Shares of Canaan (NASDAQ:CAN) were up on Tuesday after the company reported financial results for the first quarter of 2021. The company manufactures equipment for mining Bitcoin and mining activity has been on the rise. Because of this, business results are back on track for Canaan, exciting investors. As of 10:45 a.m. EDT, the stock was up 10%.
Canaan had previously told investors that orders had picked up. But not many orders had been delivered prior to Q1. Now as orders are being delivered, revenue is soaring. In Q1, the company generated about $68 million in revenue. That's up almost six times from the same quarter last year and up over 10 times from revenue generated just last quarter.
As a reminder, Canaan had a net loss of almost $33 million in 2020. But the company's surging revenue has helped it turn things around. In Q1, it had a net profit of about $200,000. However, it did still have an operating loss of $2.1 million. Still, these results were positive enough to encourage shareholders today.
Canaan is seeing an increase in orders, which bodes well for its business for the rest of the year. It currently has about $185 million in down payments for future orders -- known as contract liabilities. For perspective, this is almost triple its contracted liabilities last quarter. In other words, orders for its Bitcoin mining equipment is continuing to rise.
That said, Canaan did offer a cautionary statement in its official press release today. As May demonstrated, the price of Bitcoin can be volatile. Therefore, the company isn't giving official guidance in recognition that the future is difficult to predict when it comes to cryptocurrencies. While Canaan's Q1 results were strong, its cautious tone is a good reminder for anyone interested in this space.