Good morning, or early afternoon. Thanks for dialing into another virtual presentation slot we have here today. For those of you who participated in our in-person sessions earlier this week, we appreciate you joining us. And I'm super delighted to have Head of Capital Markets, Vice President of Capital Markets and Corporate Development from Canaan, Leo Wang, joining us. Leo, thank you so much for sharing some time today.
Thank you so much, John.
Of course. So Leo has a presentation here that he's going to get into on the company. As a reminder to our audience, we are going to reserve some Q&A time at the end. We'll do about five or 10 minutes or so. You can submit those questions virtually. You can email me too if you have my email and want to do it that way. But you should see a little link or drop down where you can submit those questions, and I will be able to get to them at the end. With those housekeeping items, Leo, I'll give it over to you to take it away.
Sounds great, John. It's a great pleasure to be with you guys today. So I represent a company called Canaan Inc. We launched an IPO in 2019. We were considered one of the first crypto-related companies that went public. Back then, it was a very different regulatory environment than today. Today, everything seems roses and people have a lot of love about crypto. But back then, we were just really getting our way out to get people to understand the system and also the ecosystem. So I have a little bit of introduction about myself. I had a legal background. I was born and raised in China. I had an education with Columbia Law School and passed the New York bar before I worked with law firms like White & Case and Proskauer Rose, transactions including finance and capital markets transactions.
And then I decided to move to a startup with the U.S. headquarters in Silicon Valley, but also operations in Asia. I worked for that company for four years, smart home surveillance devices. Then I moved to a real estate company to manage their management of their investment and capital markets practices across the globe in different markets, including NYSE and Hong Kong and China markets. I joined Canaan in 2021. I was actually the first employee in the United States, but now we have over 20, including marketing, some R&D, and also our overall IR practice here. I'm based in Silicon Valley. I have team members across different states here in the U.S., and we do investor relations, public relations, and some bit of the events and marketing under my umbrella. So without further ado, let me take you to our company. This is a safe harbor statement.
By attending to this meeting, you agree that there are not recognized non-GAAP measures, including adjusted margin, non-GAAP net income, non-GAAP diluted earnings per share, or ADS and cash flow. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. You are advised to find an additional disclosure on our website. You're welcome to go to our IR website and also please look up our most recent public filings, including 2024, 2025, of 2020 and of 2024. The company has a mission to create a better future through smarter efficiency. This is very, very important for us. Today, everybody is talking about AI, but we were founded in 2013 when Bitcoin was a very niche market.
Our founders' team has that vision that at one day it might be important for everybody to have an ability to mine Bitcoin and consolidate the network so that Bitcoin might somehow become an alternative asset class for people to invest in. And here we are. In 2019, our company went public. It was the first blockchain company to go public. It was on Nasdaq. The market was very receptive to our company. So it's been almost six years since, a little over six years actually since then. And we have developed 16 generations of ASICs. Let me say a little thing about ASICs.
So these are in the beginning welcomed by the society because they have massive efficiency and very high computing power, which means the Bitcoin has yet moved into an era where people no longer use either GPUs or CPUs because the ASICs just outpace them so much. And it is very important for us to work close with manufacturers. We provide designs, but the advanced known manufacturers help us tape out and manufacture ASIC chips, and we put them together into miners and also sell them to the market and keep some for self-mining. We have headquarters in Singapore. Our ticker is CAN, and we have almost 500 worldwide patents by the end of 2024. We also operate close to 1% of global hash rate because we think this is a great addition to our business.
Our products have been sold to 86 different countries through online and offline distribution channels. By December 31st, 2025, we held 1,750 BTC on our balance sheet. We are very, very uniquely located in this industry. We are vertically integrated. ASIC design and manufacturing was our bread and butter, but we also have a little bit of sale mining across different jurisdictions, and we keep a treasury of crypto with both Bitcoin and Ethereum. We think that the sales of Bitcoin mining and the sale mining are kind of self-complementary because it gives us a way to manage inventory, especially during a bear market where Bitcoin mining is providing consistent cash flow to us while selling Bitcoin mining machines might not yield as much gross margin as they could have in the bull markets. We have been generating revenue on Bitcoin from machine sales and also sale mining.
This is a very interesting industry where people sometimes pay you crypto, including USDT, USDC, Bitcoin, sometimes even Ethereum for Bitcoin mining machines. You know, recognize that a lot of our customers are miners, which means they have a huge amount of crypto on the balance sheet, and sometimes it's a little bit difficult or cumbersome for them to transfer these crypto holdings into fiat currencies and buy our machines, so sometimes they expect just to buy machines with crypto, and everything is under regulation. We have third-party financial regulatory services providers to help us process these transactions. We have a HODL Bitcoin policy, which means when we mine the Bitcoin, we use it to pay some of our self-mining expenses and then keep the rest on our balance sheet.
We actually delivered the first ASIC-powered Bitcoin miner, and we continue to be one of the top manufacturers for the past decade, and we have a lot of investment in chip architecture and R&D to move our machines to a more and more efficient because that's very competitive for our customers if they were to use our machines to mine Bitcoin on the network, so our revenue streams come from Bitcoin mining, ASIC machine sales, both industrial and consumer offerings. I'll show you guys what consumer offerings mean. We have sale mining expansion in different jurisdictions as I mentioned, and we also have a bit of Bitcoin treasury where we use Bitcoin as collateral, but also manage them to generate a little bit of yield through third parties. We are significantly rooted in the United States.
We have sales and partnerships here, service centers in different states, and we actually have a new manufacturing facility in California. Sometimes our customers prefer U.S. assembled machines, and we provide them that. And this is also a risk avoidance for us because tariff risks come and go. So with the manufacturing capacity in the U.S., it keeps us less exposed to these risks. Our past quarter was the best quarter in the current Bitcoin cycle. We had a revenue of $150 million, which beats our guidance of $125 million-$145 million. Our revenue growth was 104% year- over- year and 50% quarter- over- quarter. It was the highest revenue in the past 13 quarters. We kind of did that with a little bit of surprise because the third quarter wasn't essentially the best for Bitcoin mining.
We think when Bitcoin mining was pressed a little bit over the past two quarters, they will have their better times this year, especially with the new regulations coming into place. And also with all these events happening internationally, people would use Bitcoin and crypto as a whole to offset their exposure to the other asset classes, including fiat currencies. We also had a gross profit of $16.6 million, which is 79% quarter- over- quarter growth. Our operating loss narrowed to $23.9 million. We had a Bitcoin treasury of 1,610 Bitcoins as of October 30th. We delivered a little over 10 exahash in that quarter, which is an all-time high for this company. And the average selling price for our machine is $11.80 per terahash per second. Our revenue streams continue to diversify.
As you can see from the chart, in 2023, over 90% of revenue came from the sales of machines. In last quarter, only 70% were from the sales of machines, with about 20% from self-mining and about 8.1% from the sales of home mining equipment. Speaking of home mining equipment, these are green machines. We just sell them to individuals and small businesses where they can plug into the typical 110-volt power outlet at offices and homes. Our revenues and key trends in third quarter, as you can see, it was the best quarter for us in the past 13 quarters, and our computing power sold was over 10 exahash, with the highest average selling price as well. We also unveiled our next-gen Avalon A16 series, including A16 and A16 XP.
These are by far the most powerful machines we had offered and also very competitive in the market, a Tier 1 machine for sure. We had an industry-leading energy efficiency achieving as efficient as 12.8 joules per terahash efficiency. And as always, our machines are well known in the market as very compact and reliable. People have loved our machines, especially North American customers loved our machines for our machines' high tolerance for heat and ambient environmental factors like dust and humidity. And they just kept running without having been taken off the shelf or shut down due to disruption from the environmental factors. And people love them for very, very little maintenance need and very easy to repair when they have to. So that is a very big selling point for our sales teams against some of our competitors here in the U.S.
We do offer both air-cooled and hydro-cooled machines. We also have patents in one of the pioneers' immersion-cooled machines where you immerse the machine into liquid and let the liquid take away all this oil. The difference between hydro and immersion-cooled and air-cooled machines is that if you operate hydro or immersion-cooled machines, the temperature tends to be stable and the operation needs for labor is much less. Therefore, you would expect a little higher CapEx in the first deployment cycle. But then once that's deployed, theoretically, these machines could run without very limited people interruption. But then you tend to have an automated system in IT to manage these machines remotely.
But the quality of these machines becomes very important because if you shut them down, if they had a problem, a technical issue, it'll be a little difficult to take them off and take them to the manufacturer for repair as opposed to the air-cooled. People take them down and service them on site, and they're usually much less required in terms of repair needs from the manufacturers. We also have Avalon boxes, which range from 20 to 40 feet. And we had air-cooled air boxes, container solutions. We had hydro-cooled solutions and immersion-cooled solutions. So sometimes when a customer is not as sophisticated, they would prefer you to help them with both the mining infrastructure as well as the mining machines. And our team will step in and help them set up the whole system. This is a very interesting niche market here, which is called home mining solutions.
As you can see, they look like home mining solutions. They look like home furniture. We use them to recycle heat because in the industrial settings, the heat will always go to the environment. But here, you can use them for a little bit of home heating. You have portable miners. You have these space heater-looking Avalon Mini 3, and you have this largest Avalon Q, which looks like a tower, a computing tower. They've been selling great, and we have very high potential for this market. We are currently the only company in this market that is providing a meaningful amount of sales, and we tend to keep that way. And we had a lot of interactions with online KOLs and actual very realistic user cases shared on social media.
This has been a very interesting experience for us, and we think this is very important for the ecosystem because people get to mine Bitcoin a little bit and decentralize the mining experience and also consolidating the network. In the third quarter, we had our self-mining located in different spaces. We had a margin, a self-mining gross margin of 26.3%, which means we actually had a very interesting business model with third parties. We deployed machines with people who had experience and had power contracts, and they contribute the construction. We so long haven't invested into our own construction except for a very small site in Texas, about 5 megawatts. So for most of our operations, they are a joint venture-like. And we split the revenue, and we share the cost as well.
We think this is a great way for us to expand our self-mining footprint, but also give us an advantage in providing machines and work with third parties, which are an important part of the system. In December, we also announced the most recent monthly updates about our self-mining. We mined 86 Bitcoins. The month-end Bitcoin we owned is 1,750. We launched a gas-to-computing pilot in Alberta, Canada, which converts stranded natural gas into clean energy and used them to mine Bitcoin. We also had a new initiative in Canadian greenhouses, places where people use our machines to add a little bit of hot water into the greenhouse, which they use to grow vegetables, and when the hot water goes back to the water heater, the energy spent on the water heaters will be much less than traditional greenhouses.
This is also a great way for us to recycle the heat during Bitcoin mining and also enjoy lower market standard power prices. As you can see from these charts, our North American installed computing power has been increased over the past few quarters along with our global hash rate. Our quarterly Bitcoin production has been a little bit volatile because of Bitcoin prices. As we imagine, this is the Bitcoin mining market is becoming increasingly competitive because the hash rate has been increased, and we keep on and we try to keep our space and also working with third parties, including U.S. self-mining hosting partners. We had nine different mining projects, including four in the U.S. and two in Ethiopia. Ethiopia is our second largest mining space. They have a lot of hydropower, but the U.S. is actually where we focus on.
Going forward, we are not against doing a little bit of our own construction and power contracts going forward, especially when we see a convergence between self-mining and AI manufacturing data centers. As you can imagine, we have a strategic flywheel here, including design chips, building the machines, running them in the field, and managing capital with long-term discipline. Our hardware generates revenue from self-mining machines, and we accept payment in fiat currency and cryptocurrency. We keep machines in self-mining spaces and keep the relationship. Over bear and bull market cycles, we are able to use our hardware in both sales as well as self-mining. Our HODL policy ensures that our balance sheet of Bitcoin grows over time. We have been using Bitcoin as collateral for R&D and manufacturing with a very, very low interest.
We also expect our Bitcoin to appreciate, which they did in the past, much more than the interest expense we pay to third parties. We design or manufacture machines and sell mining or mining fleets through joint venture partnerships. Our rigs are utilized by ourselves to significantly reduce mining expenses and also provide support for third parties. So they love the relationship. We sell a portion of mined Bitcoin to offset the self-mining expenses, including power and hosting partners' income. We also hold Bitcoin as part of corporate treasury policy and sometimes use Bitcoin as a collateral to maximize our capital efficiency. This is one of our mining joint venture projects which we partner with Soluna, SLNH. It's a 20-megawatt hosting agreement to deploy our A15 XP mining machines at their wind power project, Dorothy, in Texas, which strengthens our North American mining footprint.
We have several partners, including Soluna in North American regions. And we have a great relationship with all of them, and we look forward to expanding our sale mining in 2026 and going forward. This is the project we did with a company called Aurora AZ in Canada. Traditionally, the flare gas would be burned and wasted by the owners. But a lot of people are connecting these gas wellheads and use the flare gas for commercial use. Bitcoin mining is a great way for them to utilize that technology. And because the technology has been advanced, the uptime and mining efficiency of these projects have improved recently. So this pilot alone is expected to emit an estimated 12,000-40,000 metric tons of CO2 equivalent emissions.
And we think this is a great way for us to mine innovatively and with a lot of contribution to our sustainability in energy, especially nowadays when the grid power is prioritized for AI HPC data centers and residential use. We try to explore alternative ways in different places with third parties for Bitcoin mining. This is also in our blood to innovate and to enable. As I mentioned, this is a heating greenhouse in Canada where high efficient energy use with an estimated 90% heat recovery for the mining operations, meaning 90% of the heat is collected and used to grow vegetables. And economics is very attractive because this is agriculture power. So this is definitely a win-win situation for us and our partner. We have strong North American customer relations, including Cipher Mining, Hive, Stronghold, XtraXtra.
They all provided very great and positive quotes for machines from their firsthand use. Even though some of these companies have moved along and focused on AI HPC mining I'm sorry, AI HPC data centers, they actually kept their mining fleet because it is important for them to keep a larger power contract on the grid. Bitcoin mining will help them maintain these relationships with the grid. And Bitcoin mining can be a lot more flexible than data center applications. So when the grid asks them to turn off some of our machines, they could just turn on the Bitcoin mining, which provides the grid with flexibility and, in turn, helps them with the energy price. This is our facility in California. After the policies on tariff has changed, we also have manufacturing in Malaysia and China, and we deliver world-class after-sale support.
We had set up more than 25 service centers in five continents. So our machines are worry-free. When people buy them, they can always find the nearest location for services. We also work with third parties that have provided these replacement services and maintenance services on-site to continue to provide excellent third-party services to our customers. So here is the revenue. As you can see, since 2024, our revenue quarterly revenues have been consistent, beating our guidance, especially for the third quarter, which had a total revenue of $150 million. Our fourth quarter guidance had come out at $175 million-$205 million, which was also a big jump. Our Bitcoin holdings and market value have also grown over time. We had 1,750 Bitcoin held as of December 31st, 2025. As you can see, sometimes we receive Bitcoin, and we use them for collateralize.
And once they put out, we record them as receivable on the balance sheet. But they're still our Bitcoins. Once we repay our loans, they come back as self-owned Bitcoins on our balance sheet. Inventory is a bit high in the third quarter only because we had to prepare for our historical largest order, which will be delivered in the fourth quarter. That is over 50,000 machines in one order by a U.S. miner. And that contract brought us to the fourth quarter with a record high estimated revenue and also led us to have a lower inventory level in 2026. So getting more prepared for the upcoming disruptions in Bitcoin prices, if there will be. And our cash on the balance sheet is close to 120, was close to $120 million by the end of the third quarter. More financial data.
Our self-mining average revenue was $114,000 in the third quarter. Our gross profit has been consecutively positive for three quarters, and our loss from operations have been narrowed over the past five quarters. We launched a share repurchase program, and we've been actively repurchasing stock because we think our stock is undervalued. That is the end of the presentation. Now we're open for our Q&A. Great.
Thank you for that, Leo. Okay, awesome. So we do have questions coming in from the audience. I will maybe kick us off with one or two of my own. First, you did mention you're worry-free as it relates to tariffs. There was this Supreme Court. The first day they could have ruled on this was yesterday, Wednesday, and they haven't ruled on it yet. But you could see a ruling that basically removes the tariffs, right? Do you view that as actually almost a negative outcome given that a lot of your peers are international in markets with maybe higher tariffs? And maybe speak to us a little bit about that and any kind of ruling that you guys are looking for or thinking about as it relates to those peers.
Yeah, thanks, John. That's a great question. I think that overall, the world has entered into an era where participants have been performing in a much different way than before. In the past, we can see large nations collaborate with each other, whether on technology or on consuming areas. China, for one, provides very cheap labor and commodity. And the U.S. has been great in utilizing technology. So in the past, China didn't have much of deflation, and the U.S. didn't have much of inflation. Everything works in concord.
But now, I think tariff was just one of the events we can see, which is a popular tool to be used by our administration. I do think there is extent, and I'm happy to see that there is a limit for the administration to move ahead with tariff. As you pointed out, the judicial power will have a say on whether it's possible to continue to use these tools. But overall, I think the world has entered into an era where people destroy each other. And that means a lot of companies and also a lot of nations will have to continue to invest into their self-defense, their self-critical minerals, their self-constructions. So I think having more manufacturing facilities across the globe will provide us with a little bit of a barrier against these risks.
And as you mentioned, for our customers, I tend to believe that the U.S. customers are different from everywhere else because they have access to capital on capital markets. As I have witnessed in the past for three to four years, when American miners started to grow, the miners in different places will tend to slow down because American miners can deploy capital very, very intense. So for the other part of the world, they sometimes caught up when American miners have paid their bills and started to deploy their machines. Of course, everything's subject to Bitcoin mining and Bitcoin prices. But I do see that there is a staggered cadence between the U.S. and other places, even though without the tariff. So you're right, yeah. So if the tariff moves against the other miners, the U.S. miners might boom up as well.
But they don't go into the room at the same time. So it's great for us to have international operations and sales teams and capability to support different customers with relationships. And that also echoes with our focus in the U.S., building into our brand name and helping our customers because we do believe Bitcoin will continue to thrive, even though we are facing energy and also labor shortage here in the States. But business cycles come and go, and we are positioned to support our worldwide customers and partners.
Great. Last one for me, and then I'll get to some of these other ones. As you think about the U.S. power market moving more towards supporting data centers and AI, where are the most interesting power markets for Bitcoin mining to move into? There's obviously some pockets in North America, and you have some of those operations. But where is kind of the puck going for that if we do see a lot of the available power in the U.S. go to the data centers and not to the Bitcoin miners?
Yeah, I think it's not a black-and-white situation here. I'm one of the believers that the Bitcoin mining actually works in concert with AI data centers. First of all, most of the mining operators who operated Bitcoin mining for three years had established a very well-established relationship with the grid and also the power generators and the contractors, which enabled them to jump onto the data center construction at a pace that traditional data center operators weren't able to catch up.
I think one of the reasons they are close to the market and had a lot of support from retail also helped them to diversify into creative fundraising methods like convertible bonds and project finances, which give them a lot of leverage to provide and to ensure that their customers, including hyperscalers, have the confidence in their balance sheet and, going forward, capabilities to building out their data centers. I think that was also built through their experience and their capital markets efforts with their existing businesses. I have yet to see any miners start to fire sell their mining fleet. Sometimes I do see them slowing down their mining machines, but others still keep growing their mining machines or refreshing their mining machines.
One example was that we got this historical high Bitcoin mining purchase order from a major miner in the U.S., which is expected to be delivered in the fourth quarter and the first quarter of 2026. So we think, to your question, the powers are available to AI data centers when they can be available, but some powers are not that 100% suitable for AI data centers. This does bring up the power problem because when the sellers of power see that the AI data centers are less sensitive to power prices, they wanted to mark up their power prices that are not suitable for AI data centers also at a higher pace, which creates a problem for Bitcoin miners to expand.
As a technology innovator here, we are exploring alternative ways to reuse the wasted power and explore ways for people to get a power price advantage here in the U.S. and Canada, especially. But my point is the market will cool down, right? So when people start to feel realistic about the power, because once they sign to a power contract with the grid, they have usually 12-24 months to execute their contract. And if they couldn't find an off-taker or user, their power contract will expire. So they will be more realistic when approaching the end of the power contracts. And that is important because Bitcoin miners are still the most important users here for a lot of the sellers. They're growing energy.
Yeah, thank you for that. We're pretty much at time, so I maybe want to get to one more here. How has your market share evolved over the past few cycles? What's driven the gains or losses?
I think we've been gaining market share. There's been some third-party independent market investigators, and they believe we have grown over time. We are now positioned as a second provider in terms of hash rate delivered. Our major two competitors in the market have been moving with their machines as well. We are moving with our machines, but I think a lot of our market gain effects came from our better-than-peers durable machines in durability and also worry-free maintenance, and also we are a public company with a lot of more transparency as opposed to a China-based private corporation. So our partners in the U.S. also will value that, right?
So I guess in a time where international trade has been so volatile, some of our customers expressed interest in our machines because they thought we would do what we offer. If we tell them this is made in Malaysia, this is made in the U.S., the machine will be made in the U.S. and Malaysia. They don't have to worry about whether these machines come in and carry a tariff on the black market or tax evasion. So there are several factors, but I think, first and foremost, that this is very important for our company to strategically invest into customer relationship and R&D.
That's great. With that, we are at time. Leo, I want to thank you so much for joining us and for those in the audience who listened in and submitted questions as well. Thank you.
Thank you, John. Have a good rest of the meeting.
You too.
Thank you.