CSIQ - Earnings call 3 2023 | Canadian Solar Inc.

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to Canadian Solar's Third Quarter 2023 Earnings Conference Call. My name is Shamali, and I will be your operator for today. At this time, all participants are on listen-only mode. Later, we will conduct a question-and-answer session.

conference recorded this replay reminder, a is for being purposes. As the now at to like would call Canadian to Director I Relations turn over Investor Isabel Solar. Zhang, go Please ahead.

Isabel Zhang

Quarter welcome, conference and today's is Presentations the Solar's accompanied are Canadian Thank Investor note that call everyone, slides section. on operator, Call. Please and Solar's you, Events Third available XXXX with Relations Conference that within to Canadian website

subsidiary, call, of CSI Shawn Qu, Dr. [indiscernible] go Chairman messages will the CEO; after questions. remarks. go Canadian Joining Solar's VP today executives management's will outlook, President for majority-owned over and Zhuang review CEO after Senior Ismael are this have and formal Dr. Chang, owned Canadian us which the and session we Solar's also financial for Energy, will Shawn Energy.All Guerrero, remarks Solar conclude Solar, formerly for Recurrent VP Yan business On Huifeng respectively, coming and in will CFO; business key CSI Energy, participate will the wholly the Q&A highlights Yan Zhuang, and time prepared quarter. with will Global with subsidiary Corporate through results. Recurrent the some and Shawn

future are would that we regarding risks subject of as remarks today in to their Solar the listeners and by remarks Before uncertainties the represent in XXXX. of generally as update I that these will statements of projections management's contained Actual of future SEC like expectations. filed statements can that as A from found Exchange risks begin, be company discussion forward-looking to on G more well the obligation contain will assumes the answers and differ Act estimates no the company's Securities otherwise Securities XX-F may Canadian current remind Regulation to for management's protection requirements law. or harbor claims principles with forward-looking annual GAAP. prepared the are company's within applicable safe required be presented the in report and accepted performance results to projections uncertainties.The Litigation Form Private under Reform detailed today. accounting Commission.Management's prepared unless of Any questions management's

not presented Some with be and viewed operating Qu. to Canadian enable a to performance certain Shawn, and now non-GAAP a and should information be to to turn during the as provide better of the in with financial on additional to please non-GAAP Dr. CEO, by underlying Chairman Solar's both information accordance substitute like information for non-GAAP investors will the By provided investors management call trends. measures basis. data I intends assess further uses establish GAAP over Non-GAAP National performance information, prepared ahead. and call And company's operational analysis disclosing goals. would to go Shawn GAAP.

Shawn Qu

Thank results everyone call our environment. We continued you, Isabel, and QX the achieved for despite solid QX X. challenging joining to turn today. a thank Slide you to Please

margin gross billion we XX.X% million of quarter, we Solar shareholders total per module and revenue shipments, During X.X the solar income net delivered share. Canadian generated in $X.XX $X.XX in to diluted net attributable gigawatts or of $XX

X. key share Slide few Let turn to a me takeaways.Please

you just TWh X well over some First, witnessed for years, to with operating capacity industry reached the finally industry worldwide worked solar only XXXX. in installed healthy, the in solar challenging total even is I cumulative environment, give the color, XX have but

incredible reach us. the XXXX.That market deployments. terawatt X the is to hours annual believe ahead also as believe BESS rapidly. that of over look ahead, on pace growing TWh cumulative first coming decade is generation As amount up the market is to track end of growth happen strongly to I is that BESS number this Adding we can of installations. our terawatt demand in I to the before global or of strong an drive this, its system market, storage it also battery decade energy hit on the

are cyclical and market supply with short-term inevitable rebalancing. constantly fluctuations demand course, Of

the truly stronger that of energy challenges And more storage and The I high the towards are with equipment change. believe current emissions solutions This the climate returns today electricity of cost higher market capital, ever due attractive de-carbonization zero competitive net even to we and economically strongly is However, fight and solar of costs the the than lower against scalable before. impactful security push in than project of and remains. before. the energy most provide a prices. ever

market For long believe we the strong. term, fundamentals very remain

Slide X. in a driver growth industry. of to Technology program key the remains the Turning and

years, this of XX major XX% total capacity the us now older improved accounts Slide to we past companies for XX% have cell is is now. a well greater technology to than cell driver less to capacity other XX% over advantage technologies. year.This by ramped over far exposure efficiencies reach commercial to and that of competitive already X. the Over big legacy next the from capacity. that turn gives have end our N-type N-type half Please expected

cell Indiana on markets, I side third of continued we are inroads. in Indiana. we including Jeffersonville major border We the a new in is are like on on make announced making point the long-term solar River between key gigawatt The Jeffersonville, the would the investment which to making U.S., us X the Ohio evaluation strategic customers is investments single the Inflation chose better recently across the premium but serve where this advanced IRA. the most content local only will and of U.S. rules or after our Act of be sites not is analysis Kentucky.We U.S. with XX and the technology, different It extensive fulfill to largest to of Reduction enable going northern also location investment, one

is modules of few the year.The We before track are cell new module a earlier complement on facility Texas, the our because start announced gigawatt gigawatt end X Mesquite solar producing Mesquite, year. excited facility will we weeks the X facility new to in which this in

everyone production. last these was I very I'm fact, pleased on fine-tuning X to In for important final see and proud team was the plants. manufacturing in there executing involved mass preparation and of working the week

also the Jeffersonville officials create and look forward We in continually with in new jobs officials as support.We we expand important the and global Mesquite local to critical them and in their communities, work thank Indiana our un-referring for these grow and platform. Texas

Thailand, facility materials new regulation. Overall, module with by ADCT the adjusting are shareholders.Please the the we Commerce. meet In deliver related solar a in and accordance in to Department the strongly addition, we Concurrently, of in gigawatt investment U.S. of responsibly of growth also requirements are will our our X ourselves complement recently us profitable ruling and announced Slide allow to U.S. adjusted new we wafer latest to to the our positioning X. turn for procurement build long-term which

held to our we Lastly, great we working and ESG efforts. In test all our this ESG to ideas group gather our in global continue across internal participation [indiscernible] Recently, ESG continue and employees process, tool. regions. talent to initial seek our greater socialize lead feedback our from our from

our next year, setting targets. our SBTI, science-based the climate focus initial to on we Over plan

serving, engagement sure safety procedures side Recurrent will inch environmental development standardizing Energy's construction greatest practices manufacturing archeological naturally our making which to health environmental community includes and and and of be and has policies, impact, of We biodiversity, the focused its the just we expanding also the across ESG all enhanced levels business, so efforts our strictest company. on. ESG Historically, the are cover we but of have that on mostly activities.This every

to recently ESG, Reflecting to continued Canadian will that, turn will leadership year. improvement. are call year more we global business. the their to the the of Solar ESG work improvement enhanced me reporting in environmental Yan, for provide our and our disclosures We seek on finance.Congratulations let hard received and continue by efforts details on to Yan, teams global sustainability CSI committed the please work. execution who ahead. strategy go our over Solar every With award

Yan Zhuang

price. Thanks, basis Gross Slide solar points $X.X last division X.X noted costs Shawn In shipments gigawatts revenues. Please quarter delivered in driven This and million solar than intended $XX been was warehouses modules as markets. a certain turn XX.X%. module the by net was Shawn. lower margin the write-down, have in for solar specifically of generation was partially margin modules in a for included offset to higher which distributed billion X. also manufacturing vertical higher and write-down, Without integration. XX.X%, would XXX CSI CSI It gross level inventory earlier, by QX, lower Solar

seeing. Let update give now Please turn drivers market the an X. we're dynamics Slide to key me and on you

First, in capacity. gigawatts we QX, of cell TOPCon added XX

by We XXXX. gigawatts to end add the XX expect of another

vertical As improve expansion integration meaningfully we will previously, explained margins. and us help our enhance our structural this

also industry.We competitive the in believers years. ability earlier, the in As its n-type believe is our change few technology Shawn big technology to and that mentioned drive most we next for TOPCon are

lines fact, past the surprised technology we us over few pleasantly more since months. TOPCon In has been have adding

the example, X.X efficiency For We're TOPCon than we'll confident exceed of reached is sales points produced has our of XX% conversion nearly the next mass an percentage that average PERC. which XX.XX%, now higher trifold of year.

our to below supply well where wafer. highlight of well.Second, U.S. theoretical across look the limit want for will time expansion implications will increase we region. chain capacity capacity our our still which Thailand, XX.X%. currently in is as is over at capacity And number our the the and that However, let's believe modules increase to likely with investing we to TOPCon, share this by from market investments. the sales We meaningfully U.S. are I

any we the XX growth as on materials production average obviously on U.S. new expect Vietnam. Thailand. in the certain of as circumstances on have make supported X not own we gigawatts few Thailand.We March to policy the capacity for to to [indiscernible] as major in changed ADC been we next we be uncertain in market, capacity next year, over set ruling meet And the a past of environment, significant U.S. Department by have solar our the local our years, Commerce the months. intend the of did investments due the requirements by well the X new deliver of shipping combination the X.X rule our of for And in internal Over to past year, U.S. around up also of in newest out XXX% in module have

about make comments the few shipments also our me to a Let U.S.

of small of of been to LPA. XXXX, inspection first X the false for imported quarters the As as few a Canadian of detained modules we Friday. U.S.Over approximately approximately was total This our into is UF megawatts Thailand gigawatts last under the In brought only weeks, information manufactured past the sampling a XXX solar X has certain in attention. fraction to of the containers recently amounting about Solar

have we the we provide comprehensive do In in not of as the fully protocols detailed LPA, importantly, follows Canadian and strictly or CPP rigorous this other the to tolerate place. procedures with scope and ESG is forced U.S. the we of feasibility modern to believe solar ESG More Moreover, XXXX, we is XXX programs any are slavery. our audits.We labor that industry. in auditing detente most information outside merchandise cooperating ESG one of believe form supplier conducted effect

XX. Slide e-storage. to our turn continued in progress like Lastly, to I would highlight

has Our we weeks. has June business speak, signed approximately X storage which of year, utility and few market. team as us lithium backlog to to busy contributor million we announce solutions approximately this execute XXXX. $XXX able costs differentiated to with and with which we contracts that find profits I'm to built technical been prices, closing contracts projects.As alongside proud revenues expect expect storage a our we increased bigger our our CSI customers.The team since in the solve whereas of our next to strong of transactions, expected problems the gigawatt our on year, are fixed of to our to prices. declining over been carbonate some in delivered e-storage the billion. customers complex decline Their around multiple contracts, of to half more have most that equivalent deliver has a scale has e-storage be notably, profitability Of allowed solar Hence, very and much XX for improving have this, next repeat are total in the is customers ability new $X.X global to hours contracted is most be have in also teams to X.X

hand to me Ismael global ahead. Energy, business. Ismael, provide overview go Recurrent Solar's Canadian over Now development please project of an let to

Ismael Guerrero

monetize we an sequentially margin QX, few a XX.X% Please Thank with in only Energy gross we XX. turn QX million gross you, and Yan. to from revenue margin. In Taiwan. XX-megawatt projects profitable Japan standpoint as Slide was lower to still quarter a expected delivered be in project $XX but Recurrent for smaller a a in

recurring we now I both executing we grow However, finance projects financing, in and recently, towards of U.S. the emphasizing QX, tax our project generate equity our of are operating nearly to resources are started base as [indiscernible] have of megawatts closed assets earnings.In shifting more now as intend that under construction. XXX including and

these hold to term. expect projects We longer

We construction by under under to we close in third XXX lucrative financing to of construction and also place. a in PPAs end the plan close one the with to XXX expect we Europe, In megawatts on Hence, then financing approximately U.S. starting. soon XXXX. megawatts have construction with have

of which projects gigawatts term.All XXX intend Over our strategy. next COD of the means to the of and are hours storage on hold of megawatt projects, megawatts to start around of solar year, this long XXX executing course expect X.X approximately we we we and construction of

geographically control we U.K., acquired mostly plus one allow diversified the quarter end QX.This also stable enables asset expanded the our significantly we different in We the our market O&M fully and and X O&M Over intend operations from market-leading contracted capabilities. a at gigawatts services these capacity turn the are O&M XX% will to us X world more of to the for of over assets diversified the O&M transitioning developer QX, of operator. developer contracted in by and power as Please share. and us around largest at to most world. growth Slide Being or both low-risk gigawatts of to X maintenance, pure a of us storage of top this to the only. the of optimize for from and deliver to global O&M customer being team adverses In providers retain assets better and XX. operators understand last the in owner brought We've and revenues time, end solar in significantly expanding performance assets a locations are to

of As pipeline gigawatt gigawatts solar storage and total development of XX, September our XX to XX for battery grew projects. hours

focusing While projects, more persistently opportunities. developing origination executing returns, has late-stage high we we generating environment interest also our are proactively challenging. The rate new resources are made on high

trackers takers Technology long-term lower interconnection strong for prices the of the hours delays to storage interconnection gigawatts in has offset improvements well us TOPCon However, significant but the the sign degradation.And in as as off other effects, decline and equipment. helping these main as higher constraints cost of interconnections and that business solar Securing ever, reduced helped improved XX and lower steel for continue approximately gigawatt visibility. from including our PPLs. renewable efficiency very of assets as today, interest having secured XX decrease have us give remain such good pieces system costs the also our through of be lucrative module the lithium as solar cost has and of also project economics and growth

ability from the apply and being project others. best a to one learned key of our lessons of developer is global practices to advantages region One

the the of in only For these where storage and developed energy across significant example, we for completed market In one are leaders now markets, are U.S., significant projects.We player Latin we development gigawatt applying storage that experience X are we and track of a Japan opportunities Europe, America. in valuable world, off in of areas advantage us as that hours takers with we bets storage seeking being pursue value. record in development. the who in This give the parts of provide most earliest a us significant Similarly, when take signing few countries. competitive renewable of a will credibility profitable developers streamlined are significant and can different with opportunities the process global projects create that lends PPAs different to the advantage and long-term one

contracts signing advantage. the We to have been this same global jurisdictions very customers, in with different thanks successful in

go detail. ahead. Now let to go Huifeng, will me over please hand in our more results financial who Huifeng, through

Huifeng Chang

XX. from XX.X%, in to quarter. This revenues, a relative X% QX driven quarter billion sequentially Thank you, in net decrease In segment, Ismael. selling a sales and $X.XX to down in we QX project and XX% year-over-year. sequential project lower in Gross of Please decrease module lower sequential decline contribution by The turn Slide Energy QX, price. delivered a the driven which XXXX. large margin monetized the in by XX.X% average was a mainly from the prior was high-margin second Recurrent was

improved to relative the On CSI Solar margins to costs decline faster in a side, due ASPs.

write-off, write-down, incurred diluted modules XXXX, to Total income total dollar RMB. intended income Selling unit to of EPS Canadian General higher $XX by relative the gross at losses Solar to expenses The quarter interest $XX million XX% not distribution in cash been XX.X%. net XX% administrative Without logistics compared million, mainly CSI $XX in balance the by markets. costs. weaker U.S. margin warehouses in on expense TOPCon which $XX due declined the compensation related sequentially This and share-based or the specifically a inventory was for proceeds in was for during factors, driven million by QX development from was and of reoccur and was the euro R&D. $XX a as were distributed would down partially Solar net This ramp-up QX the has of by spending certain offset driven the in loss storage up the million quarter. attributable X%. the mainly CSI, addition, gain $XX Overall $XX IPO, driven higher quarter generation so net the QX higher have of sequentially, In prior a sequentially costs QX. and Solar to operating the increased by in from Net foreign with IPO in second did been quarter was not million, from higher other to TOPCon a XX% increased CSI income and expense expenses a expenses million hedging interest including spent million exchange yet. from $X.XX. and derivative shareholders cost.Research

the please $XXX generated approximately the in CapEx. and XX. to million million coming $XXX cash we sheet, Now balance flow operating Slide and QX, In to cash in invested

that reduced year a This billion. to approximately budget CapEx. QX $X.X full is in have CapEx means will significant XXXX increase Our slightly

CapEx next While this sales year's the not plan, up to number level. we we slightly be year's higher off net firm from expect from CapEx

with a net $X we quarter [indiscernible] last EBITDA, was balance higher the So third measured than leverage to X.Xx, quarter. excluding debt total cash ended as in healthy billion.Our of cash at slightly

programs financing Our now around Europe in other Japan, X a month we which include issued in bars, ago. one green closed the and latter,

turn go let will to ahead. and please conclude business the me who call outlook. now So Shawn, Shawn, our guidance back with the

Shawn Qu

Thanks, Huifeng.

Let's turn XX. to Slide

the module be is between of the $X.X we and revenue the to expected gross Solar in XX expected by a recognized point hours which by shipment to grow the storage to total X.X fourth solar expect projects. to of billion quarter year megawatt in total of XXX to margin X.X expected as billion, expect the are to to shipment XX% of to be XXXX, of view, shipments to to megawatts to gigawatts, Recurrent in in X.X full be gigawatts. $X.X For fourth early to of be Solar of battery we module the CSI range solar quarter.For to XXXX. gigawatt revenue the CSI scale XX% e-storage in utility hours, Total From range be approximately approximately range XXXX, XX Energy including X.X% we are financial XX expect range

gigawatts respectively. hours. shipments of to range X.X hours gigawatts X grow approximately storage total range to expect gigawatt the of to battery recurrent storage -- numbers to projects, We of solar shipment energy of These include internal and X the X.X to energy

always gives While is growth.The past, market which e major a competitive storage, profitability. more challenges furthest and key time competition hold the us long-term of probably than improving well business units Solar growing industry overall, drive tough strong in through Canadian so businesses provision includes our advantage. will segments and This one and is with to our is today across execute this the in positioned near-term the

like leadership triple scale energy that, for We we energy the market. share of our expect position additional I to With to than market strengthen more as in gaining would XXXX, further our floor global utility to open in now shipment storage expect questions. the Operator? solution storage

Operator

be comes Thank the question of a with Instructions] Oppenheimer, Colin your conducting question. you. line At question-and-answer this please session. Our proceed first [Operator time, we from Rusch with will

Colin Rusch

the own a and industry I the what's trying Shawn, some really visibility an in with little your business inventory. you've grown times a been into sell-through gone as on overall seeing are channel distributor Can And some know to through customers, number what you're talk both both expectation going level, as through also but get around inventory of that cycles particularly with a about in you it's distribution from folks Europe? bit cycles. and down well in these cycle as your

Shawn Qu

better As the through you data, time. past gone industry cycles this quite much I actually, one, time bigger. in number Solar tough cash, is uncertainty this said, And sufficient years cash. Canadian XX industry. other feel much lot or a with like actually, uncertain sitting setting in have than because, That's I the also many here, of And solar

to worry liquidity all. So at don't about I have

said, use, accounts distribution said, [indiscernible], people do the you on the all inventory market. much are take maybe think question, How And don't actually, you? just distribution see said, through the circular distributor he in how to I who that in XX% to total sales much see I think in affect Shawn. and do some last Then don't in will maybe I of gigawatt, I the Europe those Europe? XX talking don't in you actually, inventory.The I sell channel don't customer well, now inventory you about less. internet no, market.For received much the market, this I is market, it a our this know China quarter, European about week, asked But smaller. will as seems #X gigawatt the look, question example, asking, in channel. market your see market, long inventories certainly is are him some the in X but you answer And some but where information of solar And he the not know, those there it for Now XX%, inventory. inventory XX read I inventories know. at Actually, maybe starting, Do that? or rumors "No, I about talking scale market,

get that's the customer my or customer So week. gives just information me distribution me last of to to the

So prepared this QX feel a Yan little and to winter, more a and be X of maybe season. QX for right? I more conservative, quarter bit be also than is we feel let's quarter, because low It's

So maybe quarters X sell through. takes it to

Colin Rusch

the you is Ismael. of And on really and potential energy for new into at the interconnection to construction that little around I you're of potentially elements bit lot move solar storage prioritizing bit one the talk get through faster little and and about you a seeing which XXXX storage cadence move projects projects and into grid for a guess taking for you a Can projects before discussion energy capacity as see projects. evolving? queues There's some second these of the interconnection how

Ismael Guerrero

to that remains risk the are in we case it's is need for web the late. we're The it than the keep X, transformers, process.Otherwise, the in of the years to issue also permitting the that. finalizing deploying and green next the more term by relatively start pipeline we but of acceleration need thing executing significant you you delays for on advance, short enlarging them on going side, be saturation before main it going not but fully do the visibility be order have what only an very because and a the Look, see the sometimes storage are issue, taking good way you our In on Look to to being to expansions grid, operators. to good your before. order you X

to We are starting in coming first projects the Europe. have

interconnections starting storage are the to in receive Japan. We for first

as as to wish, is going question. happen. it's I it believe we we not probably to but answered fast I So the starting hope accelerate

Operator

from Shen question. with please Our the your proceed MKM, next comes Philip question of line with ROTH

Philip Shen

and question As your was around you in picture bit Shawn, a terms the Europe, wondering inventory follow-up the speak a for if of kind bigger I earlier of little to outlook guidance. could

X% XX% seems guidance grow year-over-year. QX is declining looking at you're like maybe quarter-over-quarter could a But in then strong XXXX, Your it seasonally you shipments quarter. and

and if Europe tremendous is maybe next the the QX slowdown that is recovery So a we expectation and through year? QX is for QX as get there of QX

Shawn Qu

Philip, territory. in Yan's this Hi is

So the I will ask Yan's question. to answer

Yan Zhuang

you it's already Hey like started or already QX, in started. of the destocking that actually Philip, as end Europe know

in quarters we a price that pretty over So believe with somehow already. back it's and we that coming been that channel. it X see should And we have QX, is year, by strong the presence such channel strong dramatic know, And demand should once be finished. past a reduction back coming you as

a as elastic This is price in in markets and the So we market. Europe coming we're back strong well. anticipate other

quarters, away, demand So be just but come with level. will couple It much to of going be such a may some price in is a higher back. few stimulated quarters not a right reduction, to to maybe the a going delay it's happen

as On well. utility side the

decided over So well course year, also strong. speculation come people demand over utility on EPC, back but multi-price also utility had some they the we coming we different the to some side next demand due see so the year and reduction of bottlenecks But as on down, because be. some should should on expect to interconnection equipment the

the demand next pickup anticipate half in of latest second a strong year. actually we So

Philip Shen

product for market, was Shifting megawatts Thanks Yan. U.S. pertained. the to Great. of you all remarks color the mentioned XXX in that your

for into BOM think expect expect Asia gigawatts it risk And do to in many you module And you do you be XXXX? how the detention, ahead, in shipments do you could type Southeast spread? U.S. is that new to Looking been from to entertained? the it ship what as and do relates expect obtained? the retention How the last long to of has you

Yan Zhuang

that so CPP very with has non-China both procedures. and documentation and our our silicon the we're And knowledge actually with cooperating submitting the customers. Well, feasibility through actively passed China confident from and we're

soon. So with we we're confident resolve that can we're this and them, working

For have as the in strong we next mentioned U.S. growth, year, should a Shawn has

Philip Shen

how think next in could U.S. gigawatts be share you Can the do many year? you

Yan Zhuang

as Philip, you gigawatt U.S., Well, US, not of gigawatts are X X-gigawatt are in cell solar capacity capacity, another ramping know, in we and about cell building to solar we in used solar up cell. TOPCon we X now Thailand. X have capacity TOPCon a of now And gigawatt

provide at customer. you I order most in Now are guess of built this to the U.S. serve that's moment. I to capacities information can those the

Philip Shen

your suggest of which Another be other the U.S. of question high. inflation, XX assumption the module pretty U.S. gigawatts shipments here. the that heard What overall size maybe could of base seems gigawatts I've market in XXXX? is companies Chinese XX with of market

wondering you in think I could the So was be base XXXX case? baseline your what

Yan Zhuang

is Now Kernel online. are online? [indiscernible] Thomas, Vice President, Thomas you Thomas.

Okay.

Forget it.

Okay. Next [indiscernible] time

sure we're seeing That's market strong should than estimate. So year. XX gigawatts, our of U.S. year. a anticipating growth this also much not demand about higher I'm they actually, next but be

Philip Shen

basis flat And to now be scale Utility it's big commercial I might XX% I might residential, XX%, up, not see a then be Thomas XX%, XX% to on what's might of strength? that available actually. the but think grow down market.

anticipate do where curious that you just strong growth? So

Operator

Thomas.

line now is Your live.

Unknown Executive

is Thomas, can me? you this Hi, hear

Operator

Thomas. Yes.

Unknown Executive

and end QX latest outlined, finished beginning deployment companies be distribution revival the a Shawn distribution as and seeing We ordering Yan year. always and for through XXXX. reorder to restart to channels projects are next QX QX significant also the by seeing has by the next and utility already year. of ramp-up should We're for And mid of

pretty of and are inventory some product in So strong we been has coming U.S. XXXX a deployed and customers anticipation once market. reordering in the seeing channel back the residential markets, rooftop

Operator

[Operator with your of Lee Goldman from Sachs, with Our comes Brian proceed next the please question Instructions] line question.

Brian Lee

few questions follow-ups Maybe a guidance. around to Phil's

Just trying QX. moving here to of triangulate the some pieces for

QX? maybe expect are So adjusted maybe what's CSI reference gross if for of gross other embed flat, up, segment your down? that the you're guidance, XX.X%? could margin the write-downs is or range XX% or you'd it margin us out, And and to QX in that you help anticipating CSI? for just Solar? there is it Like direction And just reported inventory what Is base the does for XX% XX.X%

Shawn Qu

not a [indiscernible] Now us he our for financial want now new ship years, would He you controller, [indiscernible] with to introduce new. to [indiscernible] person actually has I been like right? many is

Unknown Executive

Yes.

CSI primarily outlook Solar. the will be driven So by

our the is for outlook. that present So basis

the of sensitivity the of that the the have of level, reflect just our and now towards cetera. market range we et terms inventory right In guidance in terms price

Brian Lee

presume much Maybe were a CSI grow a like is we watt $X.XX growing not it Recurrent reported or this different I asking around driven light trying have QX? XXXX low are question that $X.XX in per in guidance? Or sounds be would that $X.XX XQX. significantly I to guess just is triangulate quarter imply would if in pricing, Just the per we like QX? Recurrent and follow-up going MASS inferring be so implications the in doesn't watt wrong guess, assuming pretty largely revenues to for QX the by enough. was like ASPs, Recurrent Fair you're I which in Solar way. It QX Okay. that because

Shawn Qu

Your way, the to different in whole growing want next ballpark. and currently explain developed is is estimation quarter. to Recurrent for is a much project. this I flip a shifting not We develop in from

PPA very though by holding of We project see on selling valuable points growing, after and connection too also they not going think Recurrent the very think the point not are money valuable, we before anymore.So kind We table those that think So to COD. and will been projects. are by selling this much our connection you projects are but leaving just projects, or have kind grow. we this is the value or are of

So recurrent growing. pipeline growing is I correct is that want the just because to

Brian Lee

a of on question makes this have out just maybe that I round And But quickly to line lot a follow-up Shawn, that. sense. questioning. Okay of

earlier until going the If sort of, meaningful an sound of half of back given your you're the high kind question. we're have destocking per seem teens let's doesn't maybe watt and it, around to year, XXXX, to infer what shipment what's like XX%, picture some to going big call through growth that's view exiting you ASP still it you're

'XX? So big what's picture the balance Like of of for these modestly. kind ASPs what flat view levels of down maybe your off

Shawn Qu

or guidance Hi don't yet. provide you Brian, XXXX we as ASP know, margin

numbers call. let's the May to why And some at we we or of So March time. can wait share whether don't see conference that

Brian Lee

generating to you're like? more kind year. on. free cash flow free sense well, one Okay. you big if it Understood. in a year, be ask almost reason the margin. going selling be pass what's tight is I flow a want And you're strategy not to Last of sort next holding year quasi-IPP I'll a and can CapEx target of more for your upfront average into I presumably, is assets next Recurrent you of did And Wondering, this me, for cash these is and up give would picture of, question as model. position Shawn, it ask may period go as not holding sounds period us like you

to takes sheet Just start of it kind projects of get you sense picture these and strain balance puts how does holding flow So of your a in longer? or and terms balance cash that? the

Shawn Qu

you question? Hi this Huifeng, can answer

Huifeng Chang

year on As we has into increased the partners. we model. our because financial approached of when assets, we meanwhile, are our side strategy many the dividend have home by energy been indicate leverage over holding But a Recurrent translating

and have we grow to So going partnership, assets. form all our those be manager equity forward, also for assets kind a of options

will be So stable. the future cash predictable, flow

the will transitional few only So growth, Energy.But more see we the add only some color? are Recurrent cash you flows.Hey lower assets going and more was period number quarters past revenue in forward, accelerate that explains will to do the the why Ismael, over you to the and want change really cadence to

Ismael Guerrero

Sure.

a asking things. So you're couple given of look,

hold intend for we one how asset. long The first to the was

selling. what the I heavily on think that's dependent point optimum of is

is to to as for intention sell we as if to wait holding. can But opportunities, in retain [indiscernible]. and initially, long be [indiscernible] are market So good the whenever have are don't the of our opportunities for we a portfolios there for a period bigger portion

to We are signing for years. XX PPAs XX

shift. long is intention holding get equity on we there what it to many for the the the run.And completely [indiscernible] cash to and need means the ways be get of to how perfectly assets are and So are the wise aware the think we equity, I

So I very planned, think. is well everything

Operator

, in have question. more time we And for one this

line from last the of with proceed [indiscernible], please your comes question Our question.

Unknown Analyst

know so Thanks, look But the higher I you higher higher is guess your markets, scale on guess market? slowdown to in with more much we DG how is I demand, on How utility when rates? pass focusing on good of morning, weak. utility signs residential side, trending seen at for the demand solar end have room ability PPAs? then demand rates returns And the Recurrent seeing current And are on the given you what's the there that? side, you

Shawn Qu

provide vendor colors Yan module to then more side. the invite as Ismael would colors a can add from I And So developer.

Yan Zhuang

seeing know on the discussion delays, customers scale up up and we delayed potential some is pipeline the other permitting reasons, because reasons next next get into answer huge reason is big coming one side, many those our interconnection various a customers, them as and for other demand some the is and but pricing delayed So year from of next have downtrend year we're coming demand and lot year. pipeline like the strong are utility of that a a that of with

sign. So that's a good

Shawn Qu

Ismael?

Ismael Guerrero

going on a and are The to high to on look sooner there Everybody couple will I rates is past the better right hit refinance interest assuming of or they a in that need rates the rate. the Sure, related high. for understand. don't modeling model, we we are the interest how things stay that to now, but know long at are they later, they

are right life now, a not of the it's for asset. So having hit a but you hit the

very of the While demand the by rates. is It's PPAs of still want that the we off-takers different dynamic we secure that for stay market there secure. basically PPAs, life interconnection, from the the we and are the And to a having significant of of asset the generally because reductions projects good and is the are the onetime and investment.On it's a shortage all CapEx strong on there supply delays that to because still a see of interest dominated demand. projects of they quality struggling see

tell ones. I That's all canceling now, now. can been PAs to a couple of And So ourselves the we've better right market strong. you is sign right

Operator

the we have And CEO, and for closing call back our question-and-answer to Qu, the end I'll over now Chairman reached of session. remarks. Dr. Shawn turn

Shawn Qu

Thank joining and you for us for support. continued your today

wonderful questions call, our have If thanksgiving a set holiday you Investor with your and good have please or contact would families Relations up a take to team. like any care. you Hope

Operator

time. at disconnect you and your participation. conference, This you lines concludes your today's may this Thank for

Canadian Solar (CSIQ) 14 Nov 232023 Q3 Earnings call transcript