Canaan Q4 2025 Canaan Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Canaan Inc Earnings Call
Speaker #1: Ladies and gentlemen, thank you for standing by and welcome to Canaan Inc.'s fourth quarter call. At this time, all 2025 earnings conference participants are in a listen-only session. Following management's prepared remarks, the event is being recorded.
Operator: Ladies and gentlemen, thank you for standing by and welcome to Canaan Inc.'s Q4 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the management's 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, Gwyn Lauber, Investor Relations for the company. Please go ahead, Gwyn.
Operator: Ladies and gentlemen, thank you for standing by and welcome to Canaan Inc.'s Q4 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the management's 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, Gwyn Lauber, Investor Relations for the company. Please go ahead, Gwyn.
Speaker #1: Gwyn Lauber, investor relations, for the company. Please go mode.
Speaker #1: Gwyn, after the now, I'd like to hand the
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 Jin Cheng. Leo 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. 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 we begin, I would like to refer you to our Safe Harbor statement in 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.
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 Jin Cheng. Leo 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. 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 we begin, I would like to refer you to our Safe Harbor statement in 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 #2: conference call. Joining us CEO Nangeng Zhang, and our CFO, Jin James today are Chairman and you, operator. Hello, everyone, and welcome to our earnings Development, and Xi President of Capital Markets and Corporate also be available during the question-and-answer session.
Speaker #2: Our CEO will start the call by providing an overview of the company and performance highlights for the
Speaker #2: quarter. Our CFO will then period. questions, before Before we open up the call for your Thank Cheng. we begin, I would like to refer you to our Safe Harbor statement in our earnings press provide details on the company's Leo Wong, Vice ahead, operating and financial results for the outlook for the company, and statements that estimate or the performance of the company.
Speaker #2: These statements include today's press release, forward-looking statements; statements that may be made in these statements speak only as of performance and are subject to risks and 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 annual report to project future operating results and not guarantee future performance.
Speaker #2: these statements include today's press release, forward-looking statements; statements that may be made in These statements speak only as of performance and are subject to risks and Please refer to the press release and project future operating results and not guarantee future the risk factors and documents we file with the Securities and Exchange Commission, including our most recent annual report uncertainties and assumptions.
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 risks, 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 annual 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. 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.
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 risks, 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 annual 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. 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 #2: Cause actual results to differ materially from those set forth in such statements. In today, and the company assumes on Form 20-F. In addition, during today's call, we will discuss certain non-GAAP financial measures, information on risks and uncertainties, and both GAAP financial measures, which we believe are useful as supplemental measures of the company's performance.
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. With that, I will now turn the call over to our chairman and CEO, Nangeng Zhang. Please go ahead.
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. With that, I will now turn the call over to our chairman and CEO, Nangeng Zhang. Please go ahead.
Speaker #2: comparable GAAP results in our measures including reconciliations with website. With that, I the company's will now turn the call over to our Chairman earnings press release which is posted on additional disclosures regarding not as a substitute for or Zhang.
Speaker #3: Hello, everyone. earnings call. Together with
Speaker #3: Hello, everyone. earnings call. Together with This
Speaker #3: Hello, everyone. earnings call. Together with This Canaan. headquarters to discuss Welcome to our ahead. our Q4 is NG, CEO of 2025 business results and you.
Nangeng Zhang: Hello, everyone. This is NG, CEO of Canaan. Welcome to our earnings call. Together with our CFO, James, we are calling from our Singapore headquarters to discuss our Q4 2025 business results and the latest updates with you. During the first quarter, Bitcoin prices experienced significant volatility. In early October, Bitcoin briefly broke above its previous all-time high, reaching approximately $126,000. It then fell below $100,000 in mid-November and dropped to below $90,000 by the end of December. At the same time, the wave of new hash rates that entered the pipeline during the price surge in the third quarter came online, pushing total network hash rate to a record high. This put strong pressure on miners' profit margins. Facing this highly volatile market, we managed our sales pace well at the beginning of Q4.
Nangeng Zhang: Hello, everyone. This is NG, CEO of Canaan. Welcome to our earnings call. Together with our CFO, James, we are calling from our Singapore headquarters to discuss our Q4 2025 business results and the latest updates with you. During the first quarter, Bitcoin prices experienced significant volatility. In early October, Bitcoin briefly broke above its previous all-time high, reaching approximately $126,000. It then fell below $100,000 in mid-November and dropped to below $90,000 by the end of December. At the same time, the wave of new hash rates that entered the pipeline during the price surge in the third quarter came online, pushing total network hash rate to a record high. This put strong pressure on miners' profit margins. Facing this highly volatile market, we managed our sales pace well at the beginning of Q4.
Speaker #3: Due calling from our Singapore the latest updates with
Speaker #3: to the first quarter, it Please go approximately October, Bitcoin briefly $126,000. It broke above its previous all-time no obligation to revise and dropped to below comprises experienced significant in mid-November, volatility, in early the end of December.
Speaker #3: At the same time, the wave of demand then fell below $100K during the price surge in the third quarter. This came as new hash rates entered the pipeline, raising the rate to a record high.
Speaker #3: This put strong online, pushing total network hash highly volatile. Our sales paced well at the beginning of Q4. We secured a large order from a major, and efficiently mobilized resources for delivery.
Nangeng Zhang: We secured a large order from a major customer in North America and efficiently mobilized resources to support production and the smooth delivery. At the same time, we steadily expanded our self-mining operations and explored diversified mining partnerships, signing several pilot projects. As a result, our total revenue for Q4 reached $196 million, up 30.4% quarter-over-quarter and 121.1% year-over-year. This was our highest quarterly revenue in the past three years and exceeded the midpoints of our guidance range of $175 million to $205 million. We achieved a major breakthrough in mining machine sales in this quarter. Benefiting from our continued focus on the North American market, we secured a large-scale order of more than 50,000 A15 Pro models from a leading mining company.
Nangeng Zhang: We secured a large order from a major customer in North America and efficiently mobilized resources to support production and the smooth delivery. At the same time, we steadily expanded our self-mining operations and explored diversified mining partnerships, signing several pilot projects. As a result, our total revenue for Q4 reached $196 million, up 30.4% quarter-over-quarter and 121.1% year-over-year. This was our highest quarterly revenue in the past three years and exceeded the midpoints of our guidance range of $175 million to $205 million. We achieved a major breakthrough in mining machine sales in this quarter. Benefiting from our continued focus on the North American market, we secured a large-scale order of more than 50,000 A15 Pro models from a leading mining company.
Speaker #3: At the same time, margins. self-mining operations support production and the smooth and explored diversified mining Facing this projects, other results we steadily expanded our our total revenue for the four-quarter reached 30.4% quarter over $196 This was our highest $121.1% year over year.
Speaker #3: Million up quarterly revenue in the past three years, midpoint of our guidance and exceeded the pressure on miners' profit to $205 million, $175 million, million.
Speaker #3: We achieved a major breakthrough range of in mining machine sales in this quarter, benefiting from North American market. We secured a large-scale order of more than $50,000 A15 Pro models from a leading mining company.
Nangeng Zhang: This milestone collaboration drove our strong sales performance and underscores the market's growing recognition of our product performance and delivery capability. To ensure high-quality delivery, our supply chain, production, and operation teams worked closely together to ensure smooth and high-quality execution. This resulted in an all-time high of 14.6 exahash per second in computing power sold during the quarter, up 45.7% quarter-over-quarter, and 60.9% year-over-year. While average selling price declined slightly due to volume discounts for large-scale orders, the surge in sales volume drove product revenue to $165 million, up 39.1% quarter-over-quarter and 124.5% year-over-year. This marks our highest single-quarter revenue in the past 13 quarters. We will continue creating value for customers through product upgrades and customized services to deepen our partnerships with global customers.
Nangeng Zhang: This milestone collaboration drove our strong sales performance and underscores the market's growing recognition of our product performance and delivery capability. To ensure high-quality delivery, our supply chain, production, and operation teams worked closely together to ensure smooth and high-quality execution. This resulted in an all-time high of 14.6 exahash per second in computing power sold during the quarter, up 45.7% quarter-over-quarter, and 60.9% year-over-year. While average selling price declined slightly due to volume discounts for large-scale orders, the surge in sales volume drove product revenue to $165 million, up 39.1% quarter-over-quarter and 124.5% year-over-year. This marks our highest single-quarter revenue in the past 13 quarters. We will continue creating value for customers through product upgrades and customized services to deepen our partnerships with global customers.
Speaker #3: collaboration drove our strong sales performance our continued focus on the of our product performance and the delivery capability. To ensure high-quality delivery, our supply and endless goals the teams worked closely together to ensure smooth and high-quality chain production and operation execution.
Speaker #3: resulted in an all-time high of $14.6x per second in computing power sold market's growing recognition up quarter over quarter and 60.9% year over year.
Speaker #3: price declined during the quarter, While average selling This milestone This 45.7% discounts for large-scale surge in sales volume drove product revenue slightly due to volume million orders, the up 39.1% quarter over quarter and year.
Speaker #3: This marks our highest single-quarter revenue in the past 13 quarters. We will continue creating value by offering customized services to deepen our partnerships with global customers.
Speaker #3: And customers through although the company $124.5% year over focused most of its resources on rig sales in Q4, our self-mining operations continue to progress steadily under the principle of resources alignment and the efficiency In Q4, we steadily expanded and first.
Nangeng Zhang: And although the company focused most of its resources on rig sales in Q4, our self-mining operations continue to progress steadily under the principle of resources alignment and efficiency first. In Q4, we steadily expand and optimized global development. At the end of the fourth quarter, total installed hash rate increased 8.6% quarter-over-quarter to 9.91 exahash per second, of which 7.7 exahash per second was energized. We mined approximately 300 Bitcoins during the quarter, further contributing to our cryptocurrency reserves. At the end of 2025, our crypto assets holding were 1,750 Bitcoins and 3,951 Ethereum. This holding reflects the combined contribution from our mining activities and ongoing DAT management strategies. In the current market environment, this crypto portfolio not only provides liquidity, but also offers potential upsides if crypto prices recover. We continue to explore innovative mining applications and promote deeper integration between computing and energy.
Nangeng Zhang: And although the company focused most of its resources on rig sales in Q4, our self-mining operations continue to progress steadily under the principle of resources alignment and efficiency first. In Q4, we steadily expand and optimized global development. At the end of the fourth quarter, total installed hash rate increased 8.6% quarter-over-quarter to 9.91 exahash per second, of which 7.7 exahash per second was energized. We mined approximately 300 Bitcoins during the quarter, further contributing to our cryptocurrency reserves. At the end of 2025, our crypto assets holding were 1,750 Bitcoins and 3,951 Ethereum. This holding reflects the combined contribution from our mining activities and ongoing DAT management strategies. In the current market environment, this crypto portfolio not only provides liquidity, but also offers potential upsides if crypto prices recover. We continue to explore innovative mining applications and promote deeper integration between computing and energy.
Speaker #3: optimized global development of the end of the fourth quarter. Total installed hash rate increased 8.6% quarter over quarter to 9.91x per 7.7x per second 300 Bitcoins during the Further contributing to our quarter.
Speaker #3: cryptocurrency was energized. reserves. At the end of 2025, our crypto assets holding were $3,951 Ethereum. $1,750 reflects the combined This holding and ongoing DAT management strategies.
Speaker #3: In the Bitcoins and current market only provides environment, this crypto portfolio not upsides if crypto liquidity but also offers potential prices explore innovative mining applications and promote deeper integration between recover.
Speaker #3: Computing and energy. In October, we partnered with a local energy infrastructure provider in Canada to convert flare natural gas at wheelhead into computing power. This project marks our initial step as we continue to utilize standard energy toward broader participation in energy infrastructure.
Nangeng Zhang: In October, we partnered with a local energy infrastructure provider in Canada to convert flared natural gas at wellheads into computing power. This project marks our initial step from utilizing standard energy toward broader participation in energy infrastructure. It demonstrates the value of high-performance computing within emerging energy systems, and opens up more space and long-term sustainability for expansion of our mining business. In R&D and supply chain management, we maintain our focus on product performance, driving technological upgrades in tandem with capacity optimization. Last October, we officially launched the A16 XP, our flagship next-generation air-cooled model. It achieved breakthroughs across multiple performance matrixes by delivering over 300 terahash per second per unit, with an industry-leading power efficiency of 12.8 joules per terahash. This showcases our deep technical and R&D expertise in the design of high-performance A6 chips.
Nangeng Zhang: In October, we partnered with a local energy infrastructure provider in Canada to convert flared natural gas at wellheads into computing power. This project marks our initial step from utilizing standard energy toward broader participation in energy infrastructure. It demonstrates the value of high-performance computing within emerging energy systems, and opens up more space and long-term sustainability for expansion of our mining business. In R&D and supply chain management, we maintain our focus on product performance, driving technological upgrades in tandem with capacity optimization. Last October, we officially launched the A16 XP, our flagship next-generation air-cooled model. It achieved breakthroughs across multiple performance matrixes by delivering over 300 terahash per second per unit, with an industry-leading power efficiency of 12.8 joules per terahash. This showcases our deep technical and R&D expertise in the design of high-performance A6 chips.
Speaker #3: It demonstrates the value of high-performance energy systems and opens long-term business. In R&D and the supply chain sustainability for expansion of our mining management, we maintained our focus on product performance, driving technological upgrades optimization.
Speaker #3: Last October, we officially launched the in tandem with capacity A16 XP our flagship next-generation air-cooled model it achieved breakthroughs across multiple performance matrix by up more space and the terahash per second per an industry-leading power efficiency of 12.8 joules per terahash.
Speaker #3: This showcases our unit with our deep technical and R&D expertise in delivering over 300 design chips. As we continue to advance our product generation updates and upgrades, we work closely with our wafer foundry partners to optimize manufacturing processes. These efforts have led to higher yields for our A15 series, allowing us to deliver more computing power from the same amount of wafers.
Nangeng Zhang: As we continue to advance our product generation upgrades, we work closely with our wafer foundry partners to optimize manufacturing processes. These efforts have led to higher yields and lower costs for our A15 Series, allowing us to deliver more computing power from the same amount of wafers. On the supply chain front, our production footprint across Malaysia, the US, and Mainland China allows us to remain compliant with flexibility adapting to an increasingly complex global trade environment. During the mass delivery of the large-scale order this quarter, our teams across manufacturing, quality control, and logistics worked in close coordination, successfully withstanding the due pressure of shipment volume and tight timelines. By early January 2026, the entire order had been fully delivered, demonstrating the resilience and execution strength of our supply chain. In summary, 2025 was a challenging year.
Nangeng Zhang: As we continue to advance our product generation upgrades, we work closely with our wafer foundry partners to optimize manufacturing processes. These efforts have led to higher yields and lower costs for our A15 Series, allowing us to deliver more computing power from the same amount of wafers. On the supply chain front, our production footprint across Malaysia, the US, and Mainland China allows us to remain compliant with flexibility adapting to an increasingly complex global trade environment. During the mass delivery of the large-scale order this quarter, our teams across manufacturing, quality control, and logistics worked in close coordination, successfully withstanding the due pressure of shipment volume and tight timelines. By early January 2026, the entire order had been fully delivered, demonstrating the resilience and execution strength of our supply chain. In summary, 2025 was a challenging year.
Speaker #3: On the supply chain front, our production footprint across yields and lower costs Malaysia the US and the mainland China allow us to remain compliant with flexibility adapting to increasingly complex global trade environment.
Speaker #3: During the mass delivery of the large-scale order this quarter, our teams across manufacturing quality control and logistics worked in close successfully withstanding the due pressure of shipment volume early January 2026, the entire order had Demonstrating that the resilience and the been fully delivered.
Speaker #3: coordination execution strength of our supply chain. In summary, 2025 was a challenging year. We navigated a while continuing to expand our business complex international trade environment across multiple dimensions.
Nangeng Zhang: We navigated a complex international trade environment while continuing to expand our business across multiple dimensions. For the full year, total revenue was $530 million, surging 96.7% year-over-year. We strengthened our presence in North America, partnered with leading customers, and increased total computing power sold by 40.7% year-over-year to a record 36.5 exahash per second. In terms of products, we achieved mass production of the upgraded A15 series, launched the next-generation A16 series, and expanded our home series into a multifunctional product lineup, significantly improving revenue growth and brand influence. Our mining business reached a key milestone in 2025, with full-year revenue exceeding $100 million for the first time. Global installed hash rate rose 82%, and the energized hash rate grew 61% year-over-year. We now operate nine mining projects globally, with total power capacity exceeding 250MW.
Nangeng Zhang: We navigated a complex international trade environment while continuing to expand our business across multiple dimensions. For the full year, total revenue was $530 million, surging 96.7% year-over-year. We strengthened our presence in North America, partnered with leading customers, and increased total computing power sold by 40.7% year-over-year to a record 36.5 exahash per second. In terms of products, we achieved mass production of the upgraded A15 series, launched the next-generation A16 series, and expanded our home series into a multifunctional product lineup, significantly improving revenue growth and brand influence. Our mining business reached a key milestone in 2025, with full-year revenue exceeding $100 million for the first time. Global installed hash rate rose 82%, and the energized hash rate grew 61% year-over-year. We now operate nine mining projects globally, with total power capacity exceeding 250MW.
Speaker #3: was For the full year, total revenue $530 million surging $96.7% year over year with strengthened our presence with leading customers and the increased total competing power sold by in North America partnered $40.7% year over year to a record terms of products, we $36.5x per second.
Speaker #3: achieved mass production of the upgraded A15 series launched the next generation A16 series and expanded our home series into a multifunctional product lineup. In improving revenue growth and the business reached a key milestone in brand influence.
Speaker #3: Significantly 2025 with full year revenue exceeding $100 million for the first time global installed 82% and energized hash rate grew 61% year over Our mining hash rate rose year.
Speaker #3: mining projects globally with We now operate nine total power capacity into innovate energy megawatts we also expanded scenario by exploring wind power starlit gas and the computing generate heat reuse driving deeper integration of computing and energy.
Nangeng Zhang: We also expanded into an innovative energy scenario by exploring wind power, stranded gas, and computing-generated heat reuse, driving deeper integration of computing and energy. We completed the deployment of assembly and production capabilities across Malaysia, the US, and Mainland China, building a flexible and resilient global delivery system. We also established our digital assets tier three management framework, enhancing our crypto reserve capacity and capital allocation flexibility to support our long-term development. As we enter 2026, the external environment remains highly volatile. Shifts in macro liquidity and risk appetite are making digital assets prices and industry demand more psychological and phase-driven. We do not base our operations on short-term views of price movements. Instead, we focus on navigating cycles through controllable factors, including product competitiveness, delivery and operational capabilities, inventory and cash flow discipline, compliance, as well as lower cost and more scalable energy and infrastructure capabilities.
Nangeng Zhang: We also expanded into an innovative energy scenario by exploring wind power, stranded gas, and computing-generated heat reuse, driving deeper integration of computing and energy. We completed the deployment of assembly and production capabilities across Malaysia, the US, and Mainland China, building a flexible and resilient global delivery system. We also established our digital assets tier three management framework, enhancing our crypto reserve capacity and capital allocation flexibility to support our long-term development. As we enter 2026, the external environment remains highly volatile. Shifts in macro liquidity and risk appetite are making digital assets prices and industry demand more psychological and phase-driven. We do not base our operations on short-term views of price movements. Instead, we focus on navigating cycles through controllable factors, including product competitiveness, delivery and operational capabilities, inventory and cash flow discipline, compliance, as well as lower cost and more scalable energy and infrastructure capabilities.
Speaker #3: We completed the deployment of capabilities across Malaysia, the US, and mainland China, building a flexible assembly and production system. We also established resilient global delivery assets, a T3 management framework, and enhanced our digital, crypto, and capital allocation flexibility to support our long-term development.
Speaker #3: As remained highly we enter volatile shifts in macro reserve capacity risk appetite are making digital assets prices and the industry demand more psychological and face driven.
Speaker #3: We do not base 2026 and the external environment of our operations on short-term views of price. Instead, we focus on navigating cycles and product factors, including liquidity and the competitiveness of delivery and operational capabilities, inventory and cash flow discipline, compliance, as well as lower cost and the more scalable energy and infrastructure capabilities.
Speaker #3: This approach has enabled us to remain resilient and achieve growth in the complex environment of 2025. More importantly, next stage as being we do not see Canaan's defined merely as an or a single-load equipment provider computing player we have a clear long-term infrastructure are becoming increasingly HPC collocation may appear to be two different business vision computing and energy on the surface but they are highly complementary as the infrastructure level.
Nangeng Zhang: This push has enabled us to remain resilient and achieve growth in the complex environment of 2025. More importantly, we do not see Canaan's next stage as being defined merely as an equipment provider or a single-load computing player. We have a clearer long-term vision. Computing and energy infrastructure are becoming increasingly integrated. Bitcoin mining and AI HPC Colocation may appear to be two different businesses on the surface, but they are highly complementary at the infrastructure level. They share electricity facilities, power distribution, cooling systems, and human and technical resources for operations and maintenance. By leveraging different workload characteristics, we can improve power utilization efficiency and overall project economics. At the same time, these applications can interact with power grid more constructively.
Nangeng Zhang: This push has enabled us to remain resilient and achieve growth in the complex environment of 2025. More importantly, we do not see Canaan's next stage as being defined merely as an equipment provider or a single-load computing player. We have a clearer long-term vision. Computing and energy infrastructure are becoming increasingly integrated. Bitcoin mining and AI HPC Colocation may appear to be two different businesses on the surface, but they are highly complementary at the infrastructure level. They share electricity facilities, power distribution, cooling systems, and human and technical resources for operations and maintenance. By leveraging different workload characteristics, we can improve power utilization efficiency and overall project economics. At the same time, these applications can interact with power grid more constructively.
Speaker #3: They facilities power distribution cooling integrated. systems and the human and technical resources from for share electricity operations and maintenance. By leveraging different Bitcoin mining and AI utilization efficiency and characteristics we can improve power grid more attractively they can absorb energy when the power supply is economics.
Nangeng Zhang: They can absorb energy when the power supply is abundant and reduce the load when the grid is constrained, ultimately contributing to a more resilient and dispatchable computing infrastructure. So in 2026, our strategy centers on two core pillars, with execution as our top priority, securing proven models, streamlining non-repeatable pilots, and laying the groundwork early for long-term capabilities. Our first track focuses on power and computing infrastructure. We are shifting our strategy from securing power resources from an optimistic asset-light approach to a more systematic upstream development path to secure reliable and economic power resources and leverage our North American resources base built since 2022. We will prioritize applying for power directly rather than bidding for capacity within existing third-party projects. We have made significant progress on a robust pipeline to secure direct power capacity in the US.
Nangeng Zhang: They can absorb energy when the power supply is abundant and reduce the load when the grid is constrained, ultimately contributing to a more resilient and dispatchable computing infrastructure. So in 2026, our strategy centers on two core pillars, with execution as our top priority, securing proven models, streamlining non-repeatable pilots, and laying the groundwork early for long-term capabilities. Our first track focuses on power and computing infrastructure. We are shifting our strategy from securing power resources from an optimistic asset-light approach to a more systematic upstream development path to secure reliable and economic power resources and leverage our North American resources base built since 2022. We will prioritize applying for power directly rather than bidding for capacity within existing third-party projects. We have made significant progress on a robust pipeline to secure direct power capacity in the US.
Speaker #3: Abundant and reduce the load when the grid ultimately contributing to a more workloads dispatchable computing, resilient and can interact with power infrastructure. So in 2026, our strategy centers on, at the same, two core our top priority models: streamlining non-repeatable pilots and laying the pillars with execution as scaling proven groundwork early for long-term capabilities.
Speaker #3: Our first track focus on power and the computing strategy from securing power resources from an optimistic asset light approach to a more systematic upstream development path.
Speaker #3: To secure infrastructure we are shifting our reliable and economic power resources and leverage our North American resources base built since 2022 we will prioritize applying for power bidding for capacity within existing third-party projects.
Speaker #3: We have made significant progress on a robust pipeline to secure direct power in the US. We are confident of securing substantial load by capacity at scale by the year-end.
Nangeng Zhang: We are confident of securing substantial load by the year-end of 2026, potentially reaching the gigawatt scale. At the same time, we are exploring ways to integrate Bitcoin mining with AI HPC colocation. This approach can improve returns on invested capital while supporting dynamic load management for the power grid and strengthening our existing positive relationships with grid operators. The development of power and infrastructure is not a sprint but a long journey with steady gains. The process spans multiple stages, including site selection, then the grid interconnection assessments, negotiation with power partners, contract drafting, engineering, construction, and commissioning. Each step requires careful and deliberate execution. Accordingly, our primary objective of 2026 is to establish a pipeline of executable projects and clear development pathways. We do not intend to pursue one-off large-scale capital outlay. Instead, we will move forward within a framework of capital discipline.
Nangeng Zhang: We are confident of securing substantial load by the year-end of 2026, potentially reaching the gigawatt scale. At the same time, we are exploring ways to integrate Bitcoin mining with AI HPC colocation. This approach can improve returns on invested capital while supporting dynamic load management for the power grid and strengthening our existing positive relationships with grid operators. The development of power and infrastructure is not a sprint but a long journey with steady gains. The process spans multiple stages, including site selection, then the grid interconnection assessments, negotiation with power partners, contract drafting, engineering, construction, and commissioning. Each step requires careful and deliberate execution. Accordingly, our primary objective of 2026 is to establish a pipeline of executable projects and clear development pathways. We do not intend to pursue one-off large-scale capital outlay. Instead, we will move forward within a framework of capital discipline.
Speaker #3: At the same time, we are gigawatt exploring ways to integrate Bitcoin mining with AI HPC collocation. 2026 potential reaching—this approach can improve returns while supporting dynamic load on invested capital management for the power grid and strengthening our positive relationships with operators.
Speaker #3: The development of grid power and the infrastructure is not a sprint but a long journey with steady gains. The process spans multiple stages, including site selection, then the grid assessments, negotiation, interconnection partners, contract with power structuring, engineering, construction, and the commissioning.
Speaker #3: Requires careful and each step execution accordingly. Our primary objective of 2026 is executable: to establish a pipeline of projects and clear development pathways.
Speaker #3: Requires careful and each step execution accordingly. Our primary objective of 2026 is, despite not intending to pursue one of large-scale capital outlay, instead we will move forward within a framework of capital discipline. We will use project financing as one of key tools, relying on asset-level cash flows, leverage partnerships, and expansion.
Nangeng Zhang: We will leverage partnerships and project financing as key tools, relying on asset-level cash flows and project-level financing to support expansion. This approach limits unnecessary volatility in our overall financial position. This also means we will prioritize securing high-quality power resources that are well-suited for AI HPC Colocation. Second, in the consumer and small to medium-sized business segments, we will take a more systematic approach to building our 2C SMB business in 2026. Last year, we saw strong potential on both the demand side and the gross margin structure for these products. But we also understand that success in the consumer market is hard. Users expect excellent product experience, stability, and attention to detail and service. And we must treat this market with complete respect. That's why in 2026, we will continue to improve our product line and launch new models.
Nangeng Zhang: We will leverage partnerships and project financing as key tools, relying on asset-level cash flows and project-level financing to support expansion. This approach limits unnecessary volatility in our overall financial position. This also means we will prioritize securing high-quality power resources that are well-suited for AI HPC Colocation. Second, in the consumer and small to medium-sized business segments, we will take a more systematic approach to building our 2C SMB business in 2026. Last year, we saw strong potential on both the demand side and the gross margin structure for these products. But we also understand that success in the consumer market is hard. Users expect excellent product experience, stability, and attention to detail and service. And we must treat this market with complete respect. That's why in 2026, we will continue to improve our product line and launch new models.
Speaker #3: This financing-to-support approach limits unnecessary volatility in our overall financial position. This also, at the project level, means we will have high-quality power resources that are well suited for AI HPC collocation.
Speaker #3: Second, in the consumer and the small to prioritize secure medium-sized business segments we will take a more approach to building our 2C SMB business in 2026.
Speaker #3: Last year, we saw strong potential on both the demand side and the gross margin structure for these products. We understand that as a success. But we also systematically worked hard.
Speaker #3: User expect excellent product experience stability and in the consumer market is service. And we must attention to detail and treat this market with complete respect.
Speaker #3: That's why in 2026 we will continue to improve our product line and launch a new models. At the same time, we will rise our standards and take approach long-term product reputation matters.
Nangeng Zhang: At the same time, we will raise our standards and take a more cautious approach. Long-term product reputation matters. We will focus on stability, ease of use, noise control, and user experience as our top priorities. Also, we will continue to strengthen our product capabilities. While we will also focus heavily on building out our channels, a key priority of growing our 2C and SMB business. Our product experience has shown that the consumer market, the core competitiveness, comes not only from the product itself but also from the strengthening of our channels and the service system. In 2026, we will make systematic investments in this area. This includes partnerships with online platforms, expanding our offline distributor network, improving after-sales services and content operations, and building more efficient user engagement and convention mechanisms. Our message is clear.
Nangeng Zhang: At the same time, we will raise our standards and take a more cautious approach. Long-term product reputation matters. We will focus on stability, ease of use, noise control, and user experience as our top priorities. Also, we will continue to strengthen our product capabilities. While we will also focus heavily on building out our channels, a key priority of growing our 2C and SMB business. Our product experience has shown that the consumer market, the core competitiveness, comes not only from the product itself but also from the strengthening of our channels and the service system. In 2026, we will make systematic investments in this area. This includes partnerships with online platforms, expanding our offline distributor network, improving after-sales services and content operations, and building more efficient user engagement and convention mechanisms. Our message is clear.
Speaker #3: and the user on stability easy of use noise control experience as our top We will focus capabilities while we will also focus heavily strengthen our on building out our channels a key priority SMB business.
Speaker #3: Our product experience has shown that of growing our 2C and the core product priorities. product itself but also from the consumer market Also we will continue to competitiveness comes not only from the 2026 we will make a systematic investment in this area this includes partnerships with service system.
Speaker #3: Offline distribution network improving after-sales services and the content operations. And building more online platforms, expanding our efficient user engagement and the convention mechanisms. Our message is clear: even in areas where we are still catching up, we are committed to putting in real efforts and resources. For long-term success, we will go all in.
Nangeng Zhang: Even in areas where we are still catching up, we are committed to putting in real efforts and resources. For areas that are key to long-term success, we will go all in to make sure the business line becomes a more stable and cycle-resistant revenue contributor. Lastly, I will share our view on the operating pace for 2026 and our preparations. From an operational standpoint, we expect 2026 to show clear stage-by-stage correct statistics. Industry demand and pricing may remain under pressure during the first half of this year. Our focus will be on maintaining strong discipline in cash flow and inventory, strengthening product and delivery capabilities, and advancing key initiatives in power and infrastructure early on. At the same time, we are preparing our supply chain and execution teams for potential demand recovery later in the year.
Nangeng Zhang: Even in areas where we are still catching up, we are committed to putting in real efforts and resources. For areas that are key to long-term success, we will go all in to make sure the business line becomes a more stable and cycle-resistant revenue contributor. Lastly, I will share our view on the operating pace for 2026 and our preparations. From an operational standpoint, we expect 2026 to show clear stage-by-stage correct statistics. Industry demand and pricing may remain under pressure during the first half of this year. Our focus will be on maintaining strong discipline in cash flow and inventory, strengthening product and delivery capabilities, and advancing key initiatives in power and infrastructure early on. At the same time, we are preparing our supply chain and execution teams for potential demand recovery later in the year.
Speaker #3: To make sure the business line becomes more stable for areas that are key to and the cycle-resistant revenue contributor. Lastly, I will share our view on the operating pace for 2026 and our preparations.
Speaker #3: From an operational standpoint we expect 2026 to stage-by-stage correct show a clear statistics. Industry demand and pricing may remain under pressure during the first half of this year.
Speaker #3: Our focus will be on mainstreaming and maintaining a strong discipline in inventory, strengthening product and delivery capabilities, and advancing key initiatives in powering cash flow and infrastructure early on.
Speaker #3: At the same time, we are preparing our supply chain and the execution teams for potential demand recovery later in the year. If the industry presents a clear structural opportunity, we will be ready to act quickly.
Nangeng Zhang: If the industry presents a clear structural opportunity, we will be ready to act quickly with strong execution and healthy cost structure to capture market share and grow efficiently. We believe that this strategy, centered on execution and long-term capability building, will allow Canaan to remain competitive within Bitcoin mining value chain and gradually become a trusted infrastructure participant with the computing power and energy ecosystem. Our goal is to create more sustainable long-term value for our customers, partners, and shareholders. Before concluding, I would like to note that the outlook above contains forward-looking statements. Actual results may vary due to changes in macroeconomic conditions, industry cycles, regulations, and market dynamics. We will continue to communicate with transparency and respond to market expansions through clear, verifiable execution progress.
Nangeng Zhang: If the industry presents a clear structural opportunity, we will be ready to act quickly with strong execution and healthy cost structure to capture market share and grow efficiently. We believe that this strategy, centered on execution and long-term capability building, will allow Canaan to remain competitive within Bitcoin mining value chain and gradually become a trusted infrastructure participant with the computing power and energy ecosystem. Our goal is to create more sustainable long-term value for our customers, partners, and shareholders. Before concluding, I would like to note that the outlook above contains forward-looking statements. Actual results may vary due to changes in macroeconomic conditions, industry cycles, regulations, and market dynamics. We will continue to communicate with transparency and respond to market expansions through clear, verifiable execution progress.
Speaker #3: With strong execution and healthy cost on the growth structure to capture market share efficiently, we believe the strategy is centered on execution and the long-term capability that this is building.
Speaker #3: We will allow Canaan to within Bitcoin mining value chain and gradually become a trusted, remain competitive infrastructure participant with the computing power and energy ecosystem.
Speaker #3: Our goal is to sustainable long-term value for our customers partners and create more shareholders. Before the outlook about contains forward-looking statements. Actual results may vary due to concluding I would like to note that changes in macroeconomic conditions.
Speaker #3: Industry cycles regulations and market dynamics. We will continue to communicate with transparency and respond to clear verifiable execution progress. macroeconomic uncertainties ongoing monetary include tightening market expansions through involving geopolitical developments and the heightened volatility in the digital asset Given recent global market we maintain a relatively cautious view about market environment in the first quarter of 2026.
Nangeng Zhang: Given recent global macroeconomic uncertainties, including ongoing monetary tightening involving geopolitical developments and heightened volatility in the digital asset market, we maintain a relatively cautious view about the market environment in the first quarter of 2026. As global miners have adopted a wait-and-see approach in response to the recent decline in Bitcoin prices, the sale of mining rigs is facing considerable challenges. We expect total revenue for the first quarter of 2026 to be in the range of $60 to 70 million. This outlook is based on current market conditions and operating assuming patience. However, actual results may differ due to policy uncertainty and market volatility. This concludes my preparatory remarks. Thank you, everyone. Now I will hand it to our CFO, James. Thank you, NG. And good day, everyone. This is James, CFO of Canaan. I'm pleased to share our Q4 financial performance with you.
Nangeng Zhang: Given recent global macroeconomic uncertainties, including ongoing monetary tightening involving geopolitical developments and heightened volatility in the digital asset market, we maintain a relatively cautious view about the market environment in the first quarter of 2026. As global miners have adopted a wait-and-see approach in response to the recent decline in Bitcoin prices, the sale of mining rigs is facing considerable challenges. We expect total revenue for the first quarter of 2026 to be in the range of $60 to 70 million. This outlook is based on current market conditions and operating assuming patience. However, actual results may differ due to policy uncertainty and market volatility. This concludes my preparatory remarks. Thank you, everyone. Now I will hand it to our CFO, James.
Speaker #3: As global miners have adopted a wait-and-see approach in response to the recent decline in Bitcoin prices the sale of mining considerable challenges. While we rigs are facing expect total revenue for the first quarter of 2026 to be in $60 to the range of $70 million US dollars.
Speaker #3: This outlook is based conditions. And the operating assume patience. However actual results may differ due to policy uncertainty and my prepared remarks. Thank volatility.
Speaker #3: on current market you everyone. Now I will hand it to our CFO James.
Speaker #3: on current market you everyone. Now I will hand it to our CFO James.
James Jin Cheng: Thank you, NG. And good day, everyone. This is James, CFO of Canaan. I'm pleased to share our Q4 financial performance with you.
Speaker #2: is James CFO Canaan. I'm
Speaker #2: pleased to share our Q4 financial performance with you.
Speaker #2: To begin my part I would like to Thank you echo NG's perspective on the fourth quarter This concludes industry environment. It was a very volatile quarter for the Bitcoin price.
Nangeng Zhang: To begin my part, I would like to echo NG's perspective on the fourth quarter industry environment. It was a very volatile quarter for the Bitcoin price. Bitcoin reached a new high in October, hitting $126,000, before dropping below $100,000 in November and below $90,000 in December. During the quarter, network hash rate also reached historical highs, significantly impacting the profitability of miners. Fortunately, our operation was robust in Q4. We successfully secured large-scale orders from key clients in the North American market and globally, and our strong supply chain relationships ensured timely production and delivery. In our mining operation, we continued our deployment and seized opportunities for new pilot agreements. Overall, we delivered solid quarterly results in Q4 despite the market dynamics. Let's take a close look at the details. First, I will highlight our strong top-line results in the fourth quarter and for the full year of 2025.
James Jin Cheng: To begin my part, I would like to echo NG's perspective on the fourth quarter industry environment. It was a very volatile quarter for the Bitcoin price. Bitcoin reached a new high in October, hitting $126,000, before dropping below $100,000 in November and below $90,000 in December. During the quarter, network hash rate also reached historical highs, significantly impacting the profitability of miners. Fortunately, our operation was robust in Q4. We successfully secured large-scale orders from key clients in the North American market and globally, and our strong supply chain relationships ensured timely production and delivery. In our mining operation, we continued our deployment and seized opportunities for new pilot agreements. Overall, we delivered solid quarterly results in Q4 despite the market dynamics. Let's take a close look at the details. First, I will highlight our strong top-line results in the fourth quarter and for the full year of 2025.
Speaker #2: Bitcoin reached a new high in October, hitting $126,000, before dropping below $100,000 in November and below $90,000 in December. During the quarter, network cash rate also reached historical highs, significantly impacting the profitability of miners.
Speaker #2: Fortunately, our operation was robust in Q4. We successfully secured large-scale orders from key supply chain relationships, ensuring timely production and delivery. In our mining operation, we continued our opportunities for new pilot agreements.
Speaker #2: Overall we delivered a solid quarterly results in Q4 deployment and seized despite the market dynamics. First I will highlight our at the details. Let's take a close look strong top-line results in the fourth of 2025.
Speaker #2: quarter and for the full year In Q4 we delivered $196 million in total revenue. Up 30.4% sequentially and $121.1% year over year. sold also reached a Our total computing power per second.
Nangeng Zhang: In Q4, we delivered $196 million in total revenue, up 30.4% sequentially and 121.1% year-over-year. Our total computing power sold also reached a record 14.6 exahash per second. This growth was primarily driven by the massive delivery of our A15 series. Our revenue increased consistently throughout every quarter in 2025. This trajectory peaked at a new quarterly high for Q4. Consequently, our full-year revenue reached $530 million, nearly doubling 2024 results. Within product revenue, our Avalon Home series also delivered exceptional growth in 2025, contributing approximately $25 million in revenue. Notably, our Q4 revenue mainly came from the North American market. Revenue from North American customers reached $125 million, accounting for over 75% of our total product sales. This demonstrates that top-tier institutional miners in North America continue to recognize Canaan as a primary long-term partner.
James Jin Cheng: In Q4, we delivered $196 million in total revenue, up 30.4% sequentially and 121.1% year-over-year. Our total computing power sold also reached a record 14.6 exahash per second. This growth was primarily driven by the massive delivery of our A15 series. Our revenue increased consistently throughout every quarter in 2025. This trajectory peaked at a new quarterly high for Q4. Consequently, our full-year revenue reached $530 million, nearly doubling 2024 results. Within product revenue, our Avalon Home series also delivered exceptional growth in 2025, contributing approximately $25 million in revenue. Notably, our Q4 revenue mainly came from the North American market. Revenue from North American customers reached $125 million, accounting for over 75% of our total product sales. This demonstrates that top-tier institutional miners in North America continue to recognize Canaan as a primary long-term partner.
Speaker #2: This growth was primarily driven by the massive delivery of our A15 series. Our revenue 2025. This trajectory peaked at a new quarterly increased consistently throughout every Consequently our full high for Q4.
Speaker #2: year revenue reached $530 million product revenue our Avalon Home series also delivered nearly doubling exceptional growth in 2024 results. 2025 contributing Within approximately $25 million in revenue.
Speaker #2: Notably, our Q4 revenue from the American market reached $125 million, accounting for over 75% of our total product. Revenue mainly came from North American top-tier institutional miners. Institutional miners in North America recognize Canaan as a primary long-term partner and continue to partner with us.
Speaker #2: Regarding sales, our mining operations, and the need to scale our infrastructure while maintaining a robust asset base. By the end of Q4, our installed base reached 10 exahash per second, up from Q3.
Nangeng Zhang: Regarding our mining operations and the Treasury strategy, we continued to scale our infrastructure while maintaining a robust asset base. By the end of Q4, our installed computing power reached nearly 10 exahash per second, up 7% from Q3. Our Digital Asset Treasury also remains a core pillar of our financial strategy. As of 31 December 2025, we held 1,750 Bitcoins and 3,951 Ethereums. At year-end prices, these holdings were valued at approximately $166 million. While we manage through market fluctuations, this robust reserve provides a solid foundation for our balance sheet and long-term liquidity. Mining revenue in the full year of 2025 was $113.2 million compared to $44 million in the full year of 2024. The increase was mainly due to the increased computing power energized for mining, especially the expansion in the United States.
James Jin Cheng: Regarding our mining operations and the Treasury strategy, we continued to scale our infrastructure while maintaining a robust asset base. By the end of Q4, our installed computing power reached nearly 10 exahash per second, up 7% from Q3. Our Digital Asset Treasury also remains a core pillar of our financial strategy. As of 31 December 2025, we held 1,750 Bitcoins and 3,951 Ethereums. At year-end prices, these holdings were valued at approximately $166 million. While we manage through market fluctuations, this robust reserve provides a solid foundation for our balance sheet and long-term liquidity. Mining revenue in the full year of 2025 was $113.2 million compared to $44 million in the full year of 2024. The increase was mainly due to the increased computing power energized for mining, especially the expansion in the United States.
Speaker #2: Our digital asset treasury also remains up 7% from strategy. As of December 31st, 2025, we held 1,750 Bitcoins, and our computing power reached nearly 3,951 Ethereums.
Speaker #2: At the year-end prices these holdings will value at approximately $166 million. While we manage through this robust reserve our balance sheet and long-term liquidity.
Speaker #2: 2025 was market fluctuations million compared to $44 million in the full year of increase was mainly due to the increased computing power energized for mining especially provides a solid foundation for the expansion in the United States.
Speaker #2: On the operational front, we achieved notable gains in efficiency and supported our liquidity through disciplined capital management. Despite our business scaling up in 2024, the operating expenses in Q4 decreased 6% quarter over quarter. This improvement reflects our efforts to streamline our organization and focus on core strategic projects.
Nangeng Zhang: On the operational front, we achieved notable gains in efficiency and supported our liquidity through disciplined capital management. Despite our business scaling up, our operating expenses in Q4 were $38 million, decreasing 6% quarter-over-quarter. This improvement reflects our efforts to streamline our organization and focus on core strategic projects. Our strong sales and financing activities have also strengthened our cash position. In Q4, we generated approximately $75 million in cash inflow from sales and received approximately $80 million from strategic straight equity financing and the brief utilization of our renewed ATM. This healthy liquidity funded our Q4 payments of $100 million to secure our wafer supply and $89 million for production and operations. These investments ensure our growth-flexible manufacturing footprint across Malaysia, the United States, and Mainland China. Consequently, we ended the quarter with a cash balance of $81 million.
James Jin Cheng: On the operational front, we achieved notable gains in efficiency and supported our liquidity through disciplined capital management. Despite our business scaling up, our operating expenses in Q4 were $38 million, decreasing 6% quarter-over-quarter. This improvement reflects our efforts to streamline our organization and focus on core strategic projects. Our strong sales and financing activities have also strengthened our cash position. In Q4, we generated approximately $75 million in cash inflow from sales and received approximately $80 million from strategic straight equity financing and the brief utilization of our renewed ATM. This healthy liquidity funded our Q4 payments of $100 million to secure our wafer supply and $89 million for production and operations. These investments ensure our growth-flexible manufacturing footprint across Malaysia, the United States, and Mainland China. Consequently, we ended the quarter with a cash balance of $81 million.
Speaker #2: Our strong sales and financing activities have also strengthened our cash position. In Q4, $75 million in cash was generated approximately as inflow from sales, and we received approximately $80 million from strategic straight equity financing and the brief utilization of our renewed ATM.
Speaker #2: This healthy liquidity funded our Q4 payments of $100 million to secure our wafer for production and supply, and $89 million for operations. These investments ensure our goal in the United States and mainland China.
Speaker #2: Consequently we ended the quarter with a cash balance million this aligns with our of $81 flexible manufacturing commitment to strict cash flow discipline. Allowing us to footprint across Malaysia the navigate market cycles without compromising our strategic roadmap.
Nangeng Zhang: This aligns with our commitment to strict cash flow discipline, allowing us to navigate market cycles without compromising our strategic roadmap. Reflecting our strong confidence in the company's financial position and long-term shareholder value, we have already repurchased approximately 2.8 million ADSs for $2 million under our $30 million stock repurchase program announced in December. We intend to continue executing this plan optimistically as market conditions allow, underscoring our firm belief in the company's prospects. Turning to our margins, we have taken a proactive approach to address market pressures and de-risk our balance sheet. In Q4, our gross margin was $14.6 million compared to $16.6 million in Q3. This compression was primarily due to three factors. First, we delivered several large-scale institutional orders. These orders are strategically essential for securing our long-term market share in North America. Second, Bitcoin price softened in the latter half of the quarter.
James Jin Cheng: This aligns with our commitment to strict cash flow discipline, allowing us to navigate market cycles without compromising our strategic roadmap. Reflecting our strong confidence in the company's financial position and long-term shareholder value, we have already repurchased approximately 2.8 million ADSs for $2 million under our $30 million stock repurchase program announced in December. We intend to continue executing this plan optimistically as market conditions allow, underscoring our firm belief in the company's prospects. Turning to our margins, we have taken a proactive approach to address market pressures and de-risk our balance sheet. In Q4, our gross margin was $14.6 million compared to $16.6 million in Q3. This compression was primarily due to three factors. First, we delivered several large-scale institutional orders. These orders are strategically essential for securing our long-term market share in North America. Second, Bitcoin price softened in the latter half of the quarter.
Speaker #2: Reflecting our strong position and long-term shareholder value we have already repurchased confidence in the company's financial approximately $2.8 million ADSs for $2 million stock repurchase program announced in December.
Speaker #2: We intend to continue executing this planned allow, underscoring the company's prospects. Turning to our firm belief in the opportunistically, as market conditions and margins, we have taken a proactive approach to address market pressures and de-risk our balance sheet.
Speaker #2: In Q4 our gross margin was to $14.6 million compared $16.6 million in Q3 this compression was primarily due to three factors. First we delivered several large-scale institutional orders these orders are strategically essential for in North America.
Speaker #2: securing our long-term market share Second Bitcoin price softened in the latter half of the quarter this trend weakened market demand. This headwind lowered our average selling price.
Nangeng Zhang: This trend weakened market demand. These headwinds lowered our average selling price. Last but not least, we prioritized the delivery of industrial machines to strategic customers instead of the Avalon Home Series in Q4. Additionally, considering the severe Bitcoin price volatility in early 2026, we recorded inventory write-downs of $13.9 million in Q4. These impairments are based on management's latest estimates and reflect our cautious expectations under current conditions. Below gross profit, the year-end dip in Bitcoin prices resulted in a $44 million non-cash fair value loss. Another $15 million non-cash fair value loss was recorded for the conversion of the final batches of preferred shares. There will not be any fair value loss regarding preferred shares conversions for the next quarter. These non-cash items led to an adjusted EBITDA loss of $40.5 million.
James Jin Cheng: This trend weakened market demand. These headwinds lowered our average selling price. Last but not least, we prioritized the delivery of industrial machines to strategic customers instead of the Avalon Home Series in Q4. Additionally, considering the severe Bitcoin price volatility in early 2026, we recorded inventory write-downs of $13.9 million in Q4. These impairments are based on management's latest estimates and reflect our cautious expectations under current conditions. Below gross profit, the year-end dip in Bitcoin prices resulted in a $44 million non-cash fair value loss. Another $15 million non-cash fair value loss was recorded for the conversion of the final batches of preferred shares. There will not be any fair value loss regarding preferred shares conversions for the next quarter. These non-cash items led to an adjusted EBITDA loss of $40.5 million.
Speaker #2: Last but not least, we prioritized the delivery of industrial machines in Q4. Additionally, considering the two strategic customers, instead of severe Bitcoin price volatility in early 2026, we recorded inventory write-downs of $13.9 million in Q4.
Speaker #2: This impairments are based on estimates and reflect our cautious of the Avalon Home series in expectations under current conditions. Below gross profit the year-end dip in Bitcoin prices resulted in a $44 million non-cash fair value loss.
Speaker #2: Another $15 million non-cash fair value loss was recorded for the conversion of the final batches of preferred shares. any fair value loss There will not be regarding preferred shares conversions for the next quarter.
Speaker #2: This non-cash items led to an adjusted EBITDA loss of $40.5 management's latest note that our cash position remains stable providing us with sufficient liquidity to fund ongoing expansion into the million it is important to consumer and small and medium-sized business contribute to a more balanced our operations and R&D and resilient margin plans.
Nangeng Zhang: It is important to note that our cash position remains stable, providing us with sufficient liquidity to fund our operations and R&D plans. Furthermore, our ongoing expansion into the consumer and small and medium-sized business segments is expected to contribute to a more balanced and resilient margin profile over the long term. Finally, I want to outline our cautious yet resilient outlook. We are monitoring the very volatile Bitcoin price in the first two months of 2026. On 5 February 2026, the Bitcoin price dropped to $60,000. Low Bitcoin price triggered machine shutdowns and operations closures for higher-cost miners. Profitability of existing miners is also under pressure recently, including our own mining operations. Given the headwinds and uncertainties, we are taking a very prudent approach to provide our Q1 guidance. We estimate our revenue will be in the range of $60 million to $70 million.
James Jin Cheng: It is important to note that our cash position remains stable, providing us with sufficient liquidity to fund our operations and R&D plans. Furthermore, our ongoing expansion into the consumer and small and medium-sized business segments is expected to contribute to a more balanced and resilient margin profile over the long term. Finally, I want to outline our cautious yet resilient outlook. We are monitoring the very volatile Bitcoin price in the first two months of 2026. On 5 February 2026, the Bitcoin price dropped to $60,000. Low Bitcoin price triggered machine shutdowns and operations closures for higher-cost miners. Profitability of existing miners is also under pressure recently, including our own mining operations. Given the headwinds and uncertainties, we are taking a very prudent approach to provide our Q1 guidance. We estimate our revenue will be in the range of $60 million to $70 million.
Speaker #2: term. Finally I want to outline our cautious yet resilient outlook. We segments is expected to months of 2026. On February 5th the Bitcoin price dropped to volatile Bitcoin price in the first two $60,000.
Speaker #2: Low Bitcoin price triggered a closures for higher cost miners. machine shutdowns and operations Furthermore our Profitability of existing miners is also under pressure recently including our own mining operations.
Speaker #2: Given the headwinds and uncertainties we are taking a very prudent approach to provide our Q1 guidance. We estimate our revenue will be in the range of $60 million to $70 million.
Speaker #2: In Q1, our priority is to maintain a healthy cash position and de-risk, allocating our capital carefully between power source investment and wafer supply for computing hash rate.
Nangeng Zhang: In Q1, our priority is to maintain a healthy cash position and de-risk our balance sheet. We will allocate our capital carefully between power source investment and wafer supply for computing hash rate, and we will prepare to capture the next market recovery. This concludes our preparatory remarks. Now we are 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. 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.
James Jin Cheng: In Q1, our priority is to maintain a healthy cash position and de-risk our balance sheet. We will allocate our capital carefully between power source investment and wafer supply for computing hash rate, and we will prepare to capture the next market recovery. This concludes our preparatory remarks. Now we are open for questions.
Speaker #2: our balance sheet.
Speaker #2: And we next market will prepare to capture the concludes our prepared recovery. remarks. Now we are open for This questions.
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.
Speaker #1: other investors and analysts who may
Speaker #1: wish to ask a question question and one begin the question and answer follow-up. If you have any additional We will session the investor relations team will questions after the Q&A call.
Speaker #1: For the benefit of all call if you wish to ask your question to session. As a courtesy to management in Chinese please immediately repeat your question in English.
Speaker #1: To ask a question you will need to press participants on today's star one one on your announced. To withdraw your question please press star one one telephone and wait for your name to be again.
Nangeng Zhang: To ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. We will take our first question. The first question comes from Ben Summers from BTIG. Please go ahead. Hey, good morning, and thanks for taking my question. So it was good to hear about the strong progress in the supply chain efficiency. Kind of curious how the A16 mass production is progressing and kind of any updates around the timeline there. I think you are asking about our new generation rigs, right? Yeah. Yeah. Yeah. Yeah. Yeah. Right now, we are sending the A16 simple machines to our customers, and I think they're doing the testing phase. We are moving ahead with mass production preparations right now.
Operator: To ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. We will take our first question. The first question comes from Ben Summers from BTIG. Please go ahead.
Speaker #1: We will take our first from Ben Summers from
Speaker #1: The first question comes
Ben Summers: Hey, good morning, and thanks for taking my question. So it was good to hear about the strong progress in the supply chain efficiency. Kind of curious how the A16 mass production is progressing and kind of any updates around the timeline there.
Speaker #2: Hey good morning and thanks
Speaker #2: for taking my question. So it's good to hear about the strong progress in the supply chain production is progressing and kind of any updates around the timeline efficiency kind of curious how the A16 mass question.
Speaker #2: there. I think
Nangeng Zhang: I think you are asking about our new generation rigs, right?
Speaker #3: you're asking about our new generation rigs right?
Ben Summers: Yeah. Yeah.
Speaker #2: Yeah yeah
Speaker #2: yeah.
Nangeng Zhang: Yeah. Yeah. Yeah. Right now, we are sending the A16 simple machines to our customers, and I think they're doing the testing phase. We are moving ahead with mass production preparations right now. And, I think the mass production will start after the Lunar New Year holiday. And we expect to begin volume ramp-up by the end of Q1. Currently, we don't have any issues or anything can block us. On the chip side, the chips are already in the mass production. And on the product side, our main focus now is refining the product at the system level. And also, you know, besides the air-cooled version, we will have the liquid-cooled and the immersion-cooled models. So now we are working on these different models, so we can better match different customer deployment needs and site conditions. I hope this answered your question. Thank you.
Speaker #3: Yeah, yeah. Right, we are sending that ahead.
Speaker #3: And I think they're doing the testing phase. We are moving ahead with mass production preparations right now, and I think the mass production will be start year holiday.
Nangeng Zhang: And, I think the mass production will start after the Lunar New Year holiday. And we expect to begin volume ramp-up by the end of Q1. Currently, we don't have any issues or anything can block us. On the chip side, the chips are already in the mass production. And on the product side, our main focus now is refining the product at the system level. And also, you know, besides the air-cooled version, we will have the liquid-cooled and the immersion-cooled models. So now we are working on these different models, so we can better match different customer deployment needs and site conditions. I hope this answered your question. Thank you. No, awesome. That was super helpful.
Speaker #3: After the Luna new begin volume ramp-up by the end of the first, and we expect to quarter. Currently, we don't have A16 simple machines to our any issues or anything can block the chip side. The chips are already in the mass production.
Speaker #3: and on refining the product and the system system level. And the product side our also you'll know beside main focus now is the air-cooled version we have to we will have the liquid cooled and the emerging cooled models.
Speaker #3: so now we can we are we are working this different models. working on different customer deployment needs and size so we can better match conditions.
Speaker #3: I hope this answered your question. Thank you.
Ben Summers: No, awesome. That was super helpful. Then just kind of I know you touched on it briefly, but just curious for a little bit more color on the difference in the margin profile between the Home series and the A15 and kind of how you think this can potentially, you know, help keep margins strong moving forward.
Speaker #2: No awesome. That was super helpful. Then just kind of curious for a little bit more color on the difference in in the margin profile between the home series and and the A15 and kind of how you think this can potentially you know I know you touched on it briefly but just help help keep margins strong moving forward.
Nangeng Zhang: Then just kind of I know you touched on it briefly, but just curious for a little bit more color on the difference in the margin profile between the Home series and the A15 and kind of how you think this can potentially, you know, help keep margins strong moving forward. I would take this question, Ben. I think currently we observe the market price has some influence from the Bitcoin price. So it seems like the industrial machines profitability seems to be under pressure. But it looks like the Home series continued without serious competition in the market, so we can still maintain the good profitability. But in Q4, on the delivery side, we prioritize the industrial orders because it's from the strategically important customers from North America.
Speaker #3: I would take this question, Ben. I think currently we observe the market price has some influence from the Bitcoin price, so it seems like the industry of machines' profitability seems pressured.
James Jin Cheng: I would take this question, Ben. I think currently we observe the market price has some influence from the Bitcoin price. So it seems like the industrial machines profitability seems to be under pressure. But it looks like the Home series continued without serious competition in the market, so we can still maintain the good profitability. But in Q4, on the delivery side, we prioritize the industrial orders because it's from the strategically important customers from North America.
Speaker #3: But it looks like the home to be under series continue the without series com competition in the market. So we can profitability. But in Q4 the it's from the strategically delivery side we prioritize the important customers from North industry orders because America.
Speaker #3: Looking forward, I think we will continue to see home still maintain the good in our category to generate profit. I don't know if I answered your questions, Ben.
Nangeng Zhang: Looking forward, I think, we will continue to see Home series play a more important role, in our category, to generate profit. I don't know if I answered your questions, Ben. No, that was super helpful, and I thank you guys for the update. Thank you, Ben. Thank you. Thank you. We will take our next question. The question comes from Nick Charles from B. Riley Securities. Please go ahead. Good morning. This is William Chan speaking on behalf of Nick. Thank you for taking my question and, congratulations on the quarter. It was good to see your, heat recovery proof concept announcement in Canada in early January. So, I wonder, can you speak to the size of the TEM for this opportunity, ideally in megawatt terms?
James Jin Cheng: Looking forward, I think, we will continue to see Home series play a more important role, in our category, to generate profit. I don't know if I answered your questions, Ben.
Speaker #3: series play a more important role
Ben Summers: No, that was super helpful, and I thank you guys for the update.
Speaker #2: No that was super
Speaker #2: helpful and thank you guys for the
James Jin Cheng: Thank you, Ben.
Speaker #3: Thank you
Speaker #4: you.
Nangeng Zhang: Thank you.
Operator: Thank you. We will take our next question. The question comes from Nick Charles from B. Riley Securities. Please go ahead.
Speaker #1: Thank you. We will Thank Giles from B Reilly Securities. Please go take our next
Speaker #1: Thank you. We will Thank Giles from B Reilly Securities. Please go take our next
[Analyst]: Good morning. This is William Chan speaking on behalf of Nick. Thank you for taking my question and, congratulations on the quarter. It was good to see your, heat recovery proof concept announcement in Canada in early January. So, I wonder, can you speak to the size of the TEM for this opportunity, ideally in megawatt terms? As a follow-up, how scalable is this specific solution, and what are some other ways that you can expand your energy efficiency initiatives going forward? Thank you.
Speaker #2: good morning.
Speaker #2: This quarter. it was good to see your heat ahead. recovery proof of concept announcement in Canada in early January. So I wonder can you speak to the size of the temp for this opportunity?
Speaker #2: thank you for taking my question
Speaker #2: ideally in megawatt terms. And as a question. update.
Nangeng Zhang: As a follow-up, how scalable is this specific solution, and what are some other ways that you can expand your energy efficiency initiatives going forward? Thank you. Hello. Good morning. I think I fully understand the market's interest in the new energy and the ESG-related computing products. I think the core value for these initiatives is transforming wasted and concentrated energy into measurable, treatable computing power, and even for the cash flow. Yeah. However, I'd like to be more candid. These opportunities are highly dependent on specific scenarios, such as resource availability, grid connection conditions, and even compliance pathways, and also the operational capacity. I think, you know, we have been working on this for more than 1 year. So the scale of each individual product typically ranges from a few MW to several tens of MW.
Speaker #2: Energy efficiency initiatives going forward? What are some ways that you can expand your
Nangeng Zhang: Hello. Good morning. I think I fully understand the market's interest in the new energy and the ESG-related computing products. I think the core value for these initiatives is transforming wasted and concentrated energy into measurable, treatable computing power, and even for the cash flow. Yeah. However, I'd like to be more candid. These opportunities are highly dependent on specific scenarios, such as resource availability, grid connection conditions, and even compliance pathways, and also the operational capacity. I think, you know, we have been working on this for more than 1 year. So the scale of each individual product typically ranges from a few MW to several tens of MW.
Speaker #4: hello. Good
Speaker #4: morning. we we I think you. interest in the new
Speaker #4: energy and the ESG-related computing products. I think the core value The question comes from Nick for this indicatives is transforming real estate and concentrated energy Nick.
Speaker #4: into measurable treatable computing power. and even for the cash transforming is flow. yeah but however I I'd like to be
Speaker #4: more candid. this opportunities are highly dependent on specific scenarios. such as connection conditions. and even compliance possibilities. and also the operational capacity. I think the a+availability.
Speaker #4: So the scale of each individual result is from a few to more than one year. Grid products typically cover regions.
Nangeng Zhang: The true total addressable market largely comes from the number of these points. But we want to cautious against the overly optimistic calculations like, "Okay, we have few megawatts for each side, and there's thousands of points there, and so there's multi-gigawatts business." We are against that. It's too optimistic, because the business model is still relatively fragmented, and the pace of progress must be steady. So over the past year, we was started systematically screening potential sites for several POC products. And we already have implemented some of them, collecting initial operational data, not only the Canada one. There are many others. Yeah. But moving forward, our focus will be on three key areas. First is the data and the methodology standardization. The second is productization and modularity. Yeah.
Nangeng Zhang: The true total addressable market largely comes from the number of these points. But we want to cautious against the overly optimistic calculations like, "Okay, we have few megawatts for each side, and there's thousands of points there, and so there's multi-gigawatts business." We are against that. It's too optimistic, because the business model is still relatively fragmented, and the pace of progress must be steady. So over the past year, we was started systematically screening potential sites for several POC products. And we already have implemented some of them, collecting initial operational data, not only the Canada one. There are many others. Yeah. But moving forward, our focus will be on three key areas. First is the data and the methodology standardization. The second is productization and modularity. Yeah.
Nangeng Zhang: We aim to turn the POCs into replaceable modular solutions. Third is replication and expansion. This is the third phase. Yeah. I think, when we reach the third phase, then we will continue to expand similar products faster. I hope I answered your question. Thank you. Yep. That's very helpful. Thank you, and continue. Best of luck. Thank you. We will take our next question. Your next question comes from the line of Mark Palmer from The Benchmark Company. Please go ahead. Yes. Good morning. As you think about Canaan's manufacturing footprint from a long-term standpoint, what would that look like, and where would the company's US manufacturing, you know, to adjust for the tariff environment, fit into that? Yeah. I think over the last year, the external environment has been very dynamic. Tariffs move back and forth.
Nangeng Zhang: We aim to turn the POCs into replaceable modular solutions. Third is replication and expansion. This is the third phase. Yeah. I think, when we reach the third phase, then we will continue to expand similar products faster. I hope I answered your question. Thank you.
uh, yeah, uh, I think, uh, when we reached the surface, um,
Uh, then we will continue to
to continue to expand similar products faster.
[Analyst]: Yep. That's very helpful. Thank you, and continue. Best of luck.
Uh, I hope I answer your question. Thank you.
Operator: Thank you. We will take our next question. Your next question comes from the line of Mark Palmer from The Benchmark Company. Please go ahead.
Yep, that's very helpful. Thank you, and I'll continue. Best of luck.
Thank you. We will take our next question.
Mark Palmer: Yes. Good morning. As you think about Canaan's manufacturing footprint from a long-term standpoint, what would that look like, and where would the company's US manufacturing, you know, to adjust for the tariff environment, fit into that?
Your next question comes from the line of Mark Palmer from Benchmark songs.
Please go ahead.
Yes. Uh, good morning.
um,
As, uh, you think about uh kenan's manufacturing footprint, uh from a long-term standpoint. Um, what would that look like uh and where would uh, the company's us manufacturer
Nangeng Zhang: Yeah. I think over the last year, the external environment has been very dynamic. Tariffs move back and forth. Compliance requirements become tighter in many markets, and it's very volatile. The big Bitcoin, in this context, competition is not only about the price and the efficiency. It's also about the compliance, compatibility, discipline, and how fast you can adjust. So now the supply chain issue is combined with compliance. So, but we treat, you know, we treat compliance as a baseline. So we keep high standards across sales, delivery, and regional operations. With multiple policy changes last year, we did not take any meaningful surprise loss from policy swings.
Place, uh, you know, to, uh, adjust for, uh, the the Tariff environment, um, fit into that.
uh,
yeah, I I think um,
Nangeng Zhang: Compliance requirements become tighter in many markets, and it's very volatile. The big Bitcoin, in this context, competition is not only about the price and the efficiency. It's also about the compliance, compatibility, discipline, and how fast you can adjust. So now the supply chain issue is combined with compliance. So, but we treat, you know, we treat compliance as a baseline. So we keep high standards across sales, delivery, and regional operations. With multiple policy changes last year, we did not take any meaningful surprise loss from policy swings. This is not always the case in this industry. More particularly, some peers have a heavier fixed assets exposed in certain regions, and so when policy or the market tends quickly, their adjustment cost is higher. We have, you know, firstly, our self-money is 100% outside China.
Yeah, I think over the last year the external environment has, uh, been very dynamic. Uh, trust—uh—more back and forth. Um, compliance requirements have become tighter in many markets.
Uh, and it's very well on top, uh, the big, uh, Bitcoin, uh, in this Con, uh, context. Uh, competition is not only about the press and the efficiency.
uh, it's also about the compliance uh, commodity, uh,
Display and how fast you can adjust.
uh, so now the supply chain, uh, issue is uh, combined with uh, clients
So, uh, but we treat, uh, you know, we—we treat compliance as a baseline, uh, so we keep high standards, uh, across sales, delivery, and regional operations.
Nangeng Zhang: This is not always the case in this industry. More particularly, some peers have a heavier fixed assets exposed in certain regions, and so when policy or the market tends quickly, their adjustment cost is higher. We have, you know, firstly, our self-money is 100% outside China. Also, we build multiple region production and assembly setup across mainland China, South Asia, Malaysia, and even in California, North America. So this really gives us resilience and continuity as regions become less predictable. So, you know, I think for your question, North America is our most important market. And last year, we built thousands of machines from our US manufacturer facilities. So this year, we will carefully reveal the whole supply chain and make it safer for US customers and expand in our US made-in-USA products. Yeah. Thank you.
Uh, it's multiple policy changes last year. Uh, we did not take any meaningful, uh, surprise loss, uh, from policy swings. Uh, this is not always the, the case, uh, in this industry, uh, more particularly, uh, some peers have a heavier fixed assets exposed in certain regions, and so with policy or the market tends quickly, their adjust, uh, adjustments cost is higher.
uh, uh, uh, we do, we have, you know, uh,
Nangeng Zhang: Also, we build multiple region production and assembly setup across mainland China, South Asia, Malaysia, and even in California, North America. So this really gives us resilience and continuity as regions become less predictable. So, you know, I think for your question, North America is our most important market. And last year, we built thousands of machines from our US manufacturer facilities. So this year, we will carefully reveal the whole supply chain and make it safer for US customers and expand in our US made-in-USA products. Yeah. Thank you. That's helpful color. Thank you. Thank you. We will take our next question. Your question comes from Kevin Cassidy from Rosenblatt Securities. Please go ahead. Hi. Yeah. Thanks for taking my question.
Uh firstly uh our self money is uh 100% outside China. And also we build uh,
In China Association Malaysia, uh, and even in, uh, California, uh, North America, uh, so this really gives us, uh, resilience and, uh, continuity, continues to, uh, to become, uh, region, uh, region becomes less, uh, uh, predictable. Uh, so, uh, so
uh, so, you know, uh, I think for your, your question, uh,
uh,
North America is our, uh,
Most important market. Uh, and, uh, last year, we built thousands of machines from our US, uh, manufacturer facilities.
Uh, so, uh, this year, uh, we will carefully, uh, reveal the, uh, whole supply chain.
make it, uh,
Mark Palmer: That's helpful color. Thank you.
Safer, uh, for, uh, for us, uh, customers and, uh, expansion our, uh, US, uh, media USA, uh, uh, products. Yeah, thank you.
Operator: Thank you. We will take our next question. Your question comes from Kevin Cassidy from Rosenblatt Securities. Please go ahead.
That's helpful caller. Thank you.
Thank you. We will take our next question.
Kevin Cassidy: Hi. Yeah. Thanks for taking my question. I wonder, at what point price do you is the break-even for your customers for Bitcoin mining? I think it had been $90,000. Has that changed?
The question comes from Kevin custody from rosenblat Securities, please go ahead.
Nangeng Zhang: I wonder, at what point price do you is the break-even for your customers for Bitcoin mining? I think it had been $90,000. Has that changed? Thank you, Kevin. I think we have two lines for this, you know, break-even point. One, including depreciation of the machines. We say it's an all-in payback level. I think it's almost like 100,000 to 110,000 range for the Bitcoin price stay there. And you know, the hash price should be like $55 per TH per day, something between that. That's the all-in payback level. Another interesting metric to measure this is the marginal shutdown level because we only consider the energy cost, the variable cost, when we start the operation because the CapEx already a sunk cost already. So in this kind of scenario, it's quite a lower compared to the previous all-in payback level.
James Jin Cheng: Thank you, Kevin. I think we have two lines for this, you know, break-even point. One, including depreciation of the machines. We say it's an all-in payback level. I think it's almost like 100,000 to 110,000 range for the Bitcoin price stay there. And you know, the hash price should be like $55 per TH per day, something between that. That's the all-in payback level. Another interesting metric to measure this is the marginal shutdown level because we only consider the energy cost, the variable cost, when we start the operation because the CapEx already a sunk cost already. So in this kind of scenario, it's quite a lower compared to the previous all-in payback level.
Yeah, thanks for taking. I wonder at what price point this year is the break-even for your customers for Bitcoin mining. Um, I think there have been $90,000. Has that changed?
Nangeng Zhang: For different miners, of course, it's different. If we use our competitor's machine as a comparison, if the electricity cost is like $0.06, and we use our competitor's S21 Plus, and we see the shutdown price is like $50,000, and if it's S19 XP, it's $66,000. And then look back to ourself, our mining operation. Our average cost is like $0.043, globally. So our shutdown price for A15 Pro version is like $37,000. When Bitcoin price hit like $37,000, so we have to shut down the machine. But of course, in our mining sites, we do have some older generation machines. So it varies from, you know, like $40,000 to 50,000 to 60,000 in certain cases. So I think that's the part.
Uh, thank you Kevin. Uh, I think uh, we have 2 lines for this uh, you know, Break Even Point 1 uh including depreciation of the machines, we say it's all in payback level. Uh, I think it's almost like a hundred thousand to 110, uh, thousand range for for bitcoin price stay there. And, uh, you know, the hash price should be like, 55 per per per pH per day, uh, something between that that's the all in PEI, payback level another interesting metric, uh, to measure. This is the marginal shutdown level because uh, we only consider the energy cost the variable cost when we started the operation because the uh, capex already a sunk cost already. So, um, in this kind of scenario, uh, it's quite a lower compared to the uh, previous or or
James Jin Cheng: For different miners, of course, it's different. If we use our competitor's machine as a comparison, if the electricity cost is like $0.06, and we use our competitor's S21 Plus, and we see the shutdown price is like $50,000, and if it's S19 XP, it's $66,000. And then look back to ourself, our mining operation. Our average cost is like $0.043, globally. So our shutdown price for A15 Pro version is like $37,000. When Bitcoin price hit like $37,000, so we have to shut down the machine. But of course, in our mining sites, we do have some older generation machines. So it varies from, you know, like $40,000 to 50,000 to 60,000 in certain cases. So I think that's the part.
You pay back level, uh, for various for different. Uh, miners, of course, it's different. Uh, if we use our competitor's machine, as a, as a comparison, if the, if the electricity cost is like, 6 cents, uh, and, uh, we use our competitors as 21 plus. And we see the shutdown price is like a 50,000, uh, and if it's s19 XP is 66,000.
Nangeng Zhang: If we change that to the A16 series, it's a 12.8 joules power efficiency, and the shutdown price is about $30,000, you know, for Bitcoin price. So I think this calculation is based on the latest hash price. It always change, because of the network the total network hash rate changes and also the Bitcoin price changes. So I think in current stage, we have already observed in December, early January, and early February, some of the operations in the network has been shut down, and the total hash rate moves back to like 900 Exahash from previously 1,100 Exahash. So we do see a lot of needs in short term has not been released to the manufacturers. But in longer term, when the electricity has already been pre-prepared for mining, the they will come back for asking for better machines for the latest generation machines.
James Jin Cheng: If we change that to the A16 series, it's a 12.8 joules power efficiency, and the shutdown price is about $30,000, you know, for Bitcoin price. So I think this calculation is based on the latest hash price. It always change, because of the network the total network hash rate changes and also the Bitcoin price changes. So I think in current stage, we have already observed in December, early January, and early February, some of the operations in the network has been shut down, and the total hash rate moves back to like 900 Exahash from previously 1,100 Exahash. So we do see a lot of needs in short term has not been released to the manufacturers. But in longer term, when the electricity has already been pre-prepared for mining, the they will come back for asking for better machines for the latest generation machines.
And then look look back to our sale for our, uh, mining operation. Our average cost is like uh 4.3 cents, uh, globally. So, our shutdown price for a 15 pro version is like a 37,000 uh, when it comes price hit like 37,000. So uh, we have to shut down the machine. But of course, in our mining sites, we do have some older generation machines. So it varies from, you know, like a 40,000 to 50,000 to 60,000 in certain cases. So, uh, I think that's that's the, that's the part. Um, if we change that to the a16 series, it's a 12.8 joules. Um, how efficiency and the, uh, shutdown price is about 30,000, um, you know, uh, for for bitcoin price. So, I think that this calculation is
Nangeng Zhang: That's something happened in the past cycles, no matter bear market or bull market. Kevin, I, I think this answers your question? That was a great answer. Thank you. Yeah. Very good. Thank you, Kevin. As you get more orders for the leading edge, then what is the foundry availability on the A16, and what's the cost difference for a wafer versus A15? Yeah. I'll do this one. You know, since last year, with our assessment of market cycles, we have maintained this priced inventory strategy with low stock levels. And we still secured critical foundry capacity and the supply chain resources in anticipation for a market recovery this year. Currently, global foundry capacity is indeed very, very tight, particularly for advanced nodes, which are seeing surging demand for AI-related sectors.
James Jin Cheng: That's something happened in the past cycles, no matter bear market or bull market. Kevin, I, I think this answers your question?
Matters, but I am longer term. Uh, when the electricity has already been pre prepared for mining. Um, but they will come back for asking for a better machines for the latest generation machines. That's something happened in the past Cycles, no matter, uh, bare Market or B market.
Kevin Cassidy: That was a great answer. Thank you. Yeah. Very good.
Kevin, I think this answers your question.
James Jin Cheng: Thank you, Kevin.
Kevin Cassidy: As you get more orders for the leading edge, then what is the foundry availability on the A16, and what's the cost difference for a wafer versus A15?
That was a great answer. Thank you. Yeah, very good. Um, thank you very much.
Nangeng Zhang: Yeah. I'll do this one. You know, since last year, with our assessment of market cycles, we have maintained this priced inventory strategy with low stock levels. And we still secured critical foundry capacity and the supply chain resources in anticipation for a market recovery this year. Currently, global foundry capacity is indeed very, very tight, particularly for advanced nodes, which are seeing surging demand for AI-related sectors.
As you get, um, more, uh, orders for the Leading Edge than, um, what, what is you The Foundry, availability on the a16 and what's the cost difference for a wafer versus 850?
Um, yeah, I'll give this one. Um, you know, uh, since, uh, last year, uh, this—the, on our, uh, assignment of, uh, market cycles. Uh, we have, uh, maintained, uh, uh, uh, this price-in strategy with, uh, low, uh, stock levels. Uh, and, uh,
Uh, we secured, uh, but we still secured, uh, critical Foundry capacity, uh, and the supply chain, uh, resources, uh, in the, uh, participation for a market recovery. Uh, this year, uh, currently uh, Global Foundry capacity is, uh,
Nangeng Zhang: But we secured our position earlier, so and maintain because we have long-term partnerships, we utilizing rolling forecasts, prepayments, and collaborative ramp-up mechanisms. So our access to wafers and the key components remains stronger than the industry average. What I can say is, yeah, industry average. So, and regarding the cost, we cannot disclose in specific product. The unit cost for A16 faces upwards pressure in wafers, packaging and sourcing system components, compared to A15. I think it's for sure. You know, even the metal is rising in price. So, our plan is to offset this cost through yield improvements, testing optimizations, and design more efficient systems. So, overall, what I can say is, we expect the unit cost increase for A16 to remain within a manageable range.
Indeed the value of our type, uh, particularly for advanced notes, uh, which are seeing surging demand for AI utility sectors.
Nangeng Zhang: But we secured our position earlier, so and maintain because we have long-term partnerships, we utilizing rolling forecasts, prepayments, and collaborative ramp-up mechanisms. So our access to wafers and the key components remains stronger than the industry average. What I can say is, yeah, industry average. So, and regarding the cost, we cannot disclose in specific product. The unit cost for A16 faces upwards pressure in wafers, packaging and sourcing system components, compared to A15. I think it's for sure. You know, even the metal is rising in price. So, our plan is to offset this cost through yield improvements, testing optimizations, and design more efficient systems. So, overall, what I can say is, we expect the unit cost increase for A16 to remain within a manageable range.
Um, but we, we, we secured our, uh, position, uh, earlier. So, and maintain, uh, because we have a long-term partner shifts, uh, we utilizing rolling, uh, forecasts, uh, prepayments and, uh, uh, collaborative ramp up, uh, mechanisms. So, our access to reference, and the key components remains, uh, stronger than the
Uh, industry average. Uh, what what I can say is, uh, yeah, industry average. So, uh, and regarding the the cost, uh,
We, we cannot, uh, disclosed in, uh, specific product, uh, the unit cost for 86, uh, uh, thesis, uh, upwards, uh, pressure, uh, in, uh, we for, uh, inverse, uh, packaging and, uh, 13, uh, system components, uh, compared to a 15. I think this is for sure. You know, the, the, the even, the metal is, uh, is is rising price.
So, uh, our plan is to start this, uh, cost, uh, through yield improvements, uh, testing optimizations, and, uh, design more efficient systems.
uh,
So, uh, overall, uh, what I can say is, uh, we expect the unit cost increase, uh, for A16 to remain within a manageable range.
Nangeng Zhang: Ultimately, we measure competitiveness by our customer's lifecycle economics, including power efficiency returns, stability, and delivery certainty. So, I think, if the market recoveries, our cost and our performance can give you an opportunity to have good ASP for at that time. Yeah. Thank you. Great. Okay. Thank you. Thank you. We will take our next question. Your next question comes from the line of Kevin Dede from H.C. Wainwright. Please go ahead. Hi, Angie. And James, thanks for having me on the call. A couple of things for you. One is just I know you spoke to strategic priorities, but I just like to understand the 1-gigawatt facility objective and what that pipeline looks like. So maybe you could add some color there, please. Yeah. Okay. Hello. Good morning. Yeah.
Nangeng Zhang: Ultimately, we measure competitiveness by our customer's lifecycle economics, including power efficiency returns, stability, and delivery certainty. So, I think, if the market recoveries, our cost and our performance can give you an opportunity to have good ASP for at that time. Yeah. Thank you.
Uh, ultimately, we, uh, measure, uh, competitiveness by our, uh, customers life cycle economics, uh, including power efficiency returns, uh, stability, and, uh, delivery, uh, certainty. Uh, so I, I think, uh, if the market recoveries, uh, our cost, uh, and our our performance,
uh, can give you, uh, opportunity to have, uh, uh, good, uh, ASP for for, uh,
Kevin Cassidy: Great. Okay. Thank you.
Uh, at that time. Yeah, thank you.
Operator: Thank you. We will take our next question. Your next question comes from the line of Kevin Dede from H.C. Wainwright. Please go ahead.
Great. Okay. Thank you.
Thank you. We will take our next question.
Kevin Dede: Hi, Angie. And James, thanks for having me on the call. A couple of things for you. One is just I know you spoke to strategic priorities, but I just like to understand the 1-gigawatt facility objective and what that pipeline looks like. So maybe you could add some color there, please.
Your next question comes from the line of kevdi from HC Wayne Wright. Please go ahead.
Hi NG and James, thanks for having me on the call.
A, a couple of things for you. One is just—I know you spoke to strategic priorities, but I’d just like to understand the 1 gigawatt facility.
Uh, objective.
Nangeng Zhang: Yeah. Okay. Hello. Good morning. Yeah. We will share more details when time comes. But currently, we are quite confident in the gigawatt level power opportunities, which is based on our results from work at this stage. We already work on this for months, maybe close to one year, I think. Yeah. Second, yes. We believe our goal is to co-locate AI, HPC, and Bitcoin mining together. So we are targeting high-quality power resources. Yeah.
And what that pipeline looks like—maybe you could add some color there, please.
Nangeng Zhang: We will share more details when time comes. But currently, we are quite confident in the gigawatt level power opportunities, which is based on our results from work at this stage. We already work on this for months, maybe close to one year, I think. Yeah. Second, yes. We believe our goal is to co-locate AI, HPC, and Bitcoin mining together. So we are targeting high-quality power resources. Yeah. Okay. Thanks, Angie. James, you mentioned, I think, cash outlay of $100 million for wafers and $89 million in operating costs, I think, in Q4. Can you offer more detail on the wafers you secured? And of the 14 exahash sold, usually give us sort of an average price per terahash.
Uh, in the gigawatt level power opportunities.
Uh, which is based on our results.
Uh, from work at this stage. Uh, we already work, uh, on this, uh, for—for my, uh, for maybe.
Uh, close to 1 year, I think. Um yeah. Uh second uh,
Uh, yes. Uh, we we, we, we believe our goal is to, uh, to talk code, uh, call locate, uh, AI HPC and, uh, become mine together. So we are, uh, we are talking. We are talking is uh, high quality.
uh,
Kevin Dede: Okay. Thanks, Angie. James, you mentioned, I think, cash outlay of $100 million for wafers and $89 million in operating costs, I think, in Q4. Can you offer more detail on the wafers you secured? And of the 14 exahash sold, usually give us sort of an average price per terahash. And I was wondering if you could offer some color on that and whether or not that figure would include the home series.
Uh, Power resources.
Okay.
Thanks Andy J. James, you mentioned I think cash outlay of 100 million for wafers and 89 million in operating costs. I think in the fourth quarter.
Can you offer more detail on the, the Wafers you secured?
Nangeng Zhang: And I was wondering if you could offer some color on that and whether or not that figure would include the home series. Yeah. Thank you, Kevin. I think we start from the average selling price. I think Q4 average selling price is $11.3, slightly lower than Q3. But I have explained a little bit on the margin side just because our average selling price for the institutional miners in a big order usually is lower than the small orders for the retail miners. I think that's the case. And also, we prioritize the industrial miners in Q4 instead of the home series. Even the margin side, home series is better, but we have to make sure our strategic partner, the client, feels satisfied to get our delivery on time. So we tried our best in Q4 and, you know, still a few batch delayed to the early January.
And of the 14X, the hash sold. Usually, you give us sort of an average price per TH/s, and I was wondering if you could offer some color on that and—
James Jin Cheng: Yeah. Thank you, Kevin. I think we start from the average selling price. I think Q4 average selling price is $11.3, slightly lower than Q3. But I have explained a little bit on the margin side just because our average selling price for the institutional miners in a big order usually is lower than the small orders for the retail miners. I think that's the case. And also, we prioritize the industrial miners in Q4 instead of the home series. Even the margin side, home series is better, but we have to make sure our strategic partner, the client, feels satisfied to get our delivery on time. So we tried our best in Q4 and, you know, still a few batch delayed to the early January.
Uh, whether or not that figure would include the home series.
Yeah. Thank you Kevin. Uh, I think uh, we start from the uh average selling price. I think Q4 average selling price is 11.3 slightly lower than Q3 but
Nangeng Zhang: We completed most of the deliveries in Q4. I think that's very helpful to the client, but not helping our financials. It looks like the profitability part is not as good as we expected for Q4. But we streamlined the expenses as well, just like I mentioned. $38 million is the total expense for Q4, which is slightly lower than Q3 because we did some work in streamlining the organization. And I think the wafer supply side, the $100 million secured the most likely the wafer, you know, delivered to the customers. And also some of the inventories carried to Q1. It's ongoing. We still continue that trajectory in Q1, but with a smaller volume of payment to our wafer partner. I think that's some color I added to this question, Kevin. Thank you very much, James and Angie.
James Jin Cheng: We completed most of the deliveries in Q4. I think that's very helpful to the client, but not helping our financials. It looks like the profitability part is not as good as we expected for Q4. But we streamlined the expenses as well, just like I mentioned. $38 million is the total expense for Q4, which is slightly lower than Q3 because we did some work in streamlining the organization. And I think the wafer supply side, the $100 million secured the most likely the wafer, you know, delivered to the customers. And also some of the inventories carried to Q1. It's ongoing. We still continue that trajectory in Q1, but with a smaller volume of payment to our wafer partner. I think that's some color I added to this question, Kevin.
I have, uh, explained a little bit, um, on the margin side, just because, uh, our average selling price for the institutional, uh, miners in, uh, in a big order usually is lower than the small orders, uh, uh, for the retail, um, miners. I think that's the case. And also, uh, we prioritized the industry miners in Q4 instead of the home series, even though on the margin side the home series is better. Um, but we have to, uh, make sure our strategical partners, uh, the clients, feel satisfied to get our delivery on time. So we tried our best in Q4 and, uh, you know, still a few batches delayed to early January. Um, but, uh, but we completed most of the deliveries in Q4. I think that's, um, very helpful to the client.
Um, but not helping our financials. Uh, it looks like the profitability part is not a, um,
Is not as good as we expected for Q4, but we streamlined the expenses as well. Um just like I mentioned 38 million is the total expense for Q4 which is uh uh slightly lower than Q3 because we did some work uh in streamlining the organization. Um
And I think the wafer supply side uh the 100 million secured the most likely the wafer, uh, you know, delivered to the customers and also some of the inventories carried uh to q1 its ongoing. Uh we still uh continue that that trajectory in q1. Uh but with a a smaller volume of payment to our wafer partner.
Kevin Dede: Thank you very much, James and Angie. I appreciate being on the call.
Uh, I I I I think that's something some color I added to this. Uh, question. Kevin
Nangeng Zhang: I appreciate being on the call. Thank you, Kevin. Thank you. Thank you. Once again, if you wish to ask a question, please press star 1, 1 on your telephone. We will take the next question. The question comes from Kevin Dede from H.C. Wainwright. Please go ahead. Hi again, gentlemen. I've, I figured I'd hop on again given the opportunity to do that. And, NG, can you talk a little bit about your product development? Understand the 12 joules per terahash target for the A16, but you also mentioned chip development that could push you down to maybe 5 or 6 joules per terahash. Can, can you talk about that and whether or not you see a product cycle shortening and when you might think that latest generation chip might be in the market? Yeah. I think it's a very open question. Yeah.
thank you very much, James and Ng
James Jin Cheng: Thank you, Kevin.
I appreciate being on the call.
Nangeng Zhang: Thank you.
Operator: Thank you. Once again, if you wish to ask a question, please press star 1, 1 on your telephone. We will take the next question. The question comes from Kevin Dede from H.C. Wainwright. Please go ahead.
Thank you, Kevin. Thank you.
Thank you. Once again, if you wish to ask a question, please press star 1 1 on your telephone.
We will take the next question.
Kevin Dede: Hi again, gentlemen. I've, I figured I'd hop on again given the opportunity to do that. And, NG, can you talk a little bit about your product development? Understand the 12 joules per terahash target for the A16, but you also mentioned chip development that could push you down to maybe 5 or 6 joules per terahash. Can, can you talk about that and whether or not you see a product cycle shortening and when you might think that latest generation chip might be in the market?
The question comes from Kev DD from HC Wayne light. Please go ahead.
Hi again, gentlemen. I I figured I'd Hop On Again given the opportunity to do that.
And Andy, can you talk a little bit about your product development, understand the 12?
Uh, tools per care hash target for the A16, but you also mentioned chip development. That could push you down to maybe 5 or 6 joules per terahash. Can you talk about that?
Nangeng Zhang: Yeah. I think it's a very open question. Yeah. Let me think about it. I think for, you know, for the A16 series, currently, we achieved 12.8 J/TH for the A16 XP, with manageable cost rise. So our target is to, when the market recovers, you know, currently because the deep dive for the Bitcoin price, so the whole market is some kind of freezing for a few weeks maybe. And after the market recovery, we can, when the competition comes back, we can have very competitive cost and performance to our competitors and give benefits to our customers. And for the next generation, yes. We already moved to the next generation development for the chips. But you know, because yeah, we you know because it's already at the subnano process node, I think the benefits from the process itself is very tightened now.
And whether or not you see a product cycle shortening. And when you might think that latest generation chip might be in the market,
uh,
yeah, I think so.
It's an open—uh, an open, open... open question. Yeah. Um,
Nangeng Zhang: Let me think about it. I think for, you know, for the A16 series, currently, we achieved 12.8 J/TH for the A16 XP, with manageable cost rise. So our target is to, when the market recovers, you know, currently because the deep dive for the Bitcoin price, so the whole market is some kind of freezing for a few weeks maybe. And after the market recovery, we can, when the competition comes back, we can have very competitive cost and performance to our competitors and give benefits to our customers. And for the next generation, yes. We already moved to the next generation development for the chips. But you know, because yeah, we you know because it's already at the subnano process node, I think the benefits from the process itself is very tightened now.
I think about it. Uh, I think for uh, uh, you know, for the A6 CS uh
Um, currently we we achieved, uh, 1218 drawers for the a6x p, uh, with, uh, manageable. Uh,
Cost. Uh, uh, right. Uh, so our targets uh, is to
uh,
when the market recovery recover, you know, uh, currently because the Deep dive for the Bitcoin price. So, the whole Market is, uh, some kind of freezing, uh, for, uh, a few weeks maybe. Uh, and after the market recovery, uh, we, we can, uh, the competition, uh, comes back. Uh, we can have, uh, uh, very competitive cost, uh, and performance to our competitors.
And, uh, uh, give our benefit give benefits to our, uh, customers and, uh, for the Next Generation. Yes, uh, we were already, uh, moved to the, uh, Next Generation development, uh, for the, uh, for the chips.
Uh,
but, you know, uh,
because, uh,
yeah, we uh
Nangeng Zhang: And also the cost for the manufacture of the chips is rising a lot. We are trying different methods to further improve the energy efficiency. But it looks like, after I mean, after the, like, the 12 nm stage, when we come to the sub-10 nm product, it's very, very hard to say that the manufacture cost is still manageable if we are using today's standard. We already observed that our competitors' products is they have to price very high because we know roughly the cost for the system. You cannot sell at loss forever, right?
Nangeng Zhang: And also the cost for the manufacture of the chips is rising a lot. We are trying different methods to further improve the energy efficiency. But it looks like, after I mean, after the, like, the 12 nm stage, when we come to the sub-10 nm product, it's very, very hard to say that the manufacture cost is still manageable if we are using today's standard. We already observed that our competitors' products is they have to price very high because we know roughly the cost for the system. You cannot sell at loss forever, right?
You know, because, uh, it already at, uh, uh, 7-nanometer, uh, process node. Uh, I think the benefits from the pro—uh, process itself, uh, is, uh, is very tight. And now, and also the, uh,
Cost for the manufacturer of the chips. Uh, it's writing a lot.
uh we are uh we are trying different, uh,
Methods to, uh, further improve the, the, uh, energy efficiency. Uh, but it, it looks like, uh, after—I mean, after the, like, the 12, uh,
Stage, when we comes to the sub 10, uh, to us, uh, products.
Uh, it's—it's very, very hard to say that the, the, uh,
Manufacturer cost is, uh, is still uh, manageable if uh, we are uh, using today's standard uh, we already uh observed that the our competitors uh products.
uh, if they have to, uh,
Price, uh, price. Very high because, uh, we know, uh, we we know the roughly, uh, cost for the, uh, for the system.
Nangeng Zhang: So, currently, we, you know, in the many different internal meetings, we are continuing the discussion: oh, if our target is the best power efficiency, then we maybe pay for, like, twice or triple the cost. How can we avoid this kind of situation, because the most important part is to let the TCO for our customers. Yeah. So, also, we, you know, we also start the big-scale infrastructure in the US. So, I think in the operational side, we are not only the equipment provider. We also get involved the operations. Any pains our customer have previously, we'll react to ourselves. So we are thinking about this more and more carefully. Yeah.
Nangeng Zhang: So, currently, we, you know, in the many different internal meetings, we are continuing the discussion: oh, if our target is the best power efficiency, then we maybe pay for, like, twice or triple the cost. How can we avoid this kind of situation, because the most important part is to let the TCO for our customers. Yeah. So, also, we, you know, we also start the big-scale infrastructure in the US. So, I think in the operational side, we are not only the equipment provider. We also get involved the operations. Any pains our customer have previously, we'll react to ourselves. So we are thinking about this more and more carefully. Yeah.
Uh, you cannot sell, uh, at a loss forever, right? So, uh, currently we, uh, in, you know, in the many different, uh, uh, internal meetings, uh, we are, we are—what we are, uh, continue to discussion is, uh, oh, if we, our target is the—the best, uh, power efficiency? Uh, then, uh, we may be paid for like twice or, or triple.
The, the the cost.
Uh, how can we avoid this kind of situation? Uh, because, uh, the most important part is to, uh, let the TCO for the, uh, for our customers.
Uh, yeah. So, uh, also, we, you know, we we also start the, uh, uh, big scale infrastructure. Uh,
In the US. So I think, uh, the in the operational side, uh, we are not only the, uh, equipment, uh, provider, uh, we also got involved, the operations, uh, any pens our customer have, uh, previously, they will, uh,
Nangeng Zhang: So, currently, I think, in conclusion, I think the development for the new system will not accelerate, but also it will not delayed. It will just goes at the very natural progress. We will, I think we will have new, we're sure we will have new products this year, and, yeah. And also, you know, we hope at that time, you know, the AI HPC will not relocate, we will not locate 100% of the semiconductor capacity, yeah. And, also, we don't have, like, the DRAM and HBM kind of memories, so sometimes we are at a very good position. Still, we can use the rapid, or, you know, some, sometimes there are peak capacities released from the foundries. We can use this kind of capacity to get one-time deals to fuel our inventory.
Nangeng Zhang: So, currently, I think, in conclusion, I think the development for the new system will not accelerate, but also it will not delayed. It will just goes at the very natural progress. We will, I think we will have new, we're sure we will have new products this year, and, yeah. And also, you know, we hope at that time, you know, the AI HPC will not relocate, we will not locate 100% of the semiconductor capacity, yeah. And, also, we don't have, like, the DRAM and HBM kind of memories, so sometimes we are at a very good position. Still, we can use the rapid, or, you know, some, sometimes there are peak capacities released from the foundries. We can use this kind of capacity to get one-time deals to fuel our inventory.
Will will react to our ourself. Uh, so we will we are thinking about this more and more carefully.
Inclusion. I think the, uh,
Uh, the development for the new uh system uh will not accelerate but also it will not uh delayed.
Uh, it will just go, uh, at the very natural, uh, pro process, progress. Uh, we will—I think we will have a new—sure, we will have new products this year, uh, and, uh,
Uh, yeah. And those also, um,
you know the, uh,
We, we hope at that time, uh, you know, the AI HPC will not, uh, relocate. Uh, we will not locate 100% of the, the the, uh, semiconductor capacity. Uh, yeah. And, uh, also, uh, we don't have like, uh, the DM and hbm, uh, kind of, uh, memories. Uh, so sometimes we are at a very, uh, good position. Uh, still, we can, uh, use the, uh, rapid, uh, or, you know, some sometimes there are the, uh, Peak capacities released from the foundries. Uh, we can use, uh, this kind of capacity to
Nangeng Zhang: So this is good. We are waiting for this kind of opportunities. Yeah. So, basically, I think the industry is not coming to the end. It's still going at a normal speed. Yeah. This is my personal view. Yeah. Thank you. Okay. Okay, Angie. Yeah. Thank you for the detail there. Does Canaan have a self-mining target for 2026? Congratulations for reaching 10 exahash. I know that was a target in 2025. I was wondering if you thought about and are willing to communicate where you hope to be at the end of this year. Yeah. I think we, our priority is R&D and deliver to our customers first. And because the current, you know, the market situation, so we, personally, I move the priority to allocate energy resources, instead of just put more rigs on the shelf.
Nangeng Zhang: So this is good. We are waiting for this kind of opportunities. Yeah. So, basically, I think the industry is not coming to the end. It's still going at a normal speed. Yeah. This is my personal view. Yeah. Thank you.
Uh guys, at 1 time deals to uh, to a few, uh, our inventory. So this is good. Uh, we are waiting for this kind of opportunities.
Kevin Dede: Okay. Okay, Angie. Yeah. Thank you for the detail there. Does Canaan have a self-mining target for 2026? Congratulations for reaching 10 exahash. I know that was a target in 2025. I was wondering if you thought about and are willing to communicate where you hope to be at the end of this year.
Yeah. So uh basically uh I think the uh the industry is not coming to the end. It's uh, it's still, uh, going uh, at a at a normal normal speed. Uh uh yeah this is uh, my personal view. Yeah. Thank you.
Okay, okay. Angie, yeah. Thank you for the detail there. Does Canaan have...
A self mining Target for 2026. Congratulations for reaching 10x. The hash. I know that was a Target in 25. I was wondering if you thought about
James Jin Cheng: Yeah. I think we, our priority is R&D and deliver to our customers first. And because the current, you know, the market situation, so we, personally, I move the priority to allocate energy resources, instead of just put more rigs on the shelf. So, yeah. The infrastructure will give us the ability to scale it up when the right window opens. Yeah. So, currently, I think we don't have a fixed number for this year, but we have internal goals for electricity infrastructure. Yeah.
And are willing to communicate where you hope to be at the end of this year.
Uh,
um, yeah. Uh
Um, I I think we, we, our priority is, uh, R&D and, uh, uh, deliver to our customers first.
Nangeng Zhang: So, yeah. The infrastructure will give us the ability to scale it up when the right window opens. Yeah. So, currently, I think we don't have a fixed number for this year, but we have internal goals for electricity infrastructure. Yeah. So, yeah. And after that, if the window opens, we will rapidly ramp up the hash rate. I think controllable energy resources and the facilities will give us more opportunities to try different business models, and, you know, provide different kind of products to our customer. Yeah. I hope, you know, like the hash rate sales can come through to our mainstream in the maybe in the next year. Yeah. Thank you.
Uh, and uh, because the current, you know, the, the market situation. So, we, uh, personally, I moved the priority to, uh, allocate, uh, energy resources, uh, instead of, uh, just put more rigs on shelf.
So,
Um, yeah, the infrastructure. Uh,
We will give our, uh, ability to scale it up, uh, when the right window opens.
uh,
James Jin Cheng: So, yeah. And after that, if the window opens, we will rapidly ramp up the hash rate. I think controllable energy resources and the facilities will give us more opportunities to try different business models, and, you know, provide different kind of products to our customer. Yeah. I hope, you know, like the hash rate sales can come through to our mainstream in the maybe in the next year. Yeah.
Operator: Thank you. As there are no further questions now, I'd like to turn the call back over to the company for any closing remarks.
yeah, so, uh, currently, I think we, I don't have, uh, uh fixed number for, for, for this year. Uh, but we have internal goals for, uh, electricity infrastructure. Uh,
So, uh, yeah. And after that, uh,
We if, if we the, the window opens, uh, we will uh, rapidly uh ramp up the the hash rate.
Uh, I think, uh, controllable, uh.
Energy resources and the facilities. Uh, we will give us more opportunities to try different uh, business models.
Uh, and the, uh, do not provide, uh, different kind of, uh, products to our customer.
Uh,
yeah, I I hope, uh, you know, the like the, uh, the half rate, uh, sales can come through to how mainstream in the, uh, maybe the
Next year, yeah.
Nangeng Zhang: As there are no further questions now, I'd like to turn the call back over to the company for any closing remarks. Thank you for joining the call today. We look forward to speaking with everyone throughout the quarter. Thanks. Thank you. That concludes the call today. Thank you, everyone, for attending. You may now disconnect.
Gwyn Lauber: Thank you for joining the call today. We look forward to speaking with everyone throughout the quarter. Thanks.
Thank you, as there are no further questions. Now, I would like to turn the call back over to the company for any closing remarks.
Operator: Thank you. That concludes the call today. Thank you, everyone, for attending. You may now disconnect.
Thank you for joining the call today, and we look forward to speaking with everyone throughout the quarter.
Thanks.
Thank you. That concludes the call today. Thank you, everyone, for attending. You may now disconnect.
