Earnings call transcript Q2 2023

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Operator

Ladies and gentlemen, thank you for standing by and welcome to Canaan Inc.’s Second Quarter 2023 Earnings Conference Call. At this time, all participants are in 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 host today, Mr. Director company. Relations Investor Soucy, of the Clark Please Clark. go ahead,

Clark Soucy

were everyone, welcome you. results earnings online. newswire quarter currently conference and Thank earlier for by our today services second operating call. and available and to Hello, are our financial The the released company’s

our today us and Chairman James Jin Mr. Nangeng and Joining Mr. CEO, Cheng. our Zhang, are CFO,

during In Manager, will IR Ms. Xi addition, Zhang, Mr. Leo be Wang, the available IR session. Senior Director and question-and-answer also

the the of and call will for by and open providing for your call we Zhang quarter.. performance financial up before Mr. start the for overview highlights questions. will the then an provide company's results company Mr. Cheng the period details the on operating

to materially risks, set on cause except documents and press in Securities These of forward-looking and the safe will and not in may and from only XX-F no estimate assumptions in refer law. with Today's guarantee not Before the press may the including thereof operations and and release. differ to on and forward-looking company. company statements. release most harbor of forth include results limited annual today’s earnings or we are project made uncertainties be factors Commission, for uncertainties company to we include, as those I of that actual to statement future such date to, like as any continue, our Form revise but file call our the and results recent for statements would risk subject These or obligation press to information statements. Exchange statements report that the that release, These future call refer the outlook are our Please webcast the assumptions. our performance statements by the required statements assumes you or performance statements do to speak risks,

certain discuss measures for These measures to non-GAAP isolation believe we from non-GAAP in we measures results. GAAP are today's should financial In supplemental in both substitute useful performance. webcast, and which considered addition, call company’s and a as or addition financial as be will during measures the GAAP not and of

non-GAAP in can earnings with regarding reconciliations press website. these release, additional our disclosures GAAP posted on company results including which comparable measures You is find the

With call to Please that, Chairman Zhang. CEO, Nangeng go will I ahead. now turn over the our Mr. and

Nangeng Zhang

results is in company's and Hello, the James the CEO you Canaan. joining at to I everyone. NG, of Singapore Thank headquarters for our conference with are you. our quarterly and This share call.

of to XXXX, remained the end dollars of price around of both During quarter quarter. beginning at the $XX,XXX the at Bitcoin second the the $XX,XXX and US

cash of However, downward XX%. by quarter, trend, continued for to overall increase the rate the experienced while most a it about network steadily

did over Bitcoin with adverse both on profitability The price have willingness impact difficulty and sluggish rise mining mining coupled make at purchases. our in certain to

inventory relatively and inventory. high, remaining machine approaching pressure providers eager their mining industry's the of product With level all the updates clear are to the highly

continues to remains As machine machine the In bear under of and mining power market. be intensified price mining result, has a market the in computing pressure. a competition the summary, market the in

Given twofold. this efforts our situation, are

our one upholding are operations. On to we and ensuring other financial resilience stable hand, the dedicated --

also points actively towards this opportunity that discuss on. hand, focusing we opportunities. to would other the I strategic take growth like are On we allocating to resources are future several

and committed upgrade R&D to investments long continuously products. our are capacity term the we in to integrate First, and production

of and recognition supply As products Series achieved this the earlier, customer their we in increase leading volume again to for performance, in record AXX quarter mentioned a stable shipment our year. first

series of significantly cells quarter, computing the AXX power of second During AXX series. that surpassed the

costs. R&D investing We efficiency, reduce increase power, and product computing in power enhance to constantly are

Currently, efficiency debugging power long first efficiency range the commitments. terahash. this And continuously are and even to products iterative terahash, power will In half the products the trial challenging these to market joules production [bulk the to customer optimize stages. is the half fulfilling small-scale of machine in divestment. for per chain to a prudent of the XX products we the started our take In as further of R&D joules per in year, current (ph) of we new carrier's] reached in invest second preorders, environment, have our XX XX us year, XX supply term

with strategy, alignment we beyond are in mining our our machines. portfolio planned product diversifying Furthermore,

solutions our mining Following and extensive operations assist These miners [indiscernible] various period nature proprietary in of R&D and solutions. are rapid harsh launch in about effectively integrated to deployment to will testing, we conditions. adapt

XX-foot liquid to customers in integrated the received products testing. XX-foot development be container container air-cooled Avalon orders for mining have to and have products cooled type They half are product delivered mining completed XX-foot this and expected year. Our of already and second

system highlighted developing channels worldwide. connect more we support customers. convert sales to quarter, and Second, international customers engaged work clients, We optimizing and comprehensive large we sales our retail with effectively enhance customers on to reach our develop and global Last our to system. continue and building, and refine our

despite quarter, the on quarterly improved phase, This our a still sales basis. market overall bearish in being significantly

expanding small sequentially, Bitcoin opportunity, and X.X in surge sales Cipher American fees a clients reached with million, market, in the second, Our the product about total key transaction per as computing responded $XX.X rapidly was to early in terahash revenue XX% power by contributing engaging we million of brief a there demand of computing Stronghold. such May, sales into seizing decisively North upturn power, up

mining. also from order XXX,XXX of sales. terahash power sales second are in steadily Asia, distribution Specifically, we digital computing we channels a received marks second secured in entry Meanwhile, per resulting order expanding. in our from This per July, milestone market. Stronghold In significant into a X.XX terahash Cipher Southeast US mining, significant million a our

quarter. second the further third contributed by the of figure contributor this in $X.X quarter, In million was revenues sales, grow

to Brazil, sales the and store from and customers a Cyprus quarter, continue Hungary, time. establishing It’s takes for global the first time. that the system the cutting vast world UAE, retail noting online its is global second overseas base Lativia expand reaching to worth in customers Our customer

working positive are with we'll diligently, We you updates. further and share

committed Third, projects. we will we remain mining strategy continuously explore our to and mining

During X.X Through the batch the we Recently, be exahash the expected of an which adding X.X mining our third power. partnership our second deployed initiated Stronghold, new per have of Stronghold quarter. initial successfully several to second listed with computing second have and of power, expand quarter, the projects. company public operational business partnership with we is reached installed per future to agreement our computing exahash during

quarter, computer Ethiopia in and of expansion the marking small-scale for power second we Since our installed mining these also testing into Paraguay, the have regions. first business

mining Although computing to BRC-XX which boosted activities. Bitcoin operations in a the mining This to was second thanks quarter, achieved the rise network increased for total our remarkable such our rewards uptime and result. power industry as continuing events

XXX produced contributing we $XX.X million, quarter, a XX.X%. this of During Bitcoins, revenue sequential growth mining

As the US previously machines announced, we policy mining X July. machines leading our partner XX,XXX affected default with mining a exahash installed remaining computing of a early in projects, the by that power since recent to been per shutdown business -- mining temporary XX had the already At Furthermore, along approximately These by changes to relevant mining second are to in starting due has Kazakhstan, of installed X in apply working site. be we quarter. computing to in to regular expected operations adjusting and resume at exahash be partners close mining with collaborative two impact power affected. of will our for incidents per third the present, are local Kazakhstan installed operation the second power to actively to approach the licenses installed

that to our the project diligently At are default through means, active we challenges It's address point important rights difficulties of in are unchanged. The the various interests believe that key same and global journey. company a and the and comes normal we expansion note the intermittently fundamental our partners this issue for business remains and investors. direction setbacks safeguarding part with working is time, to the legal US with

computing the as At also losses the development leverage to taking mining are recently a learned that with are proactive upholding we continue ensuring steps even. power the We advantages to in minimize to not key supply, strategy. present, license our

We Bitcoin and high-quality exploring are consciously, and accommodating new mining absorbing of and proceeding expanding experience assets. project opportunities

upcoming through for cash the market weak same in positive. ensure the growth prepared to remained remains strategies. fully we Overall, yet assets bull trend time, will with the At performance allocating This accumulate levering and environment following will market flows operations. Finally, be robust persevere sustainable maintain we to strive resources our quarter, potential challenges, operational our while the strategically [indiscernible]. was the second

created quarter. noncash of continued series substantial provisions, our financial the and/or a price on selling resulting decline growth However, in statement of this has losses material

on cash challenging this our In focus preservation intensified. market has environment,

activities. didn't we our utilize quarter, or the facility ATM financing conduct During

a only experienced level prudently decline was flow sequential cash overall. and Our slightly managed

the momentum. interest half increasingly rate significant move market of believe have the broader economic come that a further sufficient into uncertainty, stop cause fluctuations we hikes not US have the this price. to and outlook the the uncertain. global to in still unforeseen Amidst We events As Bitcoin potential remains second XXXX, complete lacks upward

present large overall This and In investment quarters constrained. The trend both aligns to challenged unforeseen hash financing in also In hash miners some these year. assessment. industry's mining our recent indicates scale addition, operations. capabilities operations. incremental three in to concerning rate changes remain of and decline various uncertainty and first during countries cases, policy rate the changes the crypto-currencies could deployment market Furthermore, further with our notable industry introduced a actual the growth curve this our

just outlook a all have XXXX. the factors third the Given cautious highly outlined, of quarter have I we for

-- approximately subject may that on our the the and forecast operational for to views the be revenues expect and million. be results quarter reflects actually conditions current This We market change. from will $XX

be inception already have in might XXXX. you our navigated as we since Bitcoin Overall, cycles aware, several

experienced market we history each resolve stronger the is remain day encounter. We the we to become new before. fully task Bitcoin confront Our every performing day, we day the Much than create new and itself, challenges committed ahead to and curve. more where of like with

we [voting] celebrate stands distinction the first XX, of listed in Singapore. in XXth the September Canaan being (ph) proudly and company our industry the to company's plan NASDAQ holds anniversary industry. on month, Next out

past decade, group from chief project capabilities into remarkable. has our leading been company evolution a multinational the design Over a with

decade the potential we in Canaan into to of exciting consider. are coming development, As decade step achievements next the

the turn Thank everyone. James. concludes now call you, will over This I prepared remarks. you. CFO, our to my Thank

James Jin Cheng

you, speaking and This Thank headquarters. James good at is Singapore our NG, day, everyone.

very with, like XXXX the say factors. with NG a a to range influences mining period was still of industry complicated second for of started As quarter call the machine would dynamic Bitcoin bear market I and mixed the

growth rapid there The two. $XX,XXX Bitcoin Bitcoin quarter $XX,XXX First, upside $XX,XXX price as the one. for $XX,XXX interest in compared into to to this of the of range no was significant hikes, settled observed from between period in rate we a to quarter in price

the fees. transaction Secondly, enjoy incident May, the miners future increased there in BRC-XX possibility from was mining helping of higher these fees, revenue signaling

continued quarter. be levels remained and the climb, considered one. in mining to Thirdly, XX% to by Inventory Moreover, All prices to for machine the numbers. demand rate when competition quarter Total mining compared our increasing over quarter intensified hash manufacturers. to quarter one. the machines total observed continued two increased above decline should among QX we high analyzing selling Bitcoin compared factors

Of to also numbers resilient. our did keep course, operation we our and the deliver best

Let's revenue generated beat XX.X% represents which and quarter $XX speaking total million, Overall guidance our start loss. of $XX.X with of quarter-over-quarter. profit increase two, million an and in was

more total contributed revenue and mining our a in high to quarter. XX% our of reached Additionally, than million revenue record this $XX.X

sales, mining XX.X% million machine higher our in $XX.X than our the quarter, from in million this $XX.X quarter. machine was last sales Regarding revenue

and XX.X%. second, of year-over-year a of per total terahash a a million growth computing power delivered XX.X% sequential of representing growth We sold X.X

fierce However, to quarter average slightly per resulted $XX quarter still the which $X.X price competition. per per selling in two, second from per two terahash terahash from declined second in

price sales, mining we sequentially. This XX% million in selling a by the recent concessions $XX.X write-down, inventories for on where this write-down offered Specifically, $XX.X recorded August. we subsequent for write-down accrued for was purchase prepayment decreased provision inventory in machine quarter. and for reserve inventory price write-down further most inventory based commitments of million our The

million US no excluded, our and figure, quarterly for write-downs our impact gross of profit the If provision provisions mining do of sales commitment for making result rules, to was are made $XX.X produce which plan were million margin Those and cash Another we mainly the one-off X.X%. loss to inventory gross have status. and into machine not provisions reserve a under for mining write-down previous a GAAP jeopardizing a longer a wafers, write-downs above and gross our would but of machines. generation and we $X.X profit

Turning a the to our our growth high record representing during price this Bitcoin mining a across mining revenue and $XX.X XX.X% of of business. million, growth rewards Because from network year-over-year of and recovery reached quarter, increased driven sequential the Bitcoin of a XXX.X%. BRC-XX

second the exahash total second. rates rate more more reached per quarter's deployed and X.Xx our of remained As second hash at than our than end, per exahash hash installed X

mined XXX mining deducting quarter. X.X% in profit. terms for We in of hosting points Bitcoins loss and Please quarter of achieved note in or profit margin and without mining depreciation. here business Gross was mining revenues defined the as profit this Bitcoins this of energy consideration XX.X that mining our mining is revenues proportion cost for for

look expenses. us let at take a Now the

was the decrease year-over-year prior compared due in our Our the to continuing development period. $XX.X reflected to last building commitment for this decreases research and million slight materials in $XX.X in to The quarter The R&D and expenses growth in quarter-over-quarter purposes. talented steady million year used a R&D were the $XX.X team. quarter, million

of sales upsizing million, compared to $X.X two. period. quarter-over-quarter were commissions marketing quarter and in expenses Our because from increased revenue Sales and to prior one million quarter the year $X.X the $X.X quarter million in last

last this Our of were and $XX.X sequential the compared period. million $X.X quarter were million administrative quarter expenses $XX.X impairment the increases million general and to in to year million year-over-year The in equipment. and in and due mainly prior $XX.X property in

loss Therefore, These issue at in legal deployed mining and we in since we affect States, $X.X in down United million mining for XX, machines initiated recorded process partner XXXX shut a to to substantially resolution anticipated Kazakhstan XXXX. we power the on US-based and project. in the with mining we computing computing $X.X are August and temporarily order million challenges our related a As power dispute operational exahash quarter compliance X impairment of July starting announced the The in of our third the of Kazakhstan last million million of to write-downs loss US having a million respectively. This on net one-off prepayments million quarter. in PPE profit compared hitting QX totaling and compared operating to reduction is of $XX.X quarter also included The quarter. impairment the while GAAP $XXX.X was and of last the holding $XX.X loss, the The inventory, cash loss foregoing impact was under $XX.X this immediate status. necessary of action result $XXX.X series net necessary an no for million.

Turning sheet. our balance to

XX, on of $XX was to March. cash and compared spent in in $XX wafer the exporting million two, $XX We cash to tax decrease totaling supply for for let a status. refund all, The $XX cash payments expenses. inflows operations million cash by production. of $X sustain machine value-added sales. million included $XXX tax Other million First and $X net at and keep and eyes we quarter $XX of sales from cash-out the held million of us million of the equivalents with as of million end million June And accumulated

of quarter, based accounting provision I'd PPE non-cash provisions previously we've in reserve write-down, expanded one-off commitment current reemphasize on requirements including or were in inventory to and series accruals As treatments losses. recorded resulted and that a this material US These impairment. like non-cash mentioned, GAAP for

these non-cash provisions not However, our and influence accruals flow. cash materially did

adopt certain of prudently policies. conditions, In corresponding have customers will future, the million. meet for As implemented account with of credit market we at key key policy to evaluate $XX.X the and who certain clients, receivable recorded customer order continuously resulting strengthen receivable end of this we collaborations In demand credit end quarter. the we of this installment account quarter, in account and an

our March at attention is than assets June own of Now holding our held XXX more of to XXX assets. end We Bitcoins which XXX as the XX, turning as Bitcoin our XX.

August sales utilized stock to repurchases. first held execute In neither XXXX stock will million. the results Bitcoins three, purchased May $XX or monitor we flexibly XX, customer to we of new potential our For value, future, anticipate a our cash ADS. XXX we XX, half, prices and deposits, the we the prioritize as From revenue of the quarter XXXX, carefully shareholders' balance we the In ATM XXXX, for received also and date any first which ATM quarter sheet. not flows is any reported financial

XXXX, second of facing and intense. remains price price the in different competition changes the of operations. mining is a half uncertainties crypto In regarding still environment also industry the Bitcoin will countries challenging Policy currencies to add and

cautious on give obstacles. quarter the Based We we will third a comprehensive for situation, of unforeseen face above XXXX. expectation the

XXXX second the of a as $XX.X Gross first Now $XXX.X $XXX.X to financial million briefly loss XXXX walk million of in period million million of XXXX of XXXX. the the of our compared of $XX.X and the Revenues of compared in quarter million you in the I quarter gross second $XX.X million $XX.X in first quarter. quarter would gross through in period for same loss was quarter XXXX. like the in results to a of to was same and profit XXXX the

in a Total quarter million same from was in operations from compared XXXX operating an XXXX the the and of XXXX million, of quarter Loss to and period the were million of of in XXXX from million second million of loss first quarter the operations quarter period of XXXX. income $XX.X same the compared $XX.X $XX.X first million $XX.X of $XX.X in operations XXXX. expenses of in the in second to $XXX.X

ADS per net and of loss Net diluted million, million a of $XX.X of XXXX of XXXX in of XXXX. period quarter income million the was compared XXXX $X.XX. were net a in net Basic in of loss same second the quarter second the $XX.X in $XXX.X loss to quarter and the first

of company cash cash and had equivalents million. June of XXXX, $XX.X As the XX,

our prepared This remarks. concludes

questions. for open now are We

Operator

question-and-answer will session. begin the We now

may question, and who other analysts a yourself time. three to courtesy to to ask As please wish investors at limit questions a a

questions have available call. the the team you If be follow-up Q&A Relations after any Investor the will after session,

benefit you. ask on wish in please For your in of immediately Thank Chinese, if all Instructions] English. your question the repeat participants to you question to today's call, management [Operator

take our first question. now will We

And your line first question go from comes Please the Benchmark The today from ahead. Legg Mike Company. of

Mike Legg

how last I'm specifically your given then focus the to hosted miners about product your what's self-mining your versus ex-miners and and environments morning. you and wanted also on rig the understand on Good release competition, versus efficiency Thanks. versus curious viewpoint week. Thanks. view

Nangeng Zhang

significant Hi, the think it's terms for first track the factor morning. have And the were This critical second range customers year, XX simple I efficiency is a our of already good our customers. this of XX power Yeah, already of a joules last compared on by is products the good -- efficiency improvement a joules. our in and fulfilled is per terahash. improvement of entered XX to the as efficiency, half evening, The power in products below or products, commitment. for this to year. half In the for our progress This planned. year, of

narrowing main our are with gradually the competitors. gap We

R&D yeah, closing. But And the we some the are Yeah. takes switch, time. I think and progress

that, diverse. beyond And number, adaptability mean, stability, is effectiveness. I and products -- environmental think beyond of product in I line So are our the production terms balanced power efficiency our cost

miners both customers. return making of preferred by advantage preferred in are and the think both choice So miners I -- goal the our and these is is products and is indictors, on have for our profitability an to influenced CapEx OpEx -- investment a

self-mining. the About Yeah.

Kazakhstan environment, the immediately into Since revolutions issued applications the the July, company for process has licenses. new a related issued in to came early regulatory Regarding policy effect detailed mining.

the taking initially requirements the stage actual we the leads anticipated. the early license application due is their in regulatory specific than process, found execution, longer that to However, which in to entire of process,

our partners operations For need Type for to before learned that Type mining X instance, license. submit we through to we obtain a applications can for X license particular wait we

of mining As cost early stages. It for are license the seems the local slow. The procedures for the for far new and regulations, process required local obtaining license projects. time up The are in specific actively company mining to being execution with mining as it's execution progress impact partners and still resuming take ramp progressing that X we applications. our will will generally know, facilities local Type our the

various to regulations. our with ways adjust are in continue We miners exploring agreement with local cooperation to and compliance also laws working

Furthermore, more are globally. we exploring opportunities cooperation mining valuable

business, set are has policies infrastructure where legal foot many The to policy economic as complex environments, which business is different and Our adjustments to reached necessary. our countries We risk. geographic political explanation places regions make environment the projects conditions and operational of and and before. closely in challenges regions and presents in haven't development, change, and and changes there's our operational we where there associated subject monitor

investors will also As announce time in references. for important a we developments public company,

Regarding someone business we do any who to that act faith. in the counterparty be not there acknowledged good risk, in market, may

experience, are progressing we in We cautious preventive in same addressing At the rewards risk learning measures. you. legal balancing measures, encountered issues more and the and are through projects time, being taking from projects resolutely conservatively. lessons partners, Thank selecting

Mike Legg

you very Thank much.

Operator

Thank you.

stand by. take Dede from ahead. now our next Kevin Please question. Please will This go Wainwright. H.C. from the line of is We

Kevin Dede

Hello, NG, taking inventory. you my spoke you much for gentlemen. bit little so Thank a to questions.

I global if think But series. seeing. I come you of you've think could more down a seeing Do inventory still think, sold little Could you you're Do James. they're -- March. pressure pricing. lots on end levels with you was on Clearly, color us you what a high? little the the give they've wondering Clearly, compare you're so bit? AXX worldwide. of there's of levels Inventory more did

future kind terahash So about I'm just per congratulations trends. on price that. of curious

Nangeng Zhang

Hey, thank morning. you. Good

mining has inventory. in think main machine months, the few I been market’s and focus upgrades past on product clearing the

decreased. of market has So as a result entry overall the aggressively

inventory remain year, market view clients have the and of themselves levels. provisioning the think note at relatively next Taking some to of worldwide the Bitcoin global both price with been I company still ahead market, high the this [indiscernible]. recovery a important it's the However, gradual

price policy that exchanges understand market is the somewhat to reform crucial fragile fluctuations. is it and and private However, sentiment

second for cannot four But clients preceding we plans. in disclose medium-sized traditional minded [indiscernible] machines. While specific the miners, a clear. year will next after the High-quality many the by having reasons, operation rate. expansion client the competitive of cost-effective expand to with half related to will overall short-term for the improvement gain years, is prepare trend models to small due and lower So

the is power So a machine computing generally minimum price market, in levels. due to at profit the even mining current instance negative or margin competition

So I think soon money machine machines, great from Yeah, pushing current prices, who value. their in will possible. still prospective hope the the the considering are purchase [indiscernible] platform mining We customers offering that as you. as face thank orders

Kevin Dede

to So need and NG, back your to orders also if curious returns strength. maybe Holding inventory? suppliers. when to spoke see on that able on being to the are you your I'm you at you you to mining orders chain? resume that foundry wafers those market you build concerned from you all wafer about not how will be your concerned supply machine get new Are How able

Nangeng Zhang

see. me Let

customers. I -- building are have machines when started that when production the foundries relatively the Recently, with currently, have the our competitive. ample from we think think we contract we I semiconductor

So with good wafer a price.

cost process wafer order high supply. have a for in since higher However, and technology to the nodes lower advanced due

chain so yeah, for not is quarters, two maybe think next the for problem primary the So, the I us. supply

the best market, focus we machines -- sales provide to in on will in our yeah. our the and Our R&D, performance with continue invest -- system

Kevin Dede

X to you for year? quarter perhaps the of question what the you installed, to September the NG. expect the balance can about your thinking exahash Kazakhstan is not Canaan and through me, be US, for in exahash Last running X talk in your Understand not investment Okay. self-mining X maybe given hash and exahash regarding what rate rate self-hash running

Nangeng Zhang

pass question will numbers, to the For I James. this

James Jin Cheng

James. Kevin, is Yeah. this

mining about as US talking is are We loss it's X X of not only is exahash, from the the power. exahash And about But Kazakhstan exahash X. from loss X.X said. of total you

South So exahash we here compared already and exahash we to of quarter have to States. the the X get in another sites as But -- take will And successfully some Africa, the X.X in well in exahash some is start United course, with with America. in And Stronghold total to three, in the States. in also slow United runs progress, also exahash time. for pilot brought and total North have X.X collaborate loss a quarter new it deployed Stronghold as cooperative is electricity we X.X America two, the

three, half recover -- in if machines will estimation about not So the lose half total at quickly. our of capacity my quarter could definitely least Kazakhstan we

So that's three. revenue in are reflected different for in also different our But quickly can total in quarter estimation quarter we sites this looking so four. about locations, recover we

estimation, recover mining execute from four, we a bigger will as So rate one take have in my you, Kevin. strategies of Thank we hash consistently. to the to quarter the continue mining chance operation and important will strategies our and

Kevin Dede

much, offering additional color. really Well, gentlemen. NG, for thank you, you so James. I appreciate it. you Thanks, Thank chiming in thank and for

Operator

Zhang is This of Guosen question. ahead. next from our the take Please Shuang now from line go Securities. We'll you. Thank

Shuang Zhang

[Technical Difficulty]

Operator

line Zhang, asking not This is Shuang operator. you too the please try your question is your again? Could clear.

Shuang Zhang

you clear question expect to out first when inventory? My is, do Okay. AXX the

James Jin Cheng

Shuang. you, Thank

expect progress fourth little bit we anticipated. are quarter point, slower been clearance think we a the I clearing this year And for complete the inventory models. AXX we by this AXX than of you. At to the working series. has actively of on Thank the

Shuang Zhang

second My deployment cash was progress on Language]. question installment? [Foreign rate mining your how is, and

James Jin Cheng

Yeah.

small lost capacity quarter United of of States. another three, our during two our recover definitely by As one exahashes hash one ready make X.X back and we quarter total And X.X Stronghold, capacity scheduled another during South that the step X don't means at I we we referred United in Kevin, States. sites partners Africa, to together, Stronghold. in have sites America exahashes quarter will but in the the four X.X quarter just in XXX% site quickly step North installed to Kazakhstan total new shipment the will of with we And can in and quarter mining three bigger implemented That have come the the to and rate three also, our we some in to ones. deployed pilot We exahashes we now with I with important in some America sites also runs. we back recover lose think two. quarter exahash Those with all new

think strategy, you. our I strategy. invest deploy machines we put say as and will will we your consistently support Thank to consistently Thank still Shuang. you, that So and to mining important I question,

Shuang Zhang

question computing last price? the power do And [Technical impact you. Thank how demand you the Difficulty] upcoming expect is, and events

Nangeng Zhang

Okay.

evening. Good Okay.

customers procure one to hand, the previously in As two through our mentioned, trends the past year. On half high latest contracts. machines expansion opting futures observed and minded models we quality

the number the purchasing miners On by are having models more a medium-sized other significant at hand, to of prices. older lower risk hedging

the So this general, recovering demand in fluctuation. is market

to sector due the continue Yeah, mining and intense prices. thank the However, inventory to experience power reactively competition, you. pressure will computing market on high

Shuang Zhang

for Thanks answer. Okay.

Operator

Thank you.

turn call closing As for any company now, to there no further I'd are the remarks. questions over like the back to

Clark Soucy

everyone. Thank This today. so is Hi, Clark. us again much for joining you

any our a have contact have questions, to nice please reach information and to day. the further provided you If on free to feel out website, us

Operator

today. you. That everyone, call you, concludes Thank Thank the attending. for

disconnect. now You may

Canaan (CAN) 29 Aug 232023 Q2 Earnings call transcript