Canadian Solar (NASDAQ:CSIQ) executives used the company’s fourth-quarter 2025 earnings call to describe 2025 as a “challenging year” for solar, while highlighting a strategic shift toward margin protection, U.S. manufacturing expansion, and a growing energy storage business that management said is increasingly tied to data center-driven electricity demand.
2025 shipments, revenue, and profitability
Chairman and CEO Dr. Shawn Qu said Canadian Solar shipped 4.3 gigawatts (GW) of solar modules in the fourth quarter, bringing full-year module shipments to 24.3 GW. Qu said the company has “pivoted away” from the industry’s traditional focus on shipment volume amid a prolonged solar downturn, instead targeting “strategic high-value markets.” He noted that the U.S. remained a key destination, with a record 8.1 GW delivered to the United States in 2025.
Qu said total 2025 revenue was $5.6 billion, reflecting downward adjustments in solar and storage volumes and “lighter project sales” at Recurrent Energy. He added that gross margin improved 160 basis points year-over-year, driven by a higher mix of module shipments to high-value regions and a larger share of storage volumes delivered under third-party contracts. The company reported full-year operating income of $43 million, but Qu said foreign exchange losses and interest costs increased as the company raised debt to support its independent power producer build-out. Canadian Solar recorded a net loss attributable to shareholders of $104 million, or $2.50 per diluted share.
Fourth-quarter results: delays, impairments, and higher interest expense
CFO Xinbo Zhu said fourth-quarter revenue was $1.2 billion, below guidance due to delayed project sales into 2026 and lower-than-expected volumes in both solar and storage. Fourth-quarter gross margin was 10.2%, impacted by project asset impairments at Recurrent Energy and an inventory write-down in the manufacturing business.
Zhu said selling and distribution expenses fell 20% sequentially, primarily due to lower shipping costs tied to reduced shipment volumes, while general and administrative expenses decreased 8% due to cost-control measures. Net interest expense rose to $39 million, up $10 million from the prior quarter, driven by a modest rise in total debt. Net foreign exchange loss was $15 million, which Zhu attributed to a weaker U.S. dollar and a stronger Chinese renminbi.
Total net loss for the quarter was $131 million. Net loss attributable to Canadian Solar shareholders was $86 million, or $1.66 per diluted share.
U.S. manufacturing roadmap and capital investment priorities
Qu said Canadian Solar is pursuing a “returning to our home base in North America” strategy and announced in December 2025 that it formed a new U.S. manufacturing platform, CS PowerTech, to resume direct oversight of U.S. operations. Qu said CS PowerTech and its subsidiaries are 75.1% owned by Canadian Solar, and he emphasized that major decision-making and corporate activities continue in Canada, which management believes supports compliance with domestic sourcing rules.
Qu said the company’s Mesquite, Texas solar module factory has ramped to an annual production run rate exceeding 5 GW, supported by 1,500 local employees. Canadian Solar plans to double nameplate capacity to 10 GW by the end of 2026, and Qu said the expansion is expected to increase the local workforce to 1,700.
In Jeffersonville, Indiana, Qu said the company is advancing a solar cell facility using heterojunction (HJT) technology. Phase 1 is expected to have 2.1 GW of nameplate capacity, with trial production scheduled to begin “next month.” Qu said Phase 1 would be the only commercially operational HJT solar cell facility in the United States. Phase 2 would add 4.2 GW, bringing total U.S. solar cell capacity to 6.3 GW, with Phase 2 trial production expected to begin by the end of 2026. Qu referenced a recently completed $230 million convertible bond issuance as evidence of market support for the expanded solar cell plan.
While demand for U.S. storage was described as strong, Qu said Canadian Solar is delaying progress at its Shelbyville, Kentucky battery cell and BESS production facility, citing the commercial priority of expanding Southeast Asia energy storage manufacturing and advancing the Indiana solar cell project.
Energy storage momentum tied to data centers
President Colin Parkin said the company delivered 2 GWh of storage in the fourth quarter, translating to $297 million of revenue after accounting for volumes delivered to Canadian Solar’s own projects. Parkin said full-year storage shipments of 7.8 GWh represented a 19% year-over-year increase, and he pointed to a record contracted backlog of $3.6 billion as of March 13, 2026. He also said the backlog includes contracted long-term service agreements covering 29 GWh of projects.
Parkin highlighted growth opportunities tied to the “record build-out” of data centers supporting AI. He referenced a recently signed 2.5 GWh supply agreement with a “major U.S. utility,” describing it as a front-of-the-meter project supporting a hyperscale investment. In Q&A, Parkin said the company is also seeing trends for behind-the-meter and direct-connected data center solutions and is positioning its offering as a broader “total power solution,” including modeling, testing, and potentially auxiliary power equipment and partners.
Recurrent Energy: project delays and pipeline changes
Recurrent Energy President Ismael Guerrero said the company sold “a few small PV projects” in Japan during the fourth quarter, bringing full-year 2025 project sales to nearly 1 GW. He said two major project sales planned for the fourth quarter shifted into 2026, and one of those had already been sold in the first quarter.
Guerrero attributed the delays mainly to permitting delays. He said gross margin at Recurrent Energy was pressured by impairments to project assets in the pipeline and that the segment posted an operating loss of $69 million in the quarter because project sales scale was insufficient to cover operating expenses.
On impairments, Guerrero cited two main drivers: changes in legislation in certain markets and projects that became uneconomic due to interconnection costs rising sharply. In response to a question, he said the largest bulk of solar impairments was in the U.S. due to regulatory changes, with additional impacts in Italy (grid reform), as well as smaller impacts in France and Spain.
As of December 2025, Guerrero said Recurrent Energy had secured interconnections for around 7 GW of solar and 15 GWh of storage globally, excluding operating projects. After removing impaired projects, total pipeline stood at 24 GW of solar and 83 GWh of storage.
Guidance: soft first-quarter margins and a 2026 “transition year”
For the first quarter of 2026, Parkin guided to solar module shipments of 2.2–2.4 GW and storage shipments of 1.7–1.9 GWh. The company forecast total revenue of $900 million to $1.1 billion and gross margin of 13% to 15%. Parkin said margins were expected to remain soft in the first quarter due to supply chain cost increases and delayed project sales at Recurrent Energy.
For full-year 2026, management provided U.S.-focused shipment expectations, calling 2026 a “transition year” as Canadian Solar accelerates its U.S. manufacturing roadmap. The company expects to deliver 6.5–7 GW of module shipments and 4.5–5.5 GWh of storage shipments to the U.S. market. Parkin said U.S. module shipments would likely be slightly lower than 2025 due to limited supply of solar cells qualified as non-FEOC under BABA in the first half of the year, with elevated costs affecting profitability; management expects this to ease as domestic solar cell production ramps in the second and third quarters. Storage shipments are expected to be weighted toward the second half of 2026.
On capital investment, management reiterated prior guidance of roughly $1.2 billion in 2026 capex, largely directed toward U.S. manufacturing, with additional spending planned in Southeast Asia for energy storage capacity expansion.
About Canadian Solar (NASDAQ:CSIQ)
Canadian Solar Inc (NASDAQ: CSIQ) is a global renewable energy company that specializes in the design, development and manufacturing of solar photovoltaic (PV) modules and system solutions. Founded in 2001 and headquartered in Guelph, Ontario, the company has grown to become one of the world’s largest solar module suppliers. Canadian Solar offers a comprehensive portfolio of products, including mono- and multi-crystalline solar cells and modules, as well as advanced energy storage and system integration solutions tailored for residential, commercial and utility-scale applications.
In addition to manufacturing solar components, Canadian Solar provides end-to-end services encompassing project development, engineering, procurement and construction (EPC), as well as operations and maintenance.
