Shares of Canaan Inc. (CAN) fell 19.11% on Tuesday after the bitcoin mining hardware maker posted a sharp decline in third-quarter revenue. The stock edged up 2.15% in the following session, leaving investors with a mixed set of results to weigh — a headline profit generated by non-cash gains rather than sales.

Revenue came in at $14.5 million, down 90% from $150.5 million a year earlier, though the figure landed within the company's own guidance range. The hardware business took the biggest hit, with mining equipment sales falling 96% to $4.8 million from $118.6 million — a collapse in the company's core product line that defined the quarter.

In a post on X, the company confirmed the release of its quarterly results:

$CAN third quarter 2026 results are out.

Full financials and management commentary on the quarter are here: pic.twitter.com/3WbAYc5nbI

— Canaan Inc. (@canaanio) November 10, 2026

The full earnings release is available via PR Newswire.

Canaan sold 1 million TH/s of computing power in the quarter, down from more than 10 EH/s of machines sold in the year-ago period. One million TH/s equals about 1 EH/s, meaning shipped hashrate fell by more than 90% year over year. The company attributed the drop to lower volumes and weaker selling prices, saying demand for mining equipment remained soft.

A Profit That Isn't From Mining

Despite the revenue slump, Canaan reported net income of $8 million, a swing from a $27.7 million loss a year earlier. The improvement came from non-cash items: a $20.1 million fair-value gain on crypto holdings and $31.9 million from financial derivatives — a combined $52 million, more than covering the quarter's operating loss. That accounting is how a quarter with a deepening operating deficit still printed positive net income, and it ties the bottom line to bitcoin's marked value rather than to machine sales.

Chief Financial Officer Jin “James” Cheng pointed to bitcoin's higher price at the end of September, noting that the non-cash gain is “distinct from underlying operating performance.”

The operating numbers told a tougher story. The operating loss widened to $42.9 million from $23.9 million a year ago. Management also said higher bitcoin prices have not brought in new equipment orders and that it does not expect a meaningful demand recovery — meaning the company itself sees no demand catalyst for its hardware line.

Rising wafer costs present another challenge, with demand from AI making next-generation machines harder to build at a fair price, adding cost pressure on top of the weak demand picture.

There were some brighter spots. Mining gross margin climbed to nearly 30% from about 20% in the second quarter. Operating expenses fell 15.5% from the prior quarter to $34.2 million, and inventory dropped to $119 million, its lowest level in five quarters — cost and inventory reductions arriving alongside the weaker sales line.

Canaan's own mining arm mined 133 BTC in the quarter, generating $9.5 million in revenue, down from $30.6 million a year ago — making self-mining, not hardware, the larger revenue source this quarter. The company held about 1,875 BTC at the end of September, of which 1,258 BTC was pledged for secured loans, leaving roughly two-thirds of the treasury encumbered. That same hoard produced the fair-value gain above, tying part of the quarter's reported profit directly to bitcoin's price.

Texas Power Plans and a Buyback

Earlier this year, Canaan bought Cipher Mining's 49% stake in three West Texas mining projects for about $40 million. Their combined installed hashrate stood at 4.87 EH/s at the end of September — an expansion of the self-mining base during the same stretch in which equipment sales contracted sharply.

The Electric Reliability Council of Texas (ERCOT) gave Canaan's proposed 1 GW Duval County project a conditional “Studied Load – Firm” label, with more studies and approvals still pending. A second 1 GW project in Zapata County remains in early development, so neither gigawatt-scale project is past the review stage yet, making the approvals pipeline a milestone to track. Canaan said AI is also competing for power sites, pushing electricity prices higher — the same AI demand that is driving up wafer costs, putting the company's power plans and its next-generation machines in competition with AI buyers for both electricity and chips.

Separately, the board approved a $100 million buyback authorization on Nov. 6, and Canaan announced a first $20 million under that program alongside its results, leaving up to $80 million of the authorization unused.

Between the ERCOT review pipeline, management's guidance of no meaningful equipment-demand recovery, and the remaining buyback capacity, the coming quarters offer several concrete checkpoints for a company whose largest revenue line this quarter was self-mining rather than hardware sales.