Canaan, Inc. Q3 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

Key Financial Highlights
  • Total Net Revenue: US$24.01 million — down 8.5% quarter-over-quarter (QoQ) from US$26.25 million in Q2 2020, and down 75.5% year-over-year (YoY) from US$96.76 million (RMB670.6 million) in Q3 2019.
  • Computing Power Sold: 2.9 million TH — up 13.4% QoQ (from 2.6 million TH), but down 20.7% YoY (from 3.7 million TH).
  • Gross Profit: Loss of RMB17 million — compared to a profit of RMB43.3 million in Q2 2020 and RMB146.2 million in Q3 2019.
  • Net Loss: RMB86.4 million (US$12.74 million) — widened from a loss of RMB16.8 million in Q2 2020 and reversed from a profit of RMB94.6 million in Q3 2019.
  • Non-GAAP Adjusted Net Loss: RMB84.8 million — excludes RMB1.6 million in share-based compensation.
  • R&D Expenses: RMB32.1 million — up 23.2% QoQ and comprised 19.7% of total net revenue this quarter (versus 14.6% in Q2 2020).
  • Cash and Cash Equivalents: RMB177.4 million as of Sept 30, 2020, down from RMB516.6 million as of Dec 31, 2019 — primarily due to increased investments in short-term financial products (RMB204.6 million).
Operational Developments
  • Nearly cleared inventory in Q2, ramped up production in Q3. New product revenue will begin in Q4 due to production lead times.

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Operator: Ladies and gentlemen, thank you for standing by, and welcome to Canaan’s Inc. Third Quarter 2020 Earnings 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 this event is being recorded. Now, I'll now like to hand over the conference to your speaker host today, Mr. Shaoke Li, Board Secretary of the Company. Please go ahead, Mr. Li. Shaoke Li: Thank you very much. Hello, everyone. And welcome to Canaan Inc. third quarter 2020 earnings conference call. The company's financial and operating results were released by our newswire services earlier today and are currently available online. Joining us today our Chairman and CEO, Mr. Nangeng Zhang; and our CFO, Mr. Quanfu Hong. In addition, Mr. Jingjie Wu, our VP will also be available during the question-and-answer session. Mr. Zhang will start with the call by providing an overview of the company and the performance highlights for the quarter. Mr. Hong will then provide the details on the company's operating and the financial results for the period, before we open up – open the call up for your questions. Before we continue, I would like to refer you to our Safe Harbor Statements in our earnings press release, which also applies to this call as we will be making forward-looking statements. Please also note that we will discuss non-GAAP measures today, which are most roughly explained and reconciled to the most comp

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