Episode Details

Canadian Solar (CSIQ) Q2 2026 — Q2 2026 (three months to 30 June): net revenues $1,207.7M, -28.7% YoY and +12.0% QoQ, at the high end of the $1.0-1.2BN guide; gross margin 13.9%, inside the 13-15% guide; operating expenses $239.5M against $168.5M of gross profit, so a $71.1M operating loss. Loss attributable $76.9M, -$1.40 a share. Storage shipments 3.7 GWh, +73% YoY, ahead of a 2.8-3.2 GWh guide. On the print (27 Aug) the stock gapped -3.3%, traded to $12.92 and closed +0.79% at $13.98; the NEXT session closed -6.01% at $13.14, a settled two-day reaction of -5.26%. The filed loss per share is -$1.40. The filed loss over the filed share count is -$1.13. The $18.2M in between is a paid-in-kind dividend on Recurrent Energy's redeemable preferred, and it appears on no line of the income statement, no line of the segment table and no line of the cash flow. It reconciles exactly to the filed half-year figure, it grew 45% in a year, and because it is paid in kind it compounds - $73M a year accruing ahead of the common, on an $892M equity. THE CALL: HOLD (2/5, A CHEAP ASSET BASE THAT EARNS NOTHING) — base-case value ~$12.55 vs ~$13.14 today. KEY METRICS: - CALL: HOLD 2/5, fair value $12.55 vs the $13.14 close of 28 August (-4.5%). Bear $5.24, base $13.36, bull $21.48, weighted 30/50/20. Street: 33 analysts, consensus Buy, but ONE live target - Mizuho $18.00 on 15 June, +37% above the tape and +43% above us. - THE LINE ON NO LINE: -$76.9M over 67,907,507 shares is -$1.13. The company filed -$1.40. The $18.2M residual is a paid-in-kind preferred dividend at Recurrent Energy ($12.6M a year ago, $16.1M last quarter). Q1+Q2 residuals reconcile to the filed half-year figure within $0.05M. - THE SPINE: storage shipped 3.7 GWh (+73% YoY) and billed $425.9M against $432.4M a year ago - about $115/kWh from about $202/kWh, -43% per unit. Modules did the opposite: 3.1 GW (-60%) at about $0.19/W from $0.13, +44% per unit. - THE STACK: $892M of equity against $7.1BN of debt - 11.2% of the enterprise. Book value $40.57 a share, so the tape pays 0.32x. Interest took 38% of gross profit against 9% a year ago. Q3 guide $1.3-1.5BN at 13.5-15.5% implies an operating loss at EVERY point; break-even needs a 20.2% gross margin. What to watch: UP: storage revenue per GWh printing back above ~$130/kWh; the deferred Recurrent project sales closing in H2; gross margin recovering toward the 25.1% of one quarter ago. DOWN: another quarter at ~14% gross margin; the preferred accrual growing again off a larger base; total debt drawn past $7.1BN. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.