Canadian Solar 4Q23 Earnings Call Safe Harbor Statement This presentation has been prepared by the Company solely to facilitate the understanding of the Company’s business model and growth strategy. The information contained in this presentation has not been independently verified. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of ...

Canadian Solar (CSIQ) came out with a quarterly loss of $0.02 per share versus the Zacks Consensus Estimate of a loss of $0.13. This compares to earnings of $1.11 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 84.62%. A quarter ago, it was expected that this solar wafers manufacturer would post earnings of $0.91 per share when it actually produced earnings of $0.32, delivering a surprise of -64.84%.Over the last four quarters ...

[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) The company achieved record-breaking financial and operational results in 2023, highlighted by significant growth in shipments and revenue [Fourth Quarter and Full Year 2023 Highlights](index=1&type=section&id=Fourth%20Quarter%20and%20Full%20Year%202023%20Highlights) The company achieved record full-year 2023 results driven by strong module shipments and secured a key investment for its Recurrent Energy segment Full Year 2023 Performance Highlights | Metric | Value | Note | | :--- | :--- | :--- | | **Full Year Module Shipments** | 30.7 GW | Record, +45% YoY | | **Full Year Revenues** | $7.6 billion | Record | | **Full Year Net Income** | $274 million | Record | | **Full Year Diluted EPS** | $3.87 | Record | | **Q4 Module Shipments** | 8.2 GW | +26% YoY, above guidance | | **e-STORAGE Pipeline** | 63 GWh | Record, as of Jan 31, 2024 | | **e-STORAGE Contracted Backlog** | $2.6 billion | As of Jan 31, 2024 | - Secured a **$500 million investment** in its Recurrent Energy subsidiary from BlackRock, which is instrumental for its business transformation[2](index=2&type=chunk)[3](index=3&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Executives highlighted the company's strategic evolution, operational resilience, and the pivotal role of recent investments and partnerships [Executive Summary](index=1&type=section&id=Executive%20Summary) Management commentary emphasized the company's strategic transformation, technological advancements, and strong financial position despite quarterly challenges - **Dr. Shawn Qu (Chairman and CEO):** Emphasized the company's evolution into a **'full stack' solar and storage business**, the swift transition to N-type TOPCon technology, the ramp-up of the Texas module factory, and the strategic partnership with BlackRock for Recurrent Energy[3](index=3&type=chunk) - **Yan Zhuang (President of CSI Solar):** Highlighted CSI Solar's resilience, **exceptional shipment growth** despite challenging market conditions, and strategic investments in vertical integration and U.S. manufacturing. e-STORAGE is projected to surpass $1 billion in revenue in 2024[3](index=3&type=chunk) - **Ismael Guerrero (CEO of Recurrent Energy):** Stated the **$500 million capital commitment from BlackRock** is instrumental to Recurrent Energy's transition from a pure developer to a developer plus long-term owner and operator, enabling a more diversified and stable revenue portfolio[3](index=3&type=chunk) - **Dr. Huifeng Chang (Senior VP and CFO):** Noted Q4 revenue of $1.7 billion and a gross margin of 12.5%. Full-year net income was a **record $274 million**, and the company ended the year with a strong cash position of $3 billion[3](index=3&type=chunk) [Financial Performance](index=1&type=section&id=Financial%20Performance) The report details the company's consolidated financial results, including a quarterly downturn but record full-year performance and balance sheet growth [Q4 & Full Year 2023 Consolidated Results](index=1&type=section&id=Q4%20%26%20Full%20Year%202023%20Consolidated%20Results) The company experienced a challenging Q4 with lower revenue and a net loss, but achieved record full-year revenue and net income for 2023 Q4 2023 Financial Performance vs. Prior Periods | Metric | Q4 2023 | Q3 2023 | Q4 2022 | Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | **Net Revenues** | $1.70B | $1.85B | $1.97B | -14% | | **Gross Profit** | $213M | $308M | $349M | -39% | | **Gross Margin** | 12.5% | 16.7% | 17.7% | -5.2 p.p. | | **Net Income (Loss)** | ($1M) | $22M | $78M | -101% | | **Diluted EPS** | ($0.02) | $0.32 | $1.11 | -102% | - The Q4 gross margin decline to **12.5%** was primarily caused by lower module ASPs and an inventory write-down, partially offset by lower manufacturing costs[6](index=6&type=chunk) - Net cash flow from operating activities was **$190 million in Q4 2023**, an increase from $158 million in Q3 2023, mainly due to reduced inventories[11](index=11&type=chunk) - Total debt increased to **$3.6 billion** as of December 31, 2023, from $3.3 billion as of September 30, 2023, to fund working capital and project development[12](index=12&type=chunk) [Financial Statements Analysis](index=15&type=section&id=Financial%20Statements%20Analysis) Analysis of financial statements reveals record 2023 revenue and net income, significant asset growth, and strong operating cash flow [Consolidated Statements of Operations](index=15&type=section&id=Consolidated%20Statements%20of%20Operations) The company's 2023 income statement shows record revenue and net income, with a significant increase in operating income year-over-year Full Year Consolidated Statement of Operations (2023 vs. 2022) | Metric (in thousands USD) | FY 2023 | FY 2022 | Change | | :--- | :--- | :--- | :--- | | **Net Revenues** | $7,613,626 | $7,468,610 | +1.9% | | **Gross Profit** | $1,279,983 | $1,263,136 | +1.3% | | **Income from Operations** | $453,320 | $356,061 | +27.3% | | **Net Income Attributable to CSI** | $274,187 | $239,968 | +14.3% | | **Diluted EPS** | $3.87 | $3.44 | +12.5% | [Consolidated Balance Sheets](index=17&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet expanded significantly in 2023, driven by growth in total assets, liabilities, and shareholders' equity Consolidated Balance Sheet Highlights (As of Dec 31) | Metric (in thousands USD) | 2023 | 2022 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $1,938,689 | $981,434 | | **Total Current Assets** | $6,095,453 | $5,644,657 | | **Property, plant and equipment, net** | $3,088,442 | $1,826,643 | | **TOTAL ASSETS** | **$11,895,760** | **$9,037,128** | | **Total Current Liabilities** | $5,864,391 | $5,258,768 | | **TOTAL LIABILITIES** | **$8,190,516** | **$6,730,434** | | **TOTAL EQUITY** | **$3,705,244** | **$2,306,694** | [Consolidated Statements of Cash Flows](index=19&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The 2023 cash flow statement reflects robust operating cash flow, high investment spending, and strong financing inflows Full Year Consolidated Statement of Cash Flows (2023 vs. 2022) | Metric (in thousands USD) | FY 2023 | FY 2022 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $684,615 | $916,631 | | **Net cash used in investing activities** | ($1,671,416) | ($630,488) | | **Net cash provided by financing activities** | $2,052,828 | $428,639 | | **Cash, cash equivalents and restricted cash at end of period** | $2,946,432 | $1,969,503 | [Segment Performance](index=2&type=section&id=Segment%20Performance) This section details the performance of the Recurrent Energy and CSI Solar segments, including strategic shifts and key operational metrics [Recurrent Energy Segment](index=2&type=section&id=Recurrent%20Energy%20Segment) The segment is transitioning to a long-term owner model, supported by a major investment and a substantial project pipeline - The business is transitioning from a pure developer to a **developer plus long-term owner/operator**, enabled by a **$500 million investment from BlackRock** for a 20% stake in the subsidiary[16](index=16&type=chunk)[18](index=18&type=chunk)[20](index=20&type=chunk) Recurrent Energy Project Pipeline (as of Jan 31, 2024) | Project Type | Under Construction | Backlog | Advanced & Early-Stage | Total Pipeline | | :--- | :--- | :--- | :--- | :--- | | **Solar (GWp)** | 1.9 | 5.5 | 19.9 | 27.3 | | **Battery Storage (GWh)** | 0.4 | 3.1 | 51.3 | 54.8 | Recurrent Energy Segment Financials (Full Year) | Metric (in thousands USD) | FY 2023 | FY 2022 | | :--- | :--- | :--- | | **Net Revenues** | $497,653 | $821,525 | | **Gross Profit** | $204,727 | $161,364 | | **Income from Operations** | $96,621 | $80,364 | | **Gross Margin** | 41.1% | 19.6% | [CSI Solar Segment](index=5&type=section&id=CSI%20Solar%20Segment) The segment achieved record module shipments and is aggressively expanding manufacturing capacity, with e-STORAGE emerging as a key growth driver - Shipped **8.2 GW of solar modules in Q4 2023**, with top five markets being China, the U.S., Brazil, Spain, and Pakistan[33](index=33&type=chunk) - The e-STORAGE business has a total project turnkey pipeline of **63 GWh** and a contracted backlog of **$2.6 billion** as of January 31, 2024[37](index=37&type=chunk)[38](index=38&type=chunk) CSI Solar Manufacturing Capacity Expansion Plan (GW) | Production Stage | Dec 2023 Actual | Dec 2024 Plan | Change | | :--- | :--- | :--- | :--- | | **Ingot** | 20.4 | 50.4 | +147% | | **Wafer** | 21.0 | 50.0 | +138% | | **Cell** | 50.0 | 55.7 | +11% | | **Module** | 57.0 | 61.0 | +7% | CSI Solar Segment Financials (Full Year) | Metric (in thousands USD) | FY 2023 | FY 2022 | | :--- | :--- | :--- | | **Net Revenues** | $7,230,550 | $6,975,612 | | **Gross Profit** | $1,109,218 | $1,150,757 | | **Income from Operations** | $456,083 | $343,798 | | **Gross Margin** | 15.3% | 16.5% | [Business Outlook](index=7&type=section&id=Business%20Outlook) The company provides its financial and operational guidance for the first quarter and the full fiscal year of 2024 [Guidance for Q1 and Full Year 2024](index=7&type=section&id=Guidance%20for%20Q1%20and%20Full%20Year%202024) The company projects a soft Q1 but maintains strong full-year 2024 guidance for revenue, module shipments, and battery storage shipments Q1 2024 Guidance | Metric | Guidance Range | | :--- | :--- | | **Total Revenue** | $1.2B - $1.4B | | **Gross Margin** | 17% - 19% | | **Total Module Shipments** | 6.1 GW - 6.4 GW | | **Total Battery Storage Shipments** | ~1 GWh | Full Year 2024 Guidance | Metric | Guidance Range | | :--- | :--- | | **Total Revenue** | $8.5B - $9.5B | | **CSI Solar Module Shipments** | 42 GW - 47 GW | | **CSI Solar Battery Storage Shipments** | 6.0 GWh - 6.5 GWh | - Management expects **accelerated growth momentum in the latter part of 2024**, driven by the clearance of channel inventory and burgeoning demand from emerging markets[48](index=48&type=chunk) [Recent Developments](index=8&type=section&id=Recent%20Developments) This section outlines key corporate events, including major financing deals, supply agreements, and strategic partnerships across business segments [Key Corporate Events](index=8&type=section&id=Key%20Corporate%20Events) The company announced significant project financings, a pivotal equity investment, and major supply agreements for both solar and storage - **Recurrent Energy:** - Announced a **$500M preferred equity investment from BlackRock** (Jan 2024)[49](index=49&type=chunk) - Secured **$160M in project financing** for the 127 MWdc Bayou Galion Solar project in Louisiana (Feb 2024)[50](index=50&type=chunk) - Closed non-recourse project financing for the 119 MW Horus Solar Project in Mexico (Feb 2024)[51](index=51&type=chunk) - Completed the sale of the 100 MW / 200 MWh Mannum battery project in South Australia (Jan 2024)[52](index=52&type=chunk) - **CSI Solar & e-STORAGE:** - Secured a framework agreement to supply **N-type TOPCon modules from its Texas factory** to Sol Systems (Mar 2024)[54](index=54&type=chunk) - e-STORAGE awarded a contract to supply **500 MW / 1,170 MWh of battery solutions** for the Coalburn 1 Project in the U.K. (Dec 2023)[56](index=56&type=chunk) - e-STORAGE selected as preferred supplier for the **240 MW / 480 MWh Summerfield battery project** in South Australia (Nov 2023)[58](index=58&type=chunk) - Awarded "**Top Brand PV Award USA 2024**" by EUPD Research (Feb 2024)[60](index=60&type=chunk)

Canadian Solar Inc. (CSIQ) is slated to report fourth-quarter and full-year 2023 results on Mar 14, before the opening bell.  In the last reported quarter, the company delivered a negative earnings surprise of 64.84%. CSIQ has a trailing four-quarter average earnings surprise of 67.89%.Factors to NoteWeak residential solar demand might have had impacted module shipment for Canadian Solar in the fourth quarter. This might have also led to lower project sales, which, along with lower module price, can be expe ...

Canadian Solar Inc. (CSIQ) recently announced that it has signed a framework agreement with Sol Systems to supply its high-efficiency N-Type TOPCon (Tunnel Oxide Passivated Contact) solar modules to the latter. These modules will be supplied from CSIQ’s Texas factory, wherein ramped-up module production started in December 2023.The agreement is expected to boost Canadian Solar’s module production and procurement in the United States.CSIQ’s Role in the ProjectPer the terms of the deal, Canadian Solar will su ...

GUELPH, ON, March 4, 2024 /PRNewswire/ -- Canadian Solar Inc. (the "Company" or "Canadian Solar") (NASDAQ: CSIQ) and Sol Systems, a leading renewable energy company based in Washington, D.C., announced today a partnership to scale new solar module production and procurement in the United States. Canadian Solar has secured a framework agreement to provide Sol Systems with a significant supply of modules from its newly ramped Texas module factory. Under the partnership, Canadian Solar will supply its latest h ...

Group 1: Project Financing and Details - Canadian Solar Inc.'s subsidiary, Recurrent Energy, secured $51 million in non-recourse project financing for the 119 MW Horus solar project in Mexico, enhancing CSIQ's presence in the solar market [1] - The financing is provided by Korea Eximbank ($43 million) and KEB Hana Bank ($8 million) [1] - The Horus project, with Recurrent Energy holding 49% ownership, began commercial operations in March 2023 and utilizes Canadian Solar's high-efficiency BiHiku bifacial modules [2] Group 2: Market Opportunities in Mexico - Mexico's solar market is expected to grow significantly, with a projected CAGR of 8.9% from 2024 to 2029, driven by increased investment and favorable government policies [3] - In Q3 2023, 12% of Canadian Solar's revenues came from Latin America, including Mexico, with 684 MWp of solar power plants operational and a project pipeline of 5,358 MWp in the region [3] Group 3: Global Solar Market Trends - The global solar market is expanding rapidly, with a projected CAGR of 28.82% from 2024 to 2029, influenced by installation activities, decreasing prices, and rising electricity costs from conventional sources [4] - Canadian Solar has a strong global presence, operating in 30 countries with over 26 manufacturing facilities across Asia and the Americas [4] Group 4: Competitor Insights - Enphase Energy has shipped over 73 million microinverters globally and has a long-term earnings growth rate of 17.3% [5] - SolarEdge shipped 12.63 GW of energy in 2023, with a long-term earnings growth rate of 14.8% and a 62.5% increase in share price over the past five years [6] - First Solar is expanding its manufacturing capacity and expects a 35.5% increase in sales for 2024 compared to 2023 [6]

Core Insights - Canadian Solar Inc. played a crucial role in powering Super Bowl LVIII, marking the first Super Bowl entirely powered by renewable energy sourced from the Arrow Canyon solar and energy storage project in Nevada [1][2] - The Arrow Canyon project, developed by EDF Renewables, utilizes over 600,000 Canadian Solar photovoltaic modules with a capacity of 275 MW, along with a battery energy storage facility [1][3] Company Overview - Canadian Solar, founded in 2001, is one of the largest solar technology and renewable energy companies globally, specializing in solar photovoltaic modules and energy storage solutions [5][6] - The company has delivered over 110 GW of solar photovoltaic modules and developed approximately 9.3 GW of solar power projects and over 3 GWh of battery storage projects since entering the project development business in 2010 [5] - Currently, Canadian Solar has around 850 MW of solar projects in operation, nearly 7.8 GW under construction or in backlog, and an additional 18.7 GW in advanced and early-stage pipeline [5] Industry Impact - The successful use of solar power at a major event like the Super Bowl highlights the viability of renewable energy sources for large-scale events and facilities, representing a significant milestone in the transition to sustainable energy [2][3] - The event showcases the effectiveness of coupling solar power with advanced storage technologies, emphasizing the potential for renewable energy to meet the demands of critical infrastructure [3]

GUELPH, ON, Feb. 27, 2024 /PRNewswire/ -- Recurrent Energy, a subsidiary of Canadian Solar Inc. (the "Company" or "Canadian Solar") (NASDAQ: CSIQ) and a global developer and owner of solar and energy storage assets, announced today that it has closed non-recourse project financing for its 119 MW Horus Solar project in the region of Aguascalientes, Mexico. Recurrent owns 49 percent of the Horus Solar project, while Korea Electric Power Corporation (KEPCO) and Sprott own 15 percent and 36 percent respectively ...

Core Insights - Canadian Solar has experienced significant growth, with revenues increasing by 475% and earnings per share by 800% since 2013, establishing itself as a major player in the solar industry [1][12] - The company is perceived as undervalued due to its association with China, despite being a Canadian corporation founded by Dr. Shawn Qu, who has spent most of his career in Canada [1][3][9] - Canadian Solar has diversified its manufacturing operations globally, including a 5 GW solar module production facility in Texas and PV cell manufacturing in Indiana, reducing its reliance on China [6][12] Company Background - Canadian Solar was founded in 2001 by Dr. Shawn Qu, who has a strong academic background in physics and material science, and has worked in Canada for most of his life [2][3] - The company went public on Nasdaq in 2006 and has since grown to become one of the tier 1 solar manufacturers globally [1][3] Manufacturing Strategy - Initially, Canadian Solar established its manufacturing base in China due to the country's large-scale solar installations and demand [4][5] - As of 2024, the company has expanded its manufacturing footprint to include over 26 facilities across Asia and the Americas, with significant production capabilities in the USA [6][12] Revenue Streams - Canadian Solar generates revenue from three main streams: solar module sales, battery storage sales, and project development through its subsidiary Recurrent Energy [8][12] - The project development business focuses on large-scale renewable energy solutions, serving utility companies and large industrial consumers [8] Valuation Metrics - Canadian Solar's current P/E ratio is around 5, significantly lower than peers like SolarEdge, which has a P/E ratio over 20 [11][22] - The price-to-book ratio for Canadian Solar is approximately 0.6, indicating it is trading at a discount compared to its book value of $38 per share [24] Recent Developments - The company has secured substantial contracts for energy storage solutions, including a 480 MWh project in Australia and a 1,170 MWh project in the UK, which are expected to enhance earnings in 2024 [13][15] - Canadian Solar's e-STORAGE division has a contracted backlog of $2.6 billion, with expectations for significant growth in utility-scale energy storage shipments [17][18] Competitive Position - Canadian Solar has been recognized with the "Top Brand PV Award USA 2024," highlighting its reputation for quality and reliability in the photovoltaic industry [16] - The company is positioned as a leading solar project developer, attracting investments from major firms like BlackRock and securing partnerships with companies such as Microsoft [13][15]