CAN (CAN) Q1 2025: A15 Series Drives 136% Revenue Surge as U.S. Tariff Headwinds Shift Global Demand

May 20, 2025 | By EarningsIQ Research

CAN delivered outsized Q1 growth, propelled by its A15 mining machine ramp and resilient overseas demand, even as sweeping U.S. tariffs forced a strategic reset. Management’s pivot to global expansion and self-mining is cushioning the blow from a weakened U.S. market, but persistent policy uncertainty clouds the outlook and has prompted the withdrawal of full-year guidance.

Summary

• Tariff Disruption Redraws Market Map: U.S. import duties and retaliatory measures are rerouting demand and compressing margins for American miners.
• Product Innovation Lifts Margins: A15 series and Avalon Home models drive ASP gains and first positive gross profit since the downturn.
• Guidance Withdrawn Amid Volatility: Management pulls full-year outlook, citing policy and demand uncertainty, especially in North America.

Performance Analysis

CAN’s Q1 results reflect both the strength of its product portfolio and the volatility of its end markets. Total revenue soared 136% year-over-year, led by the mass delivery of the A15 mining machine series, which accounted for the majority of hardware sales and drove average selling price (ASP) per terahash up 30% sequentially. Mining revenue also posted triple-digit growth, with self-mined Bitcoin output rising 39% quarter over quarter, aided by increased operational hash rate and a competitive 4.2 cent per kilowatt hour power cost.

Despite a challenging macro backdrop—marked by a steep decline in Bitcoin price and a surge in network hash rate—CAN achieved its first positive gross profit since the onset of the bear market. Operating losses narrowed, supported by a 39% sequential reduction in general and administrative expenses. However, a $16.3 million fair value loss on crypto assets and non-cash financing charges weighed on the bottom line. The company maintained a stable cash balance near $100 million, even as it invested heavily in wafer supply and inventory to support future sales and self-mining expansion.

• Hardware Sales Momentum: A15 series shipments and higher ASPs underpinned the revenue beat and margin recovery.
• Self-Mining Leverage: Record mining revenue and Bitcoin holdings showcase the strategic value of vertical integration.
• Cost Control Execution: Expense discipline and process optimization contributed to improved profitability metrics.

While overseas demand is offsetting U.S. softness, the overall business remains exposed to external shocks and policy swings, as evidenced by the withdrawal of formal annual guidance.

Executive Commentary

Strategic Positioning

1. Global Diversification as Tariff Buffer

CAN’s pivot to diversified manufacturing—including a new U.S. pilot line and expanded Southeast Asia capacity—has mitigated some tariff impacts, but cost structure remains in flux. Management is evaluating a larger U.S. facility, but high costs and uncertain demand make this a calculated risk.

2. Product Innovation and ASP Discipline

The A15 series, CAN’s latest high-performance mining rig, has become the primary growth engine, driving both unit sales and ASP expansion. The Avalon Home series, targeting retail miners, is gaining traction, with 6,000 units sold in Q1 and total YTD orders topping 17,600.

3. Self-Mining Expansion and Asset Accumulation

Self-mining, or operating CAN’s own mining fleet, is now a core pillar, with hash rate deployed globally and a record 1,424 Bitcoins held by end of April. This vertical integration not only generates mining revenue but also provides balance sheet flexibility and optionality in volatile markets.

4. Flexible Inventory and Supply Chain Strategy

Prepayment-driven wafer procurement allows CAN to secure supply and manage lead times, but also ties up capital and exposes the company to inventory risk if demand falters. Management is closely monitoring market signals to adjust production and inventory in real time.

5. Cautious Capital Allocation and Shareholder Value Initiatives

CAN’s capital allocation is shifting toward liquidity preservation, with a potential share repurchase program under review to address perceived undervaluation. Recent financing rounds have bolstered cash, but management remains wary of further dilution or overextension in an uncertain environment.

Key Considerations

CAN’s Q1 reflects a business in strategic transition, balancing aggressive overseas growth with defensive moves amid U.S. policy disruption. Investors should weigh the following:

• Tariff-Driven Demand Shift: U.S. import duties are suppressing North American demand and raising execution risk for both sales and self-mining projects.
• Overseas Market Resilience: Asia, South America, and Africa are absorbing supply, supporting revenue diversification and reducing reliance on any single geography.
• Product Mix Evolution: New models like the A15 and Avalon Home are lifting ASPs and margins, but require ongoing R&D and supply chain agility.
• Balance Sheet Leverage: Bitcoin holdings and prudent cash management provide liquidity, but also introduce volatility tied to crypto price swings.
• Guidance Withdrawal Signals Uncertainty: The pullback from annual targets underscores management’s caution and the unpredictability of external factors.

Risks

CAN faces elevated risk from continued U.S.-China trade friction, unpredictable global tariff regimes, and Bitcoin price volatility. North American demand remains subdued, and further regulatory or policy shocks could delay recovery or force further operational pivots. Inventory build and prepayment strategies could backfire if demand softens, and share price pressure may persist absent clear catalysts.

Forward Outlook

For Q2 2025, CAN guided to:

• Revenue of approximately $100 million, reflecting current order pipeline and market sentiment

For full-year 2025, management withdrew guidance due to:

• Uncertainty in tariff policy and North American demand
• Lack of visibility into hash rate deployment and customer order timing

Management highlighted ongoing focus on global sales efforts, self-mining expansion, and cost control as key levers for navigating volatility. A potential share repurchase is under review to address valuation disconnect.

Takeaways

• Tariff Policy as Central Risk: U.S. trade actions are the primary swing factor for both sales and manufacturing strategy, with global diversification only partially mitigating exposure.
• Product and Mining Execution: A15 ramp and self-mining growth are delivering margin gains and operational resilience, but require sustained capital and supply chain management.
• Investor Watchpoint: Track tariff developments, U.S. demand signals, and management’s ability to flex inventory and capital allocation in response to shifting market conditions.

Conclusion

CAN’s Q1 showcased the power of product innovation and global reach against a backdrop of policy turbulence and crypto volatility. While the A15 series and self-mining operations are driving growth, the company’s fortunes remain tightly linked to external policy swings and the health of the broader mining ecosystem. Strategic flexibility and disciplined capital management will be crucial as CAN navigates the remainder of 2025.

Industry Read-Through

CAN’s quarter signals a broader shift in the Bitcoin mining hardware industry as U.S. tariffs and retaliatory measures force manufacturers and miners to diversify geographically and rethink supply chains. The pivot of U.S. miners toward AI and high-performance computing highlights the sector’s search for margin and stability in the face of compressed mining economics. For peers, the quarter underscores the need for agile manufacturing, robust overseas sales channels, and a willingness to flex between hardware sales and self-mining to weather external shocks.

CAN Information Technology Semiconductors Cryptocurrency Tariffs Mining Hardware Self-Mining Product Innovation