Wall Street Miner Canaan Raises $30 Million, Sees 121% Revenue Increase in Q3 2024

Canaan Inc. (NASDAQ: CAN), a provider of computing solutions, has made progress in several areas, including securing investments, expanding its product offerings, and growing its mining operations.

Canaan Secures $30 Million

The company recently entered into a securities purchase agreement, selling up to 30,000 Series A-1 Preferred Shares at $1,000 each to an institutional investor. This agreement will raise $30 million to support the development of digital mining sites and equipment in North America.

This follows a previous Series A financing, completed in September 2024, in which Canaan sold up to 125,000 Series A Convertible Preferred Shares.

CEO Nangeng Zhang highlighted the importance of these investments in supporting the company's growth and potential market opportunities, particularly in relation to Bitcoin. The agreement includes standard provisions, including indemnification clauses.

HIVE Orders 5,000 Miners

Canaan's product development has also progressed, with high demand for its Avalon A15-194T miners. The company entered a follow-on purchase agreement with HIVE Digital Technologies to deliver 5,000 Avalon A15 miners in the first quarter of 2025.

Canaan's A15 series has been noted for its power efficiency and plays a key role in the company's expansion efforts, especially in North America.

Zhang emphasized HIVE’s focus on environmental, social, and governance (ESG) initiatives, which aligns with Canaan’s strategic focus, particularly in meeting the rising demand for AI computing capacity.

Joint Venture Targets 10 EH/s

In addition to expanding its product offerings, Canaan is strengthening its North American mining presence. Its subsidiary, Beet Digital LLC, has signed a joint mining agreement with Luna Squares Texas LLC (LS Texas). The agreement aims to expand Canaan’s mining capacity to 10 exahash per second (EH/s) by mid-2025.

Under the agreement, revenue from Avalon A14 machines will be split 50/50, while revenue from Avalon A15 machines will be split 70/30 until Canaan recovers its capital costs.

This partnership will involve the deployment of 9,144 Avalon mining machines at LS Texas’ 30 MW site in Willow Wells, Texas, by the first quarter of 2025. Additionally, Canaan has replaced older mining units with 6,000 Avalon A14 series machines at Stronghold Digital Mining’s Panther Creek facility, enhancing its overall mining fleet.

Q3 Revenue Soars 121%

Canaan’s financial results for Q3 2024 reflect strong performance, with revenue of $73.6 million, a 121% increase compared to the same period last year. This exceeded the company’s guidance and was driven by the delivery of 7.3 million terahashes per second (Thash/s) in computing power, marking the highest sales volume in 11 quarters.

The company mined 147 Bitcoins during the quarter, generating $9 million in mining revenue. Despite lower Bitcoin prices, Canaan's efforts to optimize operations and strategically sell A14 and A15 miners contributed to its positive financial results.

The company also increased its Bitcoin holdings to a record 1,231 BTC, signaling confidence in the long-term value of cryptocurrency.

Market Upturn Production Plans

Looking ahead, Canaan is focused on ramping up production of the A15 series, which began small-scale deliveries in Q3. The company’s strong cash position, bolstered by its Series A financing and successful product deliveries, provides a foundation to capitalize on a potential market upturn.

Canaan remains on track to reach its target of 10 EH/s in North America by mid-2025, supported by expanding relationships with mining operators and continued product development.