On September 8, Canaan Inc. (NASDAQ:CAN) announced its second quarter FY26 results, which did not inspire confidence. The computing and energy infrastructure innovator posted total revenue of $31.9 million during the quarter. The topline figure went down compared to $100.2 million in Q2 FY25 and $62.7 million posted during the first quarter of 2026. Canaan reported a Q2 net loss of $97.6 million, which was significantly higher than the $11.1 million loss incurred during the same period last year.
Photo by Anton Maksimov juvnsky on Unsplash
Digital Asset Holdings Hit Record High
Canaan sold 2.5 EH/s of computing power during the second quarter. The standout factor was quarter-end digital asset treasury, which reached a record 1,915.5 BTC and roughly 3,952 ETH as of June 30. Management also prioritized controlled spending, efficient cash management, and lean inventory position.
Canaan’s mining segment generated 243 bitcoins and maintained its positive cash contribution before factoring in depreciation during the reported quarter. This was primarily fueled by favorable power economics for the business.
Lower Bitcoin Prices Weigh on Financials.
The company’s second quarter revenue from products stood at $13.6 million, down from $71.9 million reported in the corresponding period last year. The decline reflected weaker mining-equipment demand amid lower bitcoin prices, which reduced both computing power sold and average selling prices. Implications of lower average bitcoin price were not limited to the products segment, as Canaan’s Mining revenue also dropped from $28.1 million in Q2 FY25 to $17.7 million for the reported quarter.
The change in fair value of financial derivatives and cryptocurrency holdings resulted in losses of $8.9 million and $9.3 million, respectively for Q2. This was a major swing from profitability seen in the same period last year, where the company posted gains of $23.4 million and $10.6 million, respectively.
Net foreign exchange losses totaled $3.0 million in the quarter, an improvement from a $4.0 million loss in the first quarter of 2026, though it marked a reversal from a $0.3 million gain in the same quarter of 2025.
Institutional Sentiment
Based on data tracked across 1,000+ hedge funds by Insider Monkey, institutional sentiment toward the company remains weak. According to 13F filing data, number of smart-money managers with long-term exposure in Canaan remained stagnant, as only 6 hedge funds held positions by the end of Q2 2026, same as the previous quarter. Short interest of 8.90% indicates moderately high level of speculative bets against the stock.
Invesco is the largest institutional stakeholder, as per Yahoo Finance database, holding 40.4 million shares as of June 30. This amounts to 5.39% of outstanding shares. Other notable institutional investors include Weiss Asset Management and Galaxy Digital, holding 5.19% and 1.56% of outstanding shares respectively.
What Lies Ahead
Near-term guidance suggests the pressure may intensify, reflecting continued weakness in market conditions and customer demand. The company expects third-quarter revenue of $11 million to $15 million, well below the $31.9 million generated in Q2. A sequential and annual drop in topline figures, product revenue, and mining sales clearly indicates that Canaan is currently facing severe challenges linked with a weak bitcoin market. Although positive cash contributions and record quarter-end digital asset treasury offer some encouragement, fair value fluctuations and mounting net losses point to volatile fundamentals for the company. Going forward, investors should monitor developments around the reported metrics, which for now result in a pessimistic tone.
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