Canadian Solar Reports Third Quarter 2024 Results
KITCHENER, ON, Dec. 5, 2024 /PRNewswire/ -- Canadian Solar Inc. ("Canadian Solar" or the "Company") (NASDAQ: CSIQ) today announced financial results for the third quarter ended September 30, 2024.
Highlights
-- 16.4% gross margin, above guidance of 14% to 16%.
-- Grew e-STORAGE contracted backlog to record $3.2 billion, as of November
30, 2024.
-- Achieved final closing of BlackRock's $500 million investment in
Recurrent Energy.
Dr. Shawn Qu, Chairman and CEO, commented, "The solar industry faces significant external and internal challenges. While we have achieved relatively strong results, the outlook remains complex. We are currently operating at an optimal scale with industry-leading technologies, and we remain committed to investing in R&D to ensure that we remain at the forefront of innovation across our portfolio of products and solutions. Our early-mover advantage, advanced manufacturing capabilities, and robust international sales network position us for continued growth in the rapidly expanding energy storage sector. In today's market, where trust is often in short supply, we are proud to be named the world's most trustworthy company in the energy and utilities sector on Newsweek's 'World's Most Trustworthy Companies 2024' list--a testament to our commitment to transparency, sustainability, and high-quality service across our global operations."
Yan Zhuang, President of Canadian Solar's subsidiary CSI Solar, said, "This quarter, CSI Solar posted stable performance, sustaining profitability while growing shipment volumes. We maintained a disciplined approach to order management, delivering over 30% of module volumes to the North American market. In energy storage, e-STORAGE recorded robust growth, reaching a record 4.4 GWh in shipments over the first three quarters of the year. At the same time, we are solidifying our market presence in established regions such as the U.S., Canada, and the UK, while expanding into emerging markets, exemplified by our inaugural project contract in Chile."
Ismael Guerrero, CEO of Canadian Solar's subsidiary Recurrent Energy, said, "We closed the $500 million BlackRock investment, which strengthens our balance sheet and supports our strategic transition towards a partial IPP business model. During the third quarter, we signed a record number of long-term PPAs in a single quarter of 540 MWp of solar and 600 MWh of storage. While we have experienced permitting and interconnection delays in certain European and North American markets, we continue to proactively manage these risks and remain focused on laying the foundation for long-term value. Currently, Recurrent Energy has a record number of projects in construction, including 1.6 GWp of solar and 1.8 GWh of battery energy storage capacity."
Xinbo Zhu, Senior VP and CFO, added, "In the third quarter, Canadian Solar generated $1.5 billion in net revenues, with a gross margin of 16.4%, and reported a net loss of $14 million. Recurrent Energy's relatively reduced project sales and delayed monetization of IPP projects combined with the impact of intra-group transactions will have an ongoing impact on Canadian Solar's P&L. We ended the quarter with a strong cash position of $2.8 billion, which we will strategically deploy to support our long-term growth plans and strengthen our financial position, as we continue to navigate industry challenges."
Third Quarter 2024 Results
Total module shipments recognized as revenues in the third quarter of 2024 were 8.4 GW, up 2% quarter-over-quarter ("qoq") and 1% year-over-year ("yoy"). Of the total, 31 MW were shipped to the Company's own utility-scale solar power projects.
Net revenues in the third quarter of 2024 decreased 8% qoq and 18% yoy to $1.5 billion. The sequential decrease primarily reflects lower third party battery energy storage solutions sales, a decline in average selling price ("ASP") and lower project sales, partially offset by higher solar module shipment volume. The yoy decrease primarily reflects a decline in module ASPs and lower project sales, partially offset by higher battery energy storage solutions sales and higher solar module shipment volume.
Gross profit in the third quarter of 2024 was $247 million, down 12% qoq and 20% yoy. Gross margin in the third quarter of 2024 was 16.4%, compared to 17.2% in the second quarter of 2024 and 16.7% in the third quarter of 2023. The gross margin sequential decrease was primarily caused by lesser margin contribution from third party battery energy storage solutions sales and lower module ASPs. The yoy decrease in gross margin was primarily driven by lower module ASPs, partially offset by lower manufacturing costs and higher margin contribution from battery energy storage solutions sales.
Total operating expenses in the third quarter of 2024 were $247 million, compared to $234 million in the second quarter of 2024 and $225 million in the third quarter of 2023. The sequential and yoy increases were primarily driven by higher shipping and handling expenses.
Depreciation and amortization charges in the third quarter of 2024 were $134 million, compared to $122 million in the second quarter of 2024 and $76 million in the third quarter of 2023. The sequential and yoy increases were primarily driven by the payment of vertical integration investments made by the Company over the past two years and incremental capacity in key strategic markets.
Net interest expense in the third quarter of 2024 was $20 million, compared to $19 million in the second quarter of 2024 and $11 million in the third quarter of 2023.
Net foreign exchange and derivative loss in the third quarter of 2024 was $4 million, compared to a net gain of $13 million in the second quarter of 2024 and a net loss of $17 million in the third quarter of 2023.
Net loss attributable to Canadian Solar in the third quarter of 2024 was $14 million, or $0.31 per diluted share, compared to a net income of $4 million, or $0.02 per diluted share, in the second quarter of 2024, and net income of $22 million, or $0.32 per diluted share, in the third quarter of 2023. Basic and diluted earnings (loss) per share ("EPS") includes Recurrent Energy redeemable preferred shares dividends payable in kind. As a result, an EPS effect of 10 cents was deducted in the third quarter of 2024 on a dilutive basis.
Net cash flow used in operating activities in the third quarter of 2024 was $231 million, compared to net cash flow used in operating activities of $429 million in the second quarter of 2024 and net cash flow provided by operating activities of $158 million in the third quarter of 2023. The operating cash outflow primarily resulted from increased project assets and lowered short-term notes payable.
Total debt was $5.4 billion as of September 30, 2024, including $2.5 billion, $2.7 billion, and $0.2 billion related to CSI Solar, Recurrent Energy, and convertible notes, respectively. Total debt increased as compared to $4.2 billion as of June 30, 2024, mainly driven by new borrowings for capacity investment, working capital, and development of projects and operational assets.
Business Segments
The Company has two business segments: Recurrent Energy and CSI Solar. The two businesses operate as follows:
-- Recurrent Energy is one of the world's largest clean energy project
development platforms with 15 years of experience, having delivered
approximately 11 GWp of solar power projects and 3.7 GWh of battery
energy storage projects. It is vertically integrated and has strong
expertise in greenfield origination, development, financing, execution,
operations and maintenance, and asset management.
-- CSI Solar consists of solar module and battery energy storage
manufacturing, and delivery of total system solutions, including
inverters, solar system kits, and EPC (engineering, procurement, and
construction) services. CSI Solar's e-STORAGE branded battery energy
storage business includes its utility-scale turnkey battery energy
system solutions, as well as a small but growing residential battery
energy storage business. These battery energy storage system solutions
are complemented with long-term service agreements, including future
battery capacity augmentation services.
Recurrent Energy Segment
As of September 30, 2024, the Company held a leading position with a total global solar development pipeline of 26 GWp and a battery energy storage development pipeline of 66 GWh.
While Recurrent Energy's business model was historically predominantly develop-to-sell, the Company has been adjusting its strategy to create greater asset value and retain greater ownership of projects in select markets to increase revenues generated through recurring income, such as power sales, operations and maintenance, and asset management income.
The business model consists of three key drivers:
-- Electricity revenue from operating portfolio to drive stable,
diversified cash flows in growth markets with stable currencies;
-- Asset sales (solar power and battery energy storage) in the rest of the
world to drive cash-efficient growth model, as value from project sales
will help fund growth in operating assets in stable currency markets;
and
-- Power services (O&M) and asset management through long-term operations
and maintenance ("O&M") contracts, currently with approximately 12 GW of
contracted projects, to drive stable and long-term recurring earnings
and synergies with the project development platform.
In October 2024, the Company announced it had achieved the final closing of a $500 million investment in Recurrent Energy by BlackRock through a fund management by BlackRock's Climate Infrastructure business. The transaction, announced in January 2024, had been completed following the receipt of the second and final payment. The first payment took place in June 2024. As agreed between the parties, BlackRock's total investment has reached $500 million, representing 20% of the outstanding fully diluted shares of Recurrent Energy on an as-converted basis. Canadian Solar will continue to own the remaining majority shares of Recurrent Energy.
This milestone enables Recurrent Energy to advance investment in its high value project development portfolio, supporting its strategic transition from a pure developer to a developer plus long-term owner and operator in select markets including the U.S. and Europe. This transition will allow Recurrent Energy to generate more stable long-term revenue in low-risk currencies and capture greater value from its diversified global project development pipeline.
Project Development Pipeline - Solar
As of September 30, 2024, Recurrent Energy's total solar project development pipeline was 26.4 GWp, including 1.7 GWp under construction, 4.8 GWp of backlog, and 19.9 GWp of projects in advanced and early-stage pipelines, defined as follows:
-- Backlog projects are late-stage projects that have passed their risk
cliff date and are expected to start construction in the next 1-4 years.
A project's risk cliff date is the date on which the project passes the
last high-risk development stage and varies depending on the country
where it is located. This is usually after the projects have received
all the required environmental and regulatory approvals, and entered
into interconnection agreements, feed-in tariff ("FIT") arrangements,
and power purchase agreements ("PPAs"). A significant majority of
backlog projects are contracted (i.e., have secured a PPA or FIT), and
the remaining have a reasonable assurance of securing PPAs.
-- Advanced pipeline projects are mid-stage projects that have secured or
have more than 90% certainty of securing an interconnection agreement.
-- Early-stage pipeline projects are early-stage projects controlled by
Recurrent Energy that are in the process of securing interconnection.
While the magnitude of the Company's project development pipeline is an important indicator of potential expanded power generation and battery energy storage capacity as well as potential future revenue growth, the development of projects in its pipeline is inherently uncertain. If the Company does not successfully complete the pipeline projects in a timely manner, it may not realize the anticipated benefits of the projects to the extent anticipated, which could adversely affect its business, financial condition, or results of operations. In addition, the Company's guidance and estimates for its future operating and financial results assume the completion of certain solar projects and battery energy storage projects that are in its pipeline. If the Company is unable to execute on its actionable pipeline, it may miss its guidance, which could adversely affect the market price of its common shares and its business, financial condition, or results of operations.
The following table presents Recurrent Energy's total solar project development pipeline.
Solar Project Development Pipeline (as of September 30, 2024) - MWp*
Region In Backlog Advanced Early-Stage Total
Construction Pipeline Pipeline
North America 127 329 1,139 3,811 5,406
Europe, the Middle East, and Africa 977** 2,248 1,486 5,045 9,756
("EMEA")
Latin America 451** 860 4,979 6,290
Asia Pacific excluding China and Japan - 173 708 1,257 2,138
China 100 1,100** 1,360 2,560
Japan 32 81 80 46 239
Total 1,687 4,791 3,413 16,498 26,389
*All numbers are gross MWp.
**Including 73 MWp in construction and 551 MWp in backlog that are owned by or already sold to third parties.
Project Development Pipeline - Battery Energy Storage
As of September 30, 2024, Recurrent Energy's total battery energy storage project development pipeline was 66.1 GWh, including 9.8 GWh under construction and in backlog, and 56.3 GWh of projects in advanced and early-stage pipelines.
The table below sets forth Recurrent Energy's total battery energy storage project development pipeline.
Battery Energy Storage
Project Development Pipeline (as of September 30, 2024) - MWh
Region In Backlog Advanced Early-
Stage Total
Construction Pipeline Pipeline
North America 1,400 200 1,580 16,644 19,824
EMEA 3,234 2,975 26,510 32,719
Latin America 1,765 1,765
Asia Pacific excluding China and Japan 440 780 1,580 2,800
China 2,000 4,600 6,600
Japan 727 1,071 600 2,398
Total 3,840 5,926 6,406 49,934 66,106
Projects in Operation - Solar Power and Battery Energy Storage Power Plants (Including Unconsolidated Projects)
As of September 30, 2024, the solar power and battery energy storage plants in operation totaled over 1.7 GWp and 1.0 GWh respectively, with a combined estimated net resale value of over $1.0 billion. The estimated net resale value is based on selling prices that Recurrent Energy is currently negotiating or comparable asset sales.
Power Plants in Operation*
North EMEA Latin Asia Pacific China Japan Total
America America
ex. China
and Japan
Solar (MWp) 297 62 970 6 335 62 1,732
Battery Energy 280 28 700 1,008
Storage (MWh)
*All numbers are net MWp or MWh owned by Recurrent Energy; total gross MWp of solar projects is 2,785 MWp and total gross battery
energy storage projects is 2,124 MWh, including volume that is already sold to third parties.
Operating Results
The following table presents select unaudited results of operations data of the Recurrent Energy segment for the periods indicated.
Recurrent Energy Segment Financial Results
(In Thousands of U.S. Dollars, Except Percentages)
Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30, September 30,
2024 2024 2023 2024 2023
Net revenues 45,056 50,525 63,806 135,014 443,903
Cost of revenues 30,638 26,564 46,107 83,583 260,931
Gross profit 14,418 23,961 17,699 51,431 182,972
Operating expenses 35,522 32,877 26,880 101,972 85,168
Income (loss) from (21,104) (8,916) (9,181) (50,541) 97,804
operations*
Gross margin 32.0 % 47.4 % 27.7 % 38.1 % 41.2 %
Operating margin -46.8 % -17.6 % -14.4 % -37.4 % 22.0 %
* Income (loss) from operations reflects management's allocation and estimate as some services are shared by the
Company's two business segments.
CSI Solar Segment
Solar Modules and Solar System Kits
CSI Solar shipped 8.4 GW of solar modules and solar system kits to more than 70 countries in the third quarter of 2024. For the third quarter of 2024, the top five markets ranked by shipments were the U.S., China, Pakistan, Germany, and Brazil.
CSI Solar's revised manufacturing capacity expansion targets are set forth below.
Solar Manufacturing Capacity, GW*
---
September 2024 December 2024
Actual Plan
Ingot 25.0 25.0
Wafer 31.0 31.0
Cell 48.4 48.4
Module 61.0 61.0
*Nameplate annualized capacities at said point in time. Capacity expansion plans are subject to change without notice
based on market conditions and capital allocation plans.
e-STORAGE: Battery Energy Storage Solutions
e-STORAGE is CSI Solar's utility-scale battery energy storage platform. e-STORAGE provides customers with competitive turnkey, integrated, utility-scale battery energy storage solutions, including bankable, end-to-end, utility-scale, turnkey battery energy storage system solutions across various applications. System performance is complemented with long-term service agreements, which include future battery capacity augmentation services and bring in long-term, stable income.
As of September 30, 2024, e-STORAGE had a total project turnkey pipeline of over 60 GWh, which includes both contracted and in-construction projects, as well as projects at different stages of the negotiation process. In addition, e-STORAGE had over 4.2 GWh of operating battery energy storage projects contracted under long-term service agreements, all of which were battery energy storage projects previously executed by e-STORAGE.
As of November 30, 2024, the contracted backlog, including contracted long-term service agreements, was $3.2 billion. These are signed orders with contractual obligations to customers, providing significant earnings visibility over a multi-year period.
The table below sets forth e-STORAGE's manufacturing capacity expansion targets.
Battery Energy Storage September 2024 December 2024 December 2025
Manufacturing Capacity, GWh*
Actual Plan Plan
SolBank 20.0 20.0 30.0
*Nameplate annualized capacities at said point in time. Capacity expansion plans are subject to change without notice
based on market conditions and capital allocation plans.
Operating Results
The following table presents select unaudited results of operations data of the CSI Solar segment for the periods indicated.
CSI Solar Segment Financial Results
*
(In Thousands of U.S. Dollars, Except Percentages)
Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30, September 30,
2024 2024 2023 2024 2023
Net revenues 1,716,330 1,731,470 1,805,507 4,789,953 5,529,230
Cost of revenues 1,396,246 1,441,897 1,506,334 3,932,711 4,626,609
Gross profit 320,084 289,573 299,173 857,242 902,621
Operating expenses 209,257 196,255 172,409 570,625 487,015
Income from operations 110,827 93,318 126,764 286,617 415,606
Gross margin 18.6 % 16.7 % 16.6 % 17.9 % 16.3 %
Operating margin 6.5 % 5.4 % 7.0 % 6.0 % 7.5 %
*
I
nclude
effects of both sales to
third-part
y customers
and to
the Company's Recurrent En
ergy
segment
.
Please refer to the
attached financial tables for intercompany transaction elimination information. Income from operations reflects
management's allocation and estimate as some services are shared by the Company's two business segments.
The table below provides the geographic distribution of the net revenues of CSI Solar:
CSI Solar Net Revenues Geographic Distribution* (In Millions of U.S. Dollars, Except Percentages)
Q3 2024 % of Net Q2 2024 % of Net Q3 2023 % of Net
Revenues Revenues Revenues
Americas 820 56 892 56 715 40
Asia 432 30 455 29 630 35
Europe and others 211 14 238 15 437 25
Total 1,463 100 1,585 100 1,782 100
*Excludes sales from CSI Solar to Recurrent Energy.
Business Outlook
The Company's business outlook is based on management's current views and estimates given factors such as existing market conditions, order book, production capacity, input material prices, foreign exchange fluctuations, the anticipated timing of project sales, and the global economic environment. This outlook is subject to uncertainty with respect to, among other things, customer demand, project construction and sale schedules, product sales prices and costs, supply chain constraints, and geopolitical conflicts. Management's views and estimates are subject to change without notice.
For the fourth quarter of 2024, the Company expects total revenue to be in the range of $1.5 billion to $1.7 billion. Gross margin is expected to be between 16% and 18%. Total module shipments recognized as revenues by CSI Solar are expected to be in the range of 8.0 GW to 8.5 GW, including approximately 500 MW to the Company's own projects. Total battery energy storage shipments by CSI Solar in the fourth quarter of 2024 are expected to be between 2.0 GWh to 2.4 GWh, including about 1.2 GWh to the Company's own projects.
For the full year of 2025, the Company expects total module shipments to be in the range of 30 GW to 35 GW and CSI Solar's total battery energy storage shipments in the range of 11 GWh to 13 GWh, including approximately 1 GW and 1 GWh respectively to the Company's own projects.
Dr. Shawn Qu, Chairman and CEO, commented, "We continue to adhere to our profitable growth strategy, investing strategically in high-return technologies, solutions, and markets. In the face of ongoing deglobalization trends, we continue to execute a resilient global strategy that emphasizes supply chain stability, customer-focused demand, and strong ESG commitments, all aimed at delivering sustained value across our global markets."
Recent Developments
Canadian Solar
On November 15, 2024, the Office of Governor Andy Beshear announced the largest job-creation project in Kentucky since 2022: Shelbyville Battery Manufacturing. A subsidiary of Canadian Solar's utility-scale battery energy storage platform e-STORAGE, Shelbyville Battery Manufacturing will establish a state-of-the-art 6 GWh battery cell, module, and packaging manufacturing facility. The project will be built in two phases, beginning with an initial investment of over $300 million.
On October 10, 2024, Canadian Solar announced it had been recognized as the most trustworthy company on Newsweek's World's Most Trustworthy Companies 2024 list in the Energy and Utilities sector. This ranking underscores Canadian Solar's commitment to transparency, reliability, and sustainability, and reflects its commitment to quality and customer service across the globe.
CSI Solar
On November 28, 2024, CSI Solar convened a board meeting and approved, among other matters, a share repurchase program through centralized bidding. The program aims to enhance investor confidence, optimize capital structure, and align interests of all stakeholders. This decision follows a comprehensive assessment of CSI Solar's financial position, including cash reserves, future capital requirements, business outlook, and projected profitability. Under the program, CSI Solar will repurchase between 23.3427 million and 46.6853 million shares at a price not exceeding RMB21.42 per share within 12 months following shareholders' approval at its annual general meeting.
On October 1, 2024, Canadian Solar announced it had secured a turnkey EPC contract to supply a 98 MW / 312 MWh DC Battery Energy Storage System to the Huatacondo project in Chile. The project, developed by Sojitz Corporation and Shikoku Electric Power Co., Inc. through their subsidiary AustrianSolar Chile Cuatro SpA ("ASC4"), is set to commence construction in the first quarter of 2025. e-STORAGE will provide and integrate its advanced SolBank 3.0 energy storage solution for the project. Under the EPC contract, e-STORAGE will manage all civil, mechanical, and electrical infrastructure for the project.
On September 3, 2024, Canadian Solar announced it had entered into a cradle-to-cradle U.S. recycling partnership with SOLARCYCLE, America's most advanced solar recycling company. Under the terms of the agreement, SOLARCYCLE will serve as Canadian Solar's preferred recycling partner, while Canadian Solar will act as an original equipment manufacturer partner to SOLARCYCLE, offering upfront recycling services. Canadian Solar customers can secure recycling services at the time of purchase, integrating sustainability into the lifecycle of their projects from the outset.
Recurrent Energy
On October 31, 2024, Canadian Solar announced its 134 MW (100 MWac) Liberty Solar project near Houston, Texas had reached commercial operation. Customers for the project include Autodesk, Inc., Biogen Inc., EMD Electronics (the U.S. and Canada electronics business of Merck KGaA, Darmstadt, Germany), and Wayfair Inc. Recurrent Energy plans to remain the long-term owner and operator of the project.
On October 31, 2024, Canadian Solar announced it had signed two new tolling agreements with Arizona Public Service Company. The 20-year tolling agreements encompass the 600 MWh standalone Desert Bloom Storage and 150 MWac Papago Solar projects. Both projects, located in Maricopa County, Arizona, are scheduled to start construction in 2025 and reach operation in 2026.
On October 3, 2024, Canadian Solar announced it had achieved the final closing of a $500 million investment in Recurrent Energy by BlackRock through a fund management by BlackRock's Climate Infrastructure business. The transaction, announced in January 2024, had been completed following the receipt of the second and final payment. As agreed between the parties, BlackRock's total investment had reached $500 million, representing 20% of the outstanding fully diluted shares of Recurrent Energy on an as-converted basis. Canadian Solar will continue to own the remaining majority shares of Recurrent Energy.
Conference Call Information
The Company will hold a conference call on Thursday, December 5, 2024, at 8:00 a.m. U.S. Eastern Time (9:00 p.m., Thursday, December 5, 2024, in Hong Kong) to discuss its third quarter 2024 results and business outlook. The dial-in phone number for the live audio call is +1-877-704-4453 (toll-free from the U.S.), +852 800 965 561 (from Hong Kong), +86 400 120 2840 (local dial-in from Mainland China) or +1-201-389-0920 from international locations. The conference ID is 13750071. A live webcast of the conference call will also be available on the investor relations section of Canadian Solar's website at www.canadiansolar.com.
A replay of the call will be available after the conclusion of the call until 11:00 p.m. U.S. Eastern Time on Thursday, December 19, 2024 (12:00 p.m. December 20, 2024, in Hong Kong) and can be accessed by dialing +1-844-512-2921 (toll-free from the U.S.) or +1-412-317-6671 from international locations. The replay pin number is 13750071. A webcast replay will also be available on the investor relations section of Canadian Solar's at www.canadiansolar.com.
About Canadian Solar Inc.
Canadian Solar is one of the world's largest solar technology and renewable energy companies. Founded in 2001 and headquartered in Kitchener, Ontario, the Company is a leading manufacturer of solar photovoltaic modules; provider of solar energy and battery energy storage solutions; and developer, owner, and operator of utility-scale solar power and battery energy storage projects. Over the past 23 years, Canadian Solar has successfully delivered around 142 GW of premium-quality, solar photovoltaic modules to customers across the world. Through its subsidiary e-STORAGE, Canadian Solar has shipped around 9 GWh of battery energy storage solutions to global markets as of September 30, 2024, boasting a US$3.2 billion contracted backlog as of November 30, 2024. Since entering the project development business in 2010, Canadian Solar has developed, built, and connected approximately 11 GWp of solar power projects and 3.7 GWh of battery energy storage projects globally. Its geographically diversified project development pipeline includes 26 GWp of solar and 66 GWh of battery energy storage capacity in various stages of development. Canadian Solar is one of the most bankable companies in the solar and renewable energy industry, having been publicly listed on the NASDAQ since 2006. For additional information about the Company, follow Canadian Solar on LinkedIn or visit www.canadiansolar.com.
Safe Harbor/Forward-Looking Statements
Certain statements in this press release, including those regarding the Company's expected future shipment volumes, revenues, gross margins, and project sales are forward-looking statements that involve a number of risks and uncertainties that could cause actual results to differ materially. These statements are made under the "Safe Harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by such terms as "believes," "expects," "anticipates," "intends," "estimates," the negative of these terms, or other comparable terminology. Factors that could cause actual results to differ include general business, regulatory and economic conditions and the state of the solar power and battery energy storage market and industry; geopolitical tensions and conflicts, including impasses, sanctions and export controls; volatility, uncertainty, delays and disruptions related to global pandemics; supply chain disruptions; governmental support for the deployment of solar power and battery energy storage; future available supplies of silicon, solar wafers and lithium cells; demand for end-use products by consumers and inventory levels of such products in the supply chain; changes in demand from significant customers; changes in demand from major markets such as China, the U.S., Europe, Brazil and Japan; changes in effective tax rates; changes in customer order patterns; changes in product mix; changes in corporate responsibility, especially environmental, social and governance ("ESG") requirements; capacity utilization; level of competition; pricing pressure and declines in or failure to timely adjust average selling prices; delays in new product introduction; delays in utility-scale project approval process; delays in utility-scale project construction; delays in the completion of project sales; the pipeline of projects and timelines related to them; the ability of the parties to optimize value of that pipeline; continued success in technological innovations and delivery of products with the features that customers demand; shortage in supply of materials or capacity requirements; availability of financing; exchange and inflation rate fluctuations; litigation and other risks as described in the Company's filings with the Securities and Exchange Commission, including its annual report on Form 20-F filed on April 26, 2024. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, level of activity, performance, or achievements. Investors should not place undue reliance on these forward-looking statements. All information provided in this press release is as of today's date, unless otherwise stated, and Canadian Solar undertakes no duty to update such information, except as required under applicable law.
Investor Relations Contact:
Wina Huang
Investor Relations
Canadian Solar Inc.
investor@canadiansolar.com
FINANCIAL TABLES FOLLOW
The following tables provide unaudited select financial data for the Company's CSI Solar and Recurrent Energy businesses.
Select Financial Data - CSI Solar and Recurrent
Energy
Three Months Ended and As of September 30, 2024
(In Thousands of U.S. Dollars, Except Percentages)
CSI Solar Recurrent Elimination Total
Energy and
unallocated
items (1)
Net revenues $1,716,330 $45,056 $(253,762) $1,507,624
Cost of revenues 1,396,246 30,638 (166,696) 1,260,188
Gross profit 320,084 14,418 (87,066) 247,436
Gross margin 18.6 % 32.0 % 16.4 %
Income (loss) from $110,827 $(21,104) $(89,429) $294
operations (2)
Supplementary
Information:
Interest expense (3) $(16,003) $(16,369) $(1,812) $(34,184)
Interest income (3) 11,100 2,644 1 13,745
Cash and cash equivalents $1,614,146 $529,440 $25,191 $2,168,777
Restricted cash - current and 657,707 1,310 659,017
noncurrent
Non-recourse borrowings 1,105,132 1,105,132
Other short-term and long- 2,359,838 1,281,289 3,641,127
term borrowings
Green bonds and convertible 160,846 228,540 389,386
notes
Select Financial Data - CSI Solar and Recurrent
Energy
Nine Months Ended September 30, 2024
(In Thousands of U.S. Dollars, Except Percentages)
CSI Solar Recurrent Elimination Total
Energy and
unallocated
items (1)
Net revenues $4,789,953 $135,014 $(452,799) $4,472,168
Cost of revenues 3,932,711 83,583 (326,409) 3,689,885
Gross profit 857,242 51,431 (126,390) 782,283
Gross margin 17.9 % 38.1 % 17.5 %
Income (loss) from $286,617 $(50,541) $(139,060) $97,016
operations (2)
Supplementary
Information:
Interest expense (3) $(47,636) $(45,947) $(8,490) $(102,073)
Interest income (3) 54,006 8,123 40 62,169
Select Financial Data - CSI Solar and Recurrent
Energy
Three Months Ended September 30, 2023
(In Thousands of U.S. Dollars, Except Percentages)
CSI Solar Recurrent Elimination Total
Energy and
unallocated
items (1)
Net revenues $1,805,507 $63,806 $(23,028) $1,846,285
Cost of revenues 1,506,334 46,107 (14,160) 1,538,281
Gross profit 299,173 17,699 (8,868) 308,004
Gross margin 16.6 % 27.7 % 16.7 %
Income from operations (2) $126,764 $(9,181) $(34,567) $83,016
Supplementary
Information:
Interest expense (3) $(15,139) $(13,009) $(1,801) $(29,949)
Interest income (3) 15,601 2,972 4 18,577
Select Financial Data - CSI Solar and Recurrent Energy
Nine Months Ended September 30, 2023
(In Thousands of U.S. Dollars, Except Percentages)
CSI Solar Recurrent Elimination Total
Energy and
unallocated
items (1)
Net revenues $5,529,230 $443,903 $(61,544) $5,911,589
Cost of revenues 4,626,609 260,931 (42,530) 4,845,010
Gross profit 902,621 182,972 (19,014) 1,066,579
Gross margin 16.3 % 41.2 % 18.0 %
Income from operations (2) 415,606 97,804 (60,667) 452,743
Supplementary
Information:
Interest expense (3) $(44,560) $(30,899) $(5,393) $(80,852)
Interest income (3) 29,628 6,329 32 35,989
(1) Includes inter-segment elimination, and unallocated corporate items not considered part of management's evaluation of business segment operating performance.
(2) Income (loss) from operations reflects management's allocation and estimate as some services are shared by the Company's two business segments.
(3) Represents interest expenses payable to and interest income earned from third parties.
Select Financial Data -CSI Solar and Recurrent Energy
Three Months Ended Three Months Ended Three Months Ended
September 30, June 30, September 30,
2024 2024 2023
(In Thousands of U.S. Dollars)
CSI Solar
Revenues:
Solar modules $1,217,157 $1,207,816 $1,520,716
Solar system kits 106,438 114,869 184,404
Battery energy storage solutions 95,384 225,805 19,575
EPC and others 43,589 36,418 57,784
Subtotal 1,462,568 1,584,908 1,782,479
Recurrent
Energy Revenues:
Solar power and battery energy storage asset 12,752 34,541
sales
Power services (O&M) and asset 20,698 18,644 14,374
management
Electricity revenue from operating portfolio 24,358 19,129 14,891
and others
Subtotal 45,056 50,525 63,806
Total net revenues $1,507,624 $1,635,433 $1,846,285
Select Financial Data -CSI Solar and Recurrent
Energy
Nine Months Ended Nine Months Ended
September 30, 2024 September 30, 2023
(In Thousands of U.S. Dollars)
CSI Solar
Revenues:
Solar modules $3,337,123 $4,698,279
Solar system kits 320,554 534,858
Battery energy storage solutions 572,662 49,274
EPC and others 106,815 185,275
Subtotal 4,337,154 5,467,686
Recurrent
Energy Revenues:
Solar PV and battery energy storage asset 18,796 377,649
sales
Power services (O&M) and asset 55,210 36,469
management
Electricity revenue from operating portfolio 61,008 29,785
and others
Subtotal 135,014 443,903
Total net revenues $4,472,168 $5,911,589
Canadian Solar Inc.
Unaudited Condensed Consolidated Statements of Operations
(In Thousands of U.S. Dollars, Except Share and Per Share Data)
Three Months Ended Nine Months Ended
September 30, June 30
, September 30, September 30, September 30,
2024 2024 2023 2024 2023
Net revenues $1,507,624 $1,635,433 $1,846,285 $4,472,168 $5,911,589
Cost of revenues 1,260,188 1,353,339 1,538,281 3,689,885 4,845,010
Gross
profit 247,436 282,094 308,004 782,283 1,066,579
Operating expenses:
Selling and
distribution 136,172 131,692 99,766 356,276 275,823
expenses
General and 99,989 100,911 114,033 295,593 332,252
administrative expenses
Research
and 30,459 25,578 28,897 90,316 69,341
development expenses
Other
operating
income, (19,478) (23,737) (17,708) (56,918) (63,580)
net
Total operating expenses 247,142 234,444 224,988 685,267 613,836
Income from operations 294 47,650 83,016 97,016 452,743
Other income (expenses):
Interest
expense (34,184) (33,022) (29,949) (102,073) (80,852)
Interest
income 13,745 14,122 18,577 62,169 35,989
Gain (loss)
on change
in 14,932 81 (4,291) (1,681) (20,465)
fair value of
derivatives,
net
Foreign
exchange
gain, (18,662) 12,486 (13,175) 6,737 23,497
net
Investment
income
(loss), 3,427 (835) 2,332 2,761 12,667
net
Total other expenses (20,742) (7,168) (26,506) (32,087) (29,164)
Income (loss) before (20,448) 40,482 56,510 64,929 423,579
income taxes and equity in
earnings of affiliates
Income tax (expense) benefit 19,829 (5,283) 10,583 4,869 (64,151)
Equity in earnings (losses) of (5,451) (7,775) (4,624) (12,221) 7,406
affiliates
Net income (loss) (6,070) 27,424 62,469 57,577 366,834
Less: Net income 7,956 23,602 40,578 55,429 91,261
attributable to non-
controlling interests and
redeemable non-
controlling interest
Net income (loss) $(14,026) $3,822 $21,891 $2,148 $275,573
attributable to Canadian
Solar Inc.
Earnings (loss) per share - $(0.31) $0.02 $0.33 $(0.10) $4.23
basic
Shares used in computation - 66,933,121 66,413,750 66,010,484 66,505,377 65,152,583
basic
Earnings (loss) per share - $(0.31) $0.02 $0.32 $(0.10) $3.88
diluted
Shares used in computation - 66,933,121 66,984,783 72,934,082 66,505,377 72,073,501
diluted
Canadian Solar Inc.
Unaudited Condensed Consolidated Statement of Comprehensive Income (Loss)
(In Thousands of U.S. Dollars)
Three Months Ended Nine Months Ended
September 30, June 30
, September 30, September 30, September 30,
2024 2024 2023 2024 2023
Net income (loss) $(6,070) $27,424 $62,469 $57,577 $366,834
Other comprehensive income
(loss):
Foreign currency translation 130,342 (59,897) (29,294) 16,632 (74,551)
adjustment
Gain (loss) on changes in fair (105) 769 121 1,544 (590)
value of available-for-sale debt
securities, net of tax
Gain (loss) on interest rate (8,874) (481) 1,869 (8,390) 1,697
swap, net of tax
Share of gain (loss) on changes (1,908) (159) 8,297 (933) 8,190
in fair value of derivatives of
affiliate, net of tax
Comprehensive income (loss) 113,385 (32,344) 43,462 66,430 301,580
Less: comprehensive income 12,969 15,637 44,653 48,943 73,505
attributable to non-controlling
interests and redeemable non-
controlling interest
Comprehensive income (loss) $100,416 $(47,981) $(1,191) $17,487 $228,075
attributable to Canadian Solar
Inc.
Canadian Solar Inc.
Unaudited Condensed Consolidated Balance Sheets
(In Thousands of
U.S.
Dollars)
September 30, December 31,
2024 2023
ASSETS
Current assets:
Cash and cash
equivalents $2,168,777 $1,938,689
Restricted cash 648,362 999,933
Accounts receivable
trade, net 988,610 904,943
Accounts receivable,
unbilled 127,454 101,435
Amounts due from
related parties 21,884 40,582
Inventories 1,263,919 1,179,641
Value added tax
recoverable 209,236 162,737
Advances to suppliers,
net 152,003 193,818
Derivative assets 15,145 9,282
Project assets 437,568 280,793
Prepaid expenses and
other current assets 354,254 283,600
Total current assets 6,387,212 6,095,453
Restricted cash 10,655 7,810
Property, plant and equipment, net 3,333,543 3,088,442
Solar power systems, net 1,722,149 951,513
Deferred tax assets, net 425,890 263,458
Advances to suppliers, net 97,910 132,218
Investments in affiliates 242,372 236,928
Intangible assets, net 33,286 19,727
Project assets 917,554 576,793
Right-of-use assets 325,129 237,007
Amounts due from related parties 54,135 32,313
Other non-current assets 230,153 254,098
TOTAL ASSETS $13,779,988 $11,895,760
Canadian Solar Inc.
Unaudited Condensed Consolidated Balance Sheets (Continued)
(In Thousands of
U.S.
Dollars)
September 30, December 31,
2024 2023
LIABILITIES, REDEEMABLE NON-
CONTROLLING INTEREST AND EQUITY
Current liabilities:
Short-term borrowings $2,502,586 $1,805,198
Accounts payable 957,636 813,677
Short-term notes
payable 607,923 878,285
Amounts due to related
parties 12,044 511
Other payables 1,084,022 1,359,679
Advances from customers 251,932 392,308
Derivative liabilities 4,248 6,702
Operating lease
liabilities 23,376 20,204
Other current
liabilities 574,383 587,827
Total current liabilities 6,018,150 5,864,391
Long-term borrowings 2,243,673 1,265,965
Green bonds and convertible notes 389,386 389,033
Liability for uncertain tax positions 5,847 5,701
Deferred tax liabilities 90,373 82,828
Operating lease liabilities 205,685 116,846
Other non-current liabilities 609,882 465,752
TOTAL LIABILITIES 9,562,996 8,190,516
Redeemable non-controlling interest $184,530
$ -
Equity:
Common shares 835,543 835,543
Additional paid-in
capital 587,052 292,737
Retained earnings 1,551,855 1,549,707
Accumulated other
comprehensive loss (101,489) (118,744)
Total Canadian Solar Inc. shareholders' 2,872,961 2,559,243
equity
Non-controlling interests 1,159,501 1,146,001
TOTAL EQUITY 4,032,462 3,705,244
TOTAL LIABILITIES, REDEEMABLE NON- $13,779,988 $11,895,760
CONTROLLING INTEREST AND EQUITY
Canadian Solar Inc.
Unaudited Condensed Statements of Cash Flows
(In Thousands of U.S. Dollars)
Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30, September 30,
2024 2024 2023 2024 2023
Operating Activities:
Net income (loss) $(6,070) $27,424 $62,469 $57,577 $366,834
Adjustments to reconcile net 57,395 174,201 81,295 389,946 339,667
income to net cash provided by
(used in) operating activities
Changes in operating assets (282,290) (630,963) 14,123 (1,399,313) (211,883)
and liabilities
Net cash provided by (used in) (230,965) (429,338) 157,887 (951,790) 494,618
operating activities
Investing Activities:
Purchase of property, plant and (237,365) (390,248) (305,278) (894,075) (821,375)
equipment
Purchase of solar power (247,219) (10,936) (79,527) (431,496) (225,722)
systems
Other investing activities (12,124) 2,515 (99,935) (2,777) (128,945)
Net cash used in investing (496,708) (398,669) (484,740) (1,328,348) (1,176,042)
activities
Financing Activities:
Net proceeds from sale of 200,000 297,000 497,000
subsidiary's redeemable
preferred shares
Payments for repurchase of (7,064) (70,624) (77,688)
subsidiary's ordinary shares
Net proceeds from subsidiary's - 124,252 927,897
public offering of ordinary shares
Other financing activities 1,078,357 (38,778) (24,526) 1,762,991 902,715
Net cash provided by financing 1,271,293 187,598 99,726 2,182,303 1,830,612
activities
Effect of exchange rate changes 91,933 (61,483) (29,980) (20,803) (125,659)
Net increase (decrease) in cash, 635,553 (701,892) (257,107) (118,638) 1,023,529
cash equivalents and restricted cash
Cash, cash equivalents and $2,192,241 $2,894,133 $3,250,139 $2,946,432 $1,969,503
restricted cash at the beginning
of the period
Cash, cash equivalents $2,827,794 $2,192,241 $2,993,032 $2,827,794 $2,993,032
and restricted cash at the end of the
period
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SOURCE Canadian Solar Inc.
