Canadian Solar posts mixed Q2, sees softer third-quarter revenue

Canadian Solar Inc. (NASDAQ: CSIQ ) shares traded lower Thursday morning before heading up after the company reported mixed second-quarter 2026 results, with a revenue beat offset by an EPS miss and a below-consensus third-quarter sales outlook.

Revenue fell 29% year over year to $1.208 billion but beat the $1.143 billion estimate.

GAAP loss widened to $1.40 per diluted share, missing the $1.18 loss estimate.

Canadian Solar posted a net loss of $77 million, compared with net income of $7 million a year earlier.

Gross profit fell to $168 million from $505 million, while gross margin contracted to 13.9% from 29.8%.

The margin decline reflected the absence of IEEPA tariff-refund benefits recorded in the prior quarter and a U.S. project sales-type leasing benefit recognized a year earlier. • Where is CSIQ stock headed? Margins and Shipments Solar module shipments fell 60% year over year to 3.1 GW, while battery storage shipments jumped 73% to 3.7 GWh, above guidance of 2.8-3.2 GWh.

Of the battery shipments, 471 MWh went to internal projects.

Manufacturing generated $1.098 billion in revenue, with an 11.9% gross margin and a $49 million operating loss.

Recurrent Energy reported $117 million in revenue, a 30.7% gross margin, and a $19 million operating loss.

The company expects deferred project sales to close in the third quarter.

Read Also: Canadian Solar Temporary Tariff Windfall Can't Stop Massive Post-Earnings Selloff Conference Call Adds Policy, CapEx Detail e-STORAGE’s contracted backlog stood at $3.5 billion as of June 30, while U.S. module backlog exceeded 13 GWp and $4.5 billion as of Aug.

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On the earnings call, management added that the U.S. module backlog excludes potential Section 232 adjustments and could increase as customer contracts are renegotiated.

Management also said on the call that 2026 capital spending should total about $1.3 billion, weighted toward the second half of the year.

CSI Solar recorded a $41 million mark-to-market investment gain, while Recurrent Energy recognized a $24 million impairment tied to a Latin America project.

The call also revealed a 500 MW/2.5 GWh storage contract with a major U.S. utility designed to support data-center grid infrastructure and resiliency.

Separately, operating cash outflow totaled $181 million.

Cash and equivalents stood at $1.461 billion, restricted cash at $389 million, and total debt at $7.145 billion.

Q3 Outlook Trails Estimate Canadian Solar expects third-quarter revenue of $1.3 billion to $1.5 billion, below the $1.813 billion estimate, with gross margin projected at 13.5% to 15.5%.

The company expects module shipments of 3.5-3.8 GW and battery storage shipments of 3.4-3.8 GWh.

For 2026, Canadian Solar reaffirmed U.S. shipment guidance of 6.5 GW to 7.0 GW for modules and 4.5 GWh to 5.5 GWh for storage.

CSIQ Price Action: Canadian Solar shares were up 2.16% at $14.17 at the time of publication on Thursday, according to Pro data.

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