for.

Traditional.

Consumer market.

It is interesting thing is we are selling.

Still need to.

<unk>.

Well, we are trying to sell more keepers.

Everything.

Summer.

The user trends.

Stewards catheter recurring results.

So I think the whole monitor is it's a very new production line for the whole industry.

Cost.

And the quality and we're seeing two two reached.

Requirements for traditional consumer markets.

Well we are.

Yes.

Working and learning this is Rob.

So.

This is.

Sure.

Yes.

Nangeng Zhang: For my personal view, I think the home miners today can get a good, it has already reached a good level for the product if the target customer is miners. For the traditional consumer market, Canaan Inc. still needs to enhance everything, including the user experience, cost, and the quality, everything to reach the requirements for traditional consumer markets. This is what Canaan Inc. needs to do next. Canaan Inc. is building a very special team to work on the product itself. I hope this answers your question. Thank you.

Cut the form for personnel.

What we need to do next and we are we're building very.

No.

I think.

Specialty to working on the product itself.

Hum.

Homeowners today.

Can't get.

Yes.

So.

Good.

I Hope this answer your question. Thank you.

It's already reached a good a good level for the.

Thank you.

And given the time constraints, we ask that you. Please at this time limit your question to one question only.

For our product.

Perfect.

Customary it's it's miners.

Our next question coming from the line of Mark Palmer with the Benchmark Company. Your line is open.

But for.

Traditional.

Consumer market.

Yes.

Still need to.

And congratulations on the resilience demonstrated during the quarter.

<unk>.

Everything.

Wanted to see if you could address.

The user experience.

Cost.

The companies.

And the quality averaging two two reached.

Current capital deployment priorities.

Given where the share prices.

Requirements for traditional consumer markets.

Inexpensive the stock certainly appears.

So.

This is.

Yes.

It seems like buybacks would be.

What we need to do next and we are we're building very.

Very much in order I know that there were some executed during the second quarter.

A special team to working on the product itself.

How are you thinking about capital deployment writ large where buybacks fit into the mix versus alternative uses of capital. Thank you.

Yes.

So.

I Hope this answer your question. Thank you.

Operator: Thank you. Given time constraints, we ask that you please, at this time, limit your question to one question only. Our next question coming from the lineup, Mark Palmer with the Benchmark Company. The line is open.

Thank you.

And given time constraints, we ask that you. Please at this time limit your question to one question only.

Yes. Thank you Mark I think we have already completed.

Our next question coming from the line of Mark Palmer with the Benchmark Company. Your line is open.

The 100 million preferred share financing in March after that we have.

Nangeng Zhang: Yes. Good morning, and congratulations on the resilience demonstrated here in the quarter. I wanted to see if you could address Canaan Inc.'s current capital deployment priorities. Given where the share price is, how inexpensive the stock certainly appears, it seems like buybacks would be very much in order. I know that there were some executed during Q2. How are you thinking about capital deployment writ large, where buybacks fit into the mix versus alternative uses of capital? Thank you.

Yes.

And congratulations on the resilience demonstrated during the quarter.

Not used our ATM program.

We have paused the ATM program since February 22.

Wanted to see if you could address.

The companies.

To avoid putting additional pressure on the market, especially after our share price.

Current capital deployment priorities.

Given where the share prices.

Below $2 I think in early February.

Inexpensive the stock certainly appears.

In May we have announced up to $30 million share repurchase program and in June both CEO and myself personally purchased like the 817000 shares.

It seems like buybacks would be.

Very much in order I know that there were some executed during the second quarter.

How are you thinking about.

Capital deployment writ large where buybacks fit into the mix versus alternative uses of capital. Thank you.

I think the inherent space, we believe our shares are significantly undervalued.

So buying back stock at current level is a better use of capital than issuing.

James Cheng: Thank you, Mark. I think we have already completed the $100 million preferred shares financing in March. After that, we have not used our ATM program. We have paused the ATM program since February 20 to avoid putting additional pressure on the market, especially after our share price fell below $2 in early February. Instead, in May, we have announced an up to $30 million share repurchase program. In June, both CEO and myself personally purchased 817,000 shares. I think at the current stage, we believe our shares are significantly undervalued. Buying back stock at the current level is a better use of capital than issuing equity. So far, we have already purchased 3.6 million ABSs. I think that's something we have already done. Also, in using the fund, recently, the demand in Asia remains strong.

Yes. Thank you Mark I think we.

<unk> already completed the.

Equity.

The 100 million preferred shares financing in March after that we have.

So far we have already purchased three 6 million.

Yes.

Not used our ATM program.

I think.

We have paused the ATM program since February 20.

That's something we have already two and also in using the fund recently the demand in.

To avoid putting additional pressure on the market, especially after our share price fell.

In Asia.

Remains strong and I think.

Fell below $2 I think in early February.

Customers interest only expanding their mining fleets from North American customers is steadily recovering so it seems like that.

In May we have.

<unk> up to $30 million share repurchase program and in June both CEO and myself personally purchased like the 817000 shares.

The overall market demand has gone up and we got here.

The owners and the sales growth.

Every quarter is better than the previous one quarter. So this allows us to.

I think the inherent space, we believe our shares are significantly undervalued.

Prioritize user.

Using that capital.

So buying back stock at current level is a better use of capital than issuing.

From the operation to do the operation.

Of course, we can also do some self mining, although it's not as faster as previously.

Equity.

So far we have already purchased three 6 million <unk>.

We are growing our mining fleet.

I think that Thats, something we are trying to trying to do but we will continuously maintain.

I think.

That's something we have already two and also in using their fund recently the demand in.

Maintain flexible in capital allocation.

In Asia remains strong and I think.

We can make all kinds of spending decisions based on the actual business needs.

James Cheng: I think the customers' interest in expanding their mining fleets from North American customers is steadily recovering. It seems like the overall market demand is going up, and we got healthy orders and sales growth. Every quarter is better than the previous one quarter. This allows us to prioritize using the capital from the operation to do the operation. Of course, we can also do some self-mining, although it's not as fast as previously. But still, we are growing our mining fleets. I think that's something we are trying to do. We will continuously maintain flexibility in capital allocation. We can make all kinds of spending decisions based on the actual business needs. We should balance the allocation of miner inventory between sales and self-mining. Usually, we follow a strategy to build to order, keeping some delivery capacity in reserve.

Customers interest on expanding their mining fleets from North American customers is steadily recovering so it seems like that.

We should balance the allocation of minor inventory between sales and sales.

The overall market demand is going up and we got healthy orders and sales growth.

Sales mining.

Usually we follow a ton of.

Our strategy to do to order keeping some delivery capacity in reserves. So I think.

Every quarter is better than the previous one quarter. So this allows us to.

For the capital used in the operation.

Prioritize.

Using that capital.

We always.

From the operation to do the operation.

Do the allocation in between.

Of course, we can also do some self mining, although it's not as faster as previously but still we are growing our mining fleet.

<unk>.

Business needs so make sure.

We have sufficient funds for future.

Of course, we will also do some stock repurchase a recently.

I think that Thats something we are trying to trying to do we will continuously.

We have not stopped any kind of fund raising immediately.

Maintain flexible in capital allocation.

I think.

I Hope I answer your question Mark.

We can make all kinds of spending decisions based on the actual business needs.

Thank you.

Our next question coming from the line of Don.

Shaban with B Riley Securities. Your line is now open.

We should balance the allocation of minor inventory between sales and sales.

Thank you very much operator, Hello, everyone and Jim James.

Sales mining.

Usually we follow his hand up.

Maybe my question is the kind of summary, and follow up of whats been regarding north.

Our strategy to do to order keeping some delivery capacity in reserves. So I think.

North America.

James Cheng: I think for the capital used in the operation, we always do the allocation in between different business needs. So make sure we have the sufficient funds for the future. Of course, we will also do some stock repurchase recently. We will not start any kind of fundraising immediately. I hope I answered your question, Mark.

Plans, so given that many many miners.

For the capital used in the operation.

<unk>.

Kind of postpone the expansion plan do you at HBC AI initiative, how do you see that.

We always.

Do the allocation in between.

Brent.

Business needs so make sure.

Evolution of average selling price.

We have sufficient funds for future.

Let's say by the end of 2025, maybe go in Florida in 2026, Thank you very much.

Of course, we will also do some stock repurchase or recently.

We have not stopped any kind of fund raising immediately.

Yes, I think because.

Scott I just mentioned.

I think.

<unk>.

I Hope I answered your question Mark.

The global market.

Operator: Thank you. Our next question is coming from Hadosh Balin with BVARLY Securities. The line is now open.

Thank you.

Its.

Our next question coming from the line of Don.

Alright.

<unk> currently.

Shaban with B Riley Securities. Your line is now open.

You know the.

I think we mentioned.

Hadosh Balin: Thank you very much, operator. Hello, everyone. James, maybe my question is a kind of summary and follow-up of what has been asked regarding your North America plans. Given that many miners postponed their expansion plan due to HPC AI initiatives, how do you see the evolution of average selling price, let us say, by the end of 2025 and maybe going forward in 2026? Thank you very much.

Thank you very much operator, Hello, everyone and Gn James May.

A number.

Which is it's a harsh price.

Four.

Maybe my question is the kind of summary, and follow up of whats been regarding north.

How many dollars per <unk> per day.

Now today I think it's.

North America.

<unk> is about.

Plans, so given that many many miners.

$58 per share.

<unk>.

<unk> per day.

Kind of put upon the expansion plan do you have to HPT AI initiative, how do you see the evolution of average selling price.

There is.

Experienced number.

Is that this number is higher than 55.

<unk> is a new market for the <unk>.

Let's say by the end of 2025, maybe go in Florida in 2026, Thank you very much.

<unk> market.

But.

It's lower than 55.

Maybe.

Bear market.

Okay.

Countries 58 so.

Okay.

Technically it's.

Markets for <unk>.

Nangeng Zhang: I think because I just mentioned the global market is quite active currently. I think I mentioned a number, which is the hash price for how many dollars per petahash per day. Today, I think it is about $58 per petahash per day. There is an experienced number. If this number is higher than 55, then it is a bull market for the miner market. If it is lower than 55, it is maybe a bear market. Currently, it is 58. Technically, it is a bull market for the miner market. Still, because the unbalanced cost by the tariff policy fluctuations in North America, currently, I think the ASP for the miners is lower than it should be. This is what we are facing today. How to, we are talking higher ASP.

Sure.

Industry.

Four.

Okay.

Sure.

For the.

So it's a minor market.

<unk> zero because.

Yes, I think because.

On balance.

Sure.

Scott just mentioned.

Cost by the tariff policy.

<unk>.

The.

The global market.

Fluctuations in North America so.

Yes.

Part.

Currently I think.

<unk> currently.

ASP for the miners.

Because you know the.

It's lower than it should be.

I think we.

This is.

I mentioned a number.

What we are facing today.

Which is the highest price.

And how to you know we are tracking higher asps.

Four.

How many dollars per <unk> per day.

So.

Now today I think it's.

The matter for US is to re opened channel.

<unk> is about.

$58 per share.

To spend more or.

<unk> per day.

Manufacturer produce more manners.

There is.

Experienced number.

U S.

This number is higher than 55.

Then.

Supply and demand could.

James is through market for.

Could be sold.

So I think for.

Martin end market.

The U S market.

But if.

Got it.

The tariff stuff.

It's lower than 55.

Maybe.

To Asp's, maybe maybe higher.

Bear market.

Currently is 58 so.

What we expected but you.

Technically it's.

Because the cost is higher so we would need to sell the machines at a higher price.

Market for.

Four.

It's not a healthy SP growth pricing.

For the.

So it's a minor market.

Busty or because.

It will happen.

And also most most of the owners.

On balance.

Sure.

Happens outside the U S in Q2.

Cost by the tariff policy.

In Q3.

More and more.

Fluctuations in North America so.

New customers coming.

Currently I think.

Which is coming in Q1 Q2.

ASP for the miners.

It's lower than it should be.

Making deals with us.

So we are.

This is.

What we are facing today.

<unk>.

In I assume.

And how to you know we are tracking higher asps.

Recently, we are we are.

Very.

Cautious optimistic for the USPS.

Nangeng Zhang: The method for us is to reopen the channel to send more or manufacture or produce more miners in the U.S. Then the supply and demand imbalance could be solved. I think for the U.S. market, because the tariff stuff, the ASPs may be higher than what we expected. Because the cost is higher, we need to sell the machines at a higher price. It is not a healthy ASP growth, I think, but it will happen. Most of the orders, it happens outside the U.S. in Q2. In Q3, more and more new customers coming, which is coming in Q1 and Q2, are making deals with us. I think, personally, we are in a very cautious optimistic for the ASPs in late 2025. Because the machine's performance is higher, and we have Avalon A16 series following, we have better machines.

So.

The matter for US is to re opened channel.

In late 'twenty 'twenty five.

To spend more or.

Because.

Sure.

Manufacturer produce more miners.

Machine's performance.

Higher.

U S.

And we have a <unk>.

Then.

Supply and demand could.

Ill.

Following so we have better machines than the ASP should be higher than.

Could be sold.

So I think for.

The U S market.

For sure it should also higher yes.

Got.

The tariff stuff.

Okay. So.

Asp's, maybe maybe higher.

Yes. So this is my comment on that.

What we expected but.

<unk> et cetera. Thank you.

You will know because the cost is higher so we need to sell the machines at a higher price.

Thank you as there are no further questions in queue I'd like to turn the call back over to the company for any closing remarks.

It's not a healthy SP growth pricing.

Thank you everyone for joining us on the call today, if you have any further questions feel free to reach out.

It will happen.

And also most.

Odors as happens outside the U S in Q2.

Directly or through the contact information that you can find on our website.

In Q3.

More and more.

New customers coming which.

That concludes the call.

Which is coming in Q1 Q2.

Call for today. Thank you everyone for attending and you may now disconnect.

Making deals with us.

So we are.

In.

Personally we are.

Very.

Chorus of some mistake for the USPS.

In late 'twenty 'twenty five.

And because.

Machine's performance.

Higher and we have <unk>.

Following so we have better machines than the ASP should be higher than.

Nangeng Zhang: Then the ASPs should be higher than should also higher. This is my comment on the ASP session. Thank you.

For sure it should also higher yes.

Okay. So.

Yes. So this is my comment on the extra et cetera. Thank you.

Operator: Thank you. If there are no further questions in queue, I would like to turn the call back over to the company for any closing remarks.

Yes.

Thank you.

There are no further questions in queue now I'd like to turn the call back over to the company for any closing remarks.

Xu Zheng: Thank you, everyone, for joining us on the call today. If you have any further questions, feel free to reach us directly or through the contact information that you can find on our website. Thanks.

Thank you everyone for joining us on the call today, if you have any further questions feel free to reach out.

Directly or through the contact information that you can find on our website.

Yeah.

Operator: That concludes the conference call for today. Thank you, everyone, for attending, and you may now disconnect.

That concludes the conference call for today. Thank you everyone for attending and you may now disconnect.

Okay.

[music].

Okay.

[music].