Key Highlights

  • Second quarter 2026 revenue was $1.21 billion, down 29% from a year earlier, with a $77 million net loss attributable.
  • Battery storage shipments reached 3.7 GWh, above the 2.8 to 3.2 GWh guidance, and contracted storage backlog was $3.5 billion.
  • Gross margin was 13.9% against 25.1% in the first quarter, and operating cash flow was an outflow of $180.8 million.
  • Third quarter guidance calls for revenue of $1.3 billion to $1.5 billion and a gross margin of 13.5% to 15.5%.

Canadian Solar (NASDAQ:CSIQ) shares were trading near their 52-week low at USD 9.61 on October 19, 2026, down 2.04%. The solar module, battery storage and project development company reported unaudited second quarter 2026 results on August 27, and five reputed brokers have updated their targets since then. The report pairs a quarterly loss and lower margins with higher storage shipments, an expanding US factory footprint and a resolved patent dispute.

Brokerage context

JPMorgan lowered its target to $8 from $9 on October 19 and holds an Underweight rating. UBS cut its target to $16 from $25 on October 14 while keeping a Buy rating. Between August 27 and 28, Citi lowered its target to $15 from $18, Mizuho to $17 from $18, and Wells Fargo to $17 from $18, with Neutral, Neutral and Equal Weight ratings respectively. These are the firms' own views. The shares sit above the JPMorgan target and below the other four.

Second quarter results show a loss and lower margins

For the quarter ended June 30, 2026, Canadian Solar reported net revenues of $1,207.7 million, up 12% from the first quarter and down 29% from $1,693.9 million a year earlier. Gross margin was 13.9%, against 25.1% in the first quarter and 29.8% a year earlier. The company attributed the declines mainly to the absence of IEEPA tariff refund benefits recognized in the first quarter and to normalized energy storage margins. The loss from operations was $71.1 million.

Net loss attributable to Canadian Solar was $76.9 million, or $1.40 per diluted share, compared with $32.1 million, or $0.71, in the first quarter. For the first half, net revenues were $2,285.6 million and the net loss attributable was $109.0 million, or $2.11 per share. Operating cash flow was an outflow of $180.8 million.

Storage backlog, module volumes and balance sheet

Battery storage was the stronger area. The e-STORAGE unit shipped 3.7 GWh, up 82% sequentially and ahead of its 2.8 to 3.2 GWh guidance, and contracted backlog including long-term service agreements was $3.5 billion at June 30. Module shipments were 3.1 GW, up 25% from the first quarter and down 60% from a year earlier.

Recurrent Energy, the project development arm, posted revenue of $117.3 million and an operating loss of $19.4 million. Management called the quarter light because planned project sales were deferred to the second half. The 330 MW Cobalt Solar project in California closed $695 million of project financing and tax equity in August.

Total debt, including financing liabilities, was $7.1 billion at June 30, and the company described a cash position of $1.9 billion. On August 18 it said the remaining US patent litigation brought by Maxeon had been resolved, with the infringement suit dismissed with prejudice.

Third quarter guidance and US manufacturing plans

For the third quarter of 2026, the company expects revenue of $1.3 billion to $1.5 billion, a gross margin of 13.5% to 15.5%, module shipments recognized as revenue of 3.5 GW to 3.8 GW, and storage shipments of 3.4 GWh to 3.8 GWh, based on management's current views and estimates. It also reiterated its 2026 US market guidance of 6.5 GW to 7.0 GW of modules and 4.5 GWh to 5.5 GWh of battery storage.

Phase I of the Jeffersonville, Indiana, cell factory, at 2.1 GWp, opened in July. Phase II is expected to begin trial production in the first quarter of 2027, lifting US cell capacity to 6.3 GWp, while the Mesquite, Texas, module plant is being expanded from 5 GWp to 10 GWp, with completion expected in the second half of 2026. Management expects Jeffersonville ramp-up costs to continue affecting profitability through the rest of 2026.