Canaan(US:CAN)2023-04-18 16:00Financial Statements Unaudited Condensed Consolidated Balance Sheets As of December 31, 2022, Canaan Inc.'s total assets decreased to RMB 4.77 billion from RMB 5.63 billion a year prior, primarily due to a significant reduction in cash and cash equivalents, while total liabilities saw a substantial decline to RMB 538.3 million from RMB 2.17 billion, mainly driven by a sharp drop in contract liabilities, consequently increasing total shareholders' equity from RMB 3.46 billion to RMB 4.24 billion Consolidated Balance Sheet Highlights (in thousands RMB) | Balance Sheet Item | Dec 31, 2021 | Dec 31, 2022 | Change | | :--- | :--- | :--- | :--- | | Total Assets | 5,632,257 | 4,774,038 | -15.2% | | Cash and cash equivalents | 2,684,342 | 707,261 | -73.7% | | Inventories | 812,363 | 1,473,990 | +81.4% | | Total Liabilities | 2,173,567 | 538,311 | -75.2% | | Contract liabilities | 1,340,731 | 4,613 | -99.7% | | Total Shareholders' Equity | 3,458,690 | 4,235,727 | +22.5% | Unaudited Condensed Consolidated Statements of Comprehensive Income/(Loss) (Quarterly) For the fourth quarter ended December 31, 2022, the company experienced a significant downturn, reporting a net loss of RMB 610.2 million, a stark reversal from the RMB 1.2 billion net income in the same period of 2021, driven by a sharp decline in revenues to RMB 391.9 million and a gross loss of RMB 431.1 million as the cost of revenues surpassed sales Q4 2022 Financial Performance vs. Prior Periods (in thousands RMB) | Metric | Q4 2022 | Q3 2022 | Q4 2021 | | :--- | :--- | :--- | :--- | | Total Revenues | 391,926 | 978,207 | 2,184,555 | | Gross Profit/(Loss) | (431,053) | 219,336 | 1,486,949 | | Income/(Loss) from Operations | (835,812) | (66,977) | 1,213,225 | | Net Income/(Loss) | (610,220) | 46,060 | 1,196,529 | | Basic EPS (RMB) | (0.2426) | 0.0180 | 0.4598 | Unaudited Condensed Consolidated Statements of Comprehensive Income (Annual) For the full year ended December 31, 2022, Canaan Inc. reported total revenues of RMB 4.38 billion, a 12.2% decrease from RMB 4.99 billion in 2021, with profitability declining sharply as gross profit fell 45.7% to RMB 1.55 billion and net income plummeted by 75.7% to RMB 486.4 million, partially offset by a significant increase in mining revenue Full Year 2022 vs 2021 Financial Performance (in thousands RMB) | Metric | FY 2022 | FY 2021 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | 4,378,907 | 4,986,706 | -12.2% | | Gross Profit | 1,547,800 | 2,850,745 | -45.7% | | Income from Operations | 304,710 | 1,828,325 | -83.3% | | Net Income | 486,357 | 2,000,282 | -75.7% | | Basic EPS (RMB) | 0.1900 | 0.7932 | -76.0% | - Mining revenue showed substantial growth, increasing from RMB 21.7 million in 2021 to RMB 218.6 million in 2022, a tenfold increase9 Non-GAAP Financial Measures Reconciliation The company provides reconciliations from GAAP net income to non-GAAP adjusted net income for both quarterly and annual periods, with adjustments primarily excluding non-cash items such as share-based compensation expenses and the change in fair value of warrant liability to offer a different perspective on operational performance Quarterly Reconciliation For the fourth quarter of 2022, the non-GAAP adjusted net loss was RMB 513.7 million, derived from the GAAP net loss of RMB 610.2 million after adding back RMB 96.5 million in share-based compensation expenses Q4 2022 Non-GAAP Reconciliation (in thousands RMB) | Metric | Q4 2022 | | :--- | :--- | | Net Loss (GAAP) | (610,220) | | Add: Share-based compensation | 96,548 | | Non-GAAP Adjusted Net Loss | (513,672) | Annual Reconciliation For the full year 2022, non-GAAP adjusted net income was RMB 869.2 million, a significant decrease from RMB 2.3 billion in 2021, calculated by adjusting the GAAP net income of RMB 486.4 million primarily for RMB 407.4 million in share-based compensation and a RMB 24.6 million gain from the change in fair value of warrant liability Full Year 2022 vs 2021 Non-GAAP Reconciliation (in thousands RMB) | Metric | FY 2022 | FY 2021 | | :--- | :--- | :--- | | Net Income (GAAP) | 486,357 | 2,000,282 | | Add: Share-based compensation | 407,397 | 491,461 | | Less: Change in fair value of warrant liability | (24,598) | (190,178) | | Non-GAAP Adjusted Net Income | 869,156 | 2,301,565 |