Canadian Solar’s Earnings Call: A Mixed Outlook

Canadian Solar ((CSIQ)) has held its Q2 earnings call. Read on for the main highlights of the call.

Canadian Solar’s recent earnings call presented a mixed sentiment, highlighting both achievements and challenges faced by the company. While the company reported strong module shipments and exceeded gross margin guidance, it also encountered hurdles such as storage shipment delays, impacted revenue from delayed project sales, and rising supply chain costs. Additionally, profitability was affected by nonrecurring expenses. Despite these challenges, Canadian Solar’s commitment to sustainability and strong performance in North America were positive aspects that balanced the overall sentiment.

Module Shipments Near High End of Guidance

In the second quarter of 2025, Canadian Solar delivered 7.9 gigawatts of modules, which was near the high end of their guidance. This performance underscores the company’s strong market position and ability to meet demand, particularly in North America, which contributed significantly to their success.

Strong Gross Margin Performance

Canadian Solar exceeded its gross margin guidance, achieving 29.8%. This robust performance was driven by a higher mix of North American module shipments and strong storage performance, showcasing the company’s effective operational strategies and market adaptability.

Sustainability Achievements

In 2024, Canadian Solar made significant strides in sustainability by reducing greenhouse gas emissions, energy, water, and waste intensities compared to 2017 levels. Impressively, the company increased the percentage of recycled and reused waste to 94%, highlighting its commitment to environmental responsibility.

Storage Shipments Below Guidance

The company faced challenges with storage shipments, which reached 2.2 gigawatt hours, falling below guidance due to tariff impacts that shifted deliveries into the second half of the year. This shortfall highlights the external pressures affecting Canadian Solar’s operations.

Project Sales Delays Impact Revenue

Revenue for the second quarter totaled $1.7 billion, but it was impacted by delayed project sales, resulting in lower-than-expected outcomes. This delay underscores the challenges in project execution and its direct impact on financial performance.

Profitability Weighed Down by Nonrecurring Expenses

Profitability was adversely affected by nonrecurring operating expenses, including the impairment of legacy manufacturing assets. This resulted in a net income attributable to shareholders of $7 million, reflecting the financial strain of these one-time costs.

Rising Supply Chain Costs

Rising supply chain costs, driven by the anti-involution campaign in China, along with tariffs and duties, are expected to increase unit costs in the second half of the year. This presents a significant challenge for Canadian Solar as it navigates these external economic pressures.

Forward-Looking Guidance

Looking ahead, Canadian Solar forecasts module volumes between 5 to 5.3 gigawatts and energy storage shipments between 2.1 to 2.3 gigawatt hours for the third quarter of 2025. The company expects revenue to range from $1.3 to $1.5 billion, with gross margins between 14 to 16%. For the full year, they have narrowed their module volume guidance to 25 to 27 gigawatts and revised their revenue guidance to between $5.65 and $6.3 billion.

In conclusion, Canadian Solar’s earnings call reflected a balanced sentiment with notable achievements in module shipments and sustainability, countered by challenges such as storage shipment delays and rising supply chain costs. The company’s forward-looking guidance suggests cautious optimism as it navigates these hurdles while maintaining its commitment to sustainability and operational excellence.