Canadian Solar Q2 Earnings Miss Estimates, Revenues Rise Y/Y

Core Insights - Canadian Solar, Inc. (CSIQ) reported a second-quarter 2025 adjusted loss of 53 cents per share, missing the Zacks Consensus Estimate of earnings of 76 cents [1] - The company experienced a GAAP loss of 8 cents per share, a decline from the previous year's earnings of 2 cents per share [1] Revenue Performance - Canadian Solar's revenues for the quarter were $1.69 billion, falling short of the Zacks Consensus Estimate of $1.92 billion by 11.7% [2] - Year-over-year, revenues increased by 3.5% from $1.64 billion, primarily driven by higher sales of battery energy storage systems and solar modules [2] Operational Metrics - Solar module shipments totaled 7.9 gigawatts (GW), within the company's guidance of 7.5-8.0 GW, but down 4% year over year [3] Gross Margin Analysis - The gross margin was reported at 29.8%, exceeding the guided range of 23-25% and improving by 1,260 basis points year over year [4] - The increase in gross margin was attributed to the release of unrealized profit from sales-type leasing of a U.S. project, higher margin contributions from battery energy storage systems, and adjustments related to U.S. anti-dumping and countervailing duties [4] Operating Expenses - Total operating expenses reached $377.6 million, a 61.1% increase year over year, driven by impairment charges related to certain solar and storage assets [5] - Depreciation and amortization charges amounted to $145.8 million, up from $122 million in the prior year [5] Financial Position - As of June 30, 2025, Canadian Solar's cash and cash equivalents were $1.86 billion, an increase from $1.70 billion as of December 31, 2024 [6] - Long-term borrowings rose to $3.46 billion from $2.73 billion during the same period [6] Future Guidance - For Q3 2025, Canadian Solar anticipates total module shipments of 5.0-5.3 GW and battery energy storage shipments of 2.1-2.3 gigawatt-hours (GWh) [7] - Expected total revenues for Q3 are projected to be between $1.3 billion and $1.5 billion, while the Zacks Consensus Estimate stands at $1.92 billion [7] - The company forecasts a gross margin between 14% and 16% for the upcoming quarter [7] Annual Projections - For the full year 2025, Canadian Solar expects total module shipments of 25-27 GW and battery energy storage shipments of 7-9 GWh [9] - Total revenues for 2025 are projected to be between $5.6 billion and $6.3 billion, aligning with the Zacks Consensus Estimate of $6.3 billion [9]