What happened
The crypto winter might still be upon us, but Canaan (CAN -2.62%) had a bit of heat under it on Thursday. Following the release of the Bitcoin (BTC -1.38%) mining equipment maker's latest quarterly results, investors sent its share price nearly 1% higher on the day.
So what
China-based Canaan's second-quarter figures showed that it earned revenue of just over 1.65 billion yuan ($243 million), for a very healthy year-over-year rise of 53%.That was on the back of an almost 28% rise to 5.5 million Thash/s of total computing power sold -- a key metric for the company.
Net income based on generally accepted accounting principles (GAAP) ballooned by nearly 150% across that stretch, rising to slightly under $90 million, or $3.47 per share.
Canaan is a pick-and-shovel play on Bitcoin. As such, its fortunes aren't entirely dependent on how the coin trades in the market. Management attributed the company's top- and bottom-line growth to the notable increase in total computing power sold, combined with the relatively high pricing it was able to maintain despite the decline in Bitcoin's value (and despite discounts it began to offer its clients).
Now what
The cautious investor reaction to the otherwise impressive second quarter was due to Canaan's guidance. The company sensibly believes it will be contending with a more-challenging market, chiefly due to both Bitcoin's depressed price and increased energy costs (mining Bitcoin is an extremely energy-draining process).
Canaan proffered guidance for its current (third) quarter of $133 million to $162 million in total revenue, which would represent a year-over-year decline ranging from 17% to 32%. It did not provide any profitability estimates.
