Canadian Solar Posts Q2 Net Loss of $77M, Misses EPS by $1.29 and Issues Weak Q3 Revenue Guidance

Canadian Solar reported a net loss of $77 million for the second quarter of fiscal 2026, with GAAP EPS of -$1.40 against a consensus estimate of -$0.11, a miss of $1.29 per share. Revenue came in at $1.21 billion, beating estimates by roughly $70 million but falling 29% year-over-year as solar module shipments collapsed 60% to 3.1 gigawatts. Gross margin contracted sharply to 13.9%, down 1,590 basis points from a year earlier, while gross profit fell 67% to $168 million.

Operating cash flow was negative $181 million and the company held $1.9 billion in cash. Battery storage was a bright spot, with shipments surging 73% year-over-year to 3.7 gigawatt-hours. The company attributed the margin pressure to ramp-up costs at its new solar cell manufacturing facility in Jeffersonville, Indiana, and noted that Recurrent Energy, its project development unit, which generated $117.3 million in segment revenue, underperformed due to the deferral of planned project sales into the second half.

For the third quarter, Canadian Solar guided revenue of $1.3 billion to $1.5 billion, well below the $1.8 billion analyst consensus, with gross margin expected between 13.5% and 15.5%. Module shipments are guided to 3.5 to 3.8 gigawatts and battery storage to 3.4 to 3.8 gigawatt-hours. The company affirmed its full-year 2026 targets of 6.5 to 7.0 gigawatts of U.S. solar module shipments and 4.5 to 5.5 gigawatt-hours of U.S. battery storage.

Shares fell roughly 5% in pre-market trading on the combination of the EPS miss and the significantly below-consensus Q3 revenue outlook.