Canadian Solar Reports First Quarter 2021 Results

GUELPH,ON,May 20,2021 --Canadian Solar Inc.("Canadian Solar" or the "Company") (NASDAQ: CSIQ) today announced financial results for the quarter ended March 31,2021.

Highlights

Solar module shipments of 3.1 GW in the first quarter of 2021,compared to guidance of 3.0 GW to 3.2 GW.

Revenue increased 32% year-over-year ("yoy") to $1.1 billion,compared to guidance of $1.0 billion to $1.1 billion.

Gross margin of 17.9%,compared to guidance range of 16% to 18%.

Net income attributable to Canadian Solar of $23 million,or $0.36 per diluted share.

1.2 GWh of battery storage projects under construction.

Total battery storage project development pipeline nearly doubled to 17 GWh.

Strategic partnership and investment in Habitat Energy to strengthen battery storage capabilities.

Carve-out IPO of CSI Solar subsidiary remains on track.

Dr. Shawn Qu,Chairman and CEO,commented,"First quarter 2021 revenue and gross margin came in at the high-end of our guidance,as our team remained focused on achieving financial and business improvements despite the challenging market conditions. We nearly doubled our total storage project development pipeline and expect this positive momentum to continue,which should greatly enhance the value of our development pipeline. We further strengthened our competitive position with our recent strategic partnership with Habitat Energy,which will leverage our global scale and platform,while helping us improve the software capabilities of our battery storage projects. As always,Canadian Solar is at the forefront of developing and commercializing the energy innovations that matter to our customers. The latest example is the Q1 production of our first N-type heterojunction (HJT) solar cell from our newest state-of-the-art 250 MW pilot line. Our teams are rapidly improving the cell conversion efficiency of these new cells,and we expect to start delivering our first cutting-edge HJT solar modules in the third quarter this year.

"Separately,the carve-out IPO of CSI Solar remains on track. We officially submitted the listing application materials to the securities regulatory authorities in China,which are now under review per usual procedures."

Ismael Guerrero,Corporate VP and President of Canadian Solar's Global Energy subsidiary,said,"In the first quarter of 2021,we delivered approximately 500 MWp of project sales,including 61 MWp in Japan,which were acquired by Canadian Solar Infrastructure Fund,the largest listed infrastructure fund on the Tokyo Stock Exchange. We also continued to grow our solar and storage project pipelines totaling 21 GW and 17 GWh at the end of March,respectively,building one of the largest solar and storage project pipelines in the world. We are excited to report that we have established a new Brazilian Participation Fund for Infrastructure Projects (FIP-IE) and are currently executing on approximately 2 GWp of contracted solar projects in Brazil. Last month,we set up the structure of a Real Estate Investment Fund (REIF) in Italy,which will be a private investment vehicle for our Italian projects currently under development. We will continue to work on investment vehicles in our Global Energy business as we work to build and monetize value for the Company and shareholders."

Yan Zhuang,President of Canadian Solar's CSI Solar subsidiary,"The first quarter was challenging,as expected,with cost inflation driven by continued higher raw material and transportation costs,and unfavorable foreign exchange fluctuations. For instance,the price of polysilicon has tripled over the past twelve months. We were able to partially mitigate the impact by raising our module prices,which saw a near double digit percentage increase relative to the previous quarter,and prioritizing margins ahead of shipment volumes. Underlying demand for solar energy remains strong driven by ambitious public and private sector targets,yet we are seeing increasing price elasticity of demand and the prospect that certain utility scale projects may be delayed. Meanwhile,we continue to focus on developing our technology differentiation,enhancing our product offering through high value-add system solutions,and working closely with our customers and partners."

Dr. Huifeng Chang,Senior VP and CFO,added,we achieved $1.1 billion in revenue,17.9% gross margin and $23 million net income,executing to the high end of guidance. Net income increased to $0.36 per diluted share from $0.11 per diluted share in the fourth quarter of 2020,even with higher taxes and unfavorable foreign exchange conditions. We ended the first quarter with $1.5 billion in cash,allowing us to selectively build strategic stock of key materials in support of higher customer demand and lessen the impact of increasing raw material costs. We remain disciplined and will continue to invest in long-term growth opportunities,including our expanding battery storage pipeline."

First Quarter 2021 Results

Total module shipments in the firstquarter of 2021 were 3,139 MW,a 42% yoy increase and 5% quarter-over-quarter ("qoq") increase. Of the total,267 MWwas shippedto the Company's own utility-scale solar power projects.

Net revenue in the first quarter of 2021 grew by 32% yoy and 5% qoq to $1,089million.The sequential increasewas driven by higher project sales in Japan and the United States,a higher module average selling price ("ASP"),which was partially offset by lower module shipments recognized as revenues.

Gross profit in the first quarter of 2021 was $195 million,up 38% qoq but down 13% yoy.Gross margin in the first quarter of 2021 was 17.9%,compared to guidance of 16% to 18%,and 13.6% in the fourth quarter of 2020.The sequential gross margin expansion was mainly driven by an increased contribution of high margin project sales and higher module ASP,which was partially offset by higher manufacturing costs.

Total operating expenses in the first quarter of 2021 were $151million compared to$139 million in the fourthquarter of 2020.Thesequentialincrease was primarily driven by an increase in shipping and handling expenses,partially offset by a decrease in asset impairment expenses.

Non-cash depreciation and amortization charges in the first quarter of 2021 were $62million,compared to $59million in the fourthquarter of 2020,and $45 million in the first quarter of 2020.

Net foreign exchange loss in the first quarter of 2021 was $7 million,compared to a net gain of $4 million in the fourthquarter of 2020 and a net loss of $1 million in the firstquarter of 2020. The net loss was primarily driven by strength in the U.S. Dollar relative to the Japanese Yen.

Income tax expense in the first quarter of 2021 was $14 million,compared to $2 million of income tax benefit in the fourth quarter of 2020 and $29 million of income tax benefits in the first quarter of 2020.The expense was mainly driven by an increase in pre-tax income from high tax jurisdictions and certain non-deductible items.

Net income attributable to Canadian Solar in the first quarter of 2021 was $23million,or $0.36per diluted share,compared to net income of $7 million,or $0.11 per diluted share in the fourth quarter of 2020.

Net cash used by operating activities in the first quarter of 2021 was $83million,compared to $120 million provided by operating activitiesin the fourthquarter of 2020. The operating cash outflow was mainly driven by an increase in strategic inventory in key markets such as the U.S. and Europe to reduce the impact of upstream supply chain disruptions.

Total debt in the first quarter of 2021 was $2.28 billion,compared to $2.18 billion in the fourth quarter of 2020. The increase in total debt was mainly driven by increase in non-recourse debt used to finance solar power projects,which increased to $522 million in the first quarter of 2021 from $434 million in the fourth quarter of 2020.

Battery Storage Opportunities

Canadian Solar is one of the early movers in developing and supplying energy storage solutions and projects. The Company has strategically positioned itself in the battery storage market,both in solar plus battery storage,as well as in stand-alone storage opportunities. The rapid growth of the energy storage market is being driven by technology improvements,declining battery storage costs,rising penetration of renewable energy and accelerating retirements of fossil fuel capacity.

Canadian Solar has a competitive advantage given its global leadership in both module manufacturing and solar project development. Both CSI Solar and Global Energy have focused strategically on their respective energy storage businesses:

Under Global Energy,energy storage project development is now fully integrated within the main solar development teams. Given the segment's large and growing pipeline,it is positioned to capture utility-scale energy storage projects.

Under CSI Solar,the battery storage solutions' team focuses on delivering bankable,end-to-end,integrated battery storage solutions for utility scale,commercial and industrial,as well as residential applications. These systems solutions will be complemented with long term service agreements,including future battery capacity augmentation services.

While there are synergies between the project team and the solutions team,both operate independently and on different sections of the battery storage value chain. The project pipeline for each team should be assessed independently. Please refer to the Global Energy and CSI Solar sections of this document for specific pipeline figures.

Global Energy Segment

Canadian Solar has one of the world's largest and most geographically diversified utility-scale solar and energy storage project development platforms,with a strong track record of originating,developing,financing and building over 5.7 GWp of solar power plants across six continents. As one of the early movers,the Company has built a leadership position in solar as well as energy storage project development and currently has an aggregate pipeline of nearly 21 GWp and 17 GWh,respectively.

The continued pipeline expansion and strong project development track record will support Global Energy's growth in three key areas:

Project sales: The Company intends to grow its volume of project sales by a compound annual growth rate of 25% over the next five years,well ahead of global market growth rate of approximately 20% according to many research reports.

Investment vehicles: The Company intends to optimize its project monetization strategy by establishing local investment vehicles that will help maximize the value of its project assets. The Company also intends to retain minority ownership in these vehicles. By 2025,the Company intends to reach at least 1 GW of combined net ownership in solar power projects through these vehicles. This approach will help the Company build and grow a stable base of long-term cash flows from contracted electricity. The Company will be able to recycle a large portion of the capital into developing new solar projects for growth. Meanwhile,Canadian Solar expects to capture additional operational value throughout the partial ownership period,including long-term cash flows from power sales,operations and maintenance (O&M),asset management and other services (see point 3). The Company currently owns a 15% stake in the Canadian Solar Infrastructure Fund ("CSIF",TSE: 9284),the largest listed Japanese infrastructure fundon the Tokyo Stock Exchange. The Company also established the Brazilian Participation Fund for Infrastructure projects (FIP-IE). Similar project investment vehicles in certain European countries are also currently underway. Through launching these localized vehicles,Canadian Solar is building up its expertise in designing investment vehicles in local markets that will help maximize value of its project assets.

Services: Canadian Solar currently manages over 2 GW of operational projects under long-term O&M agreements,and an additional 2 GW of contracted projects that will be operated and maintained by the Company once they are placed in operation. The Company's target is to reach 11 GW of projects under O&M agreements by 2025.

Management targets to achieve the following over the next 5 years:

Global Energy Targets

2021

2022

2023

2024

2025

Annual Project Sales,GWp

1.8-2.3

2.4-2.9

3.2-3.7

3.6-4.1

4.0-4.5

Cumulative Projects Retained,MWp

~200

~400

~760

~960

~1,000

Operational O&M projects,GWp

~2.6

~4.0

~6.5

~9.2

~11.0

Total Solar Project Pipeline

As March 31,2021,the Company's total project pipeline was 20.8 GWp,including 1.8 GWp under construction,3.7 GWp of backlog,and 15.4 GWp of earlier stage pipeline. The backlog includes projects that have passed their Risk Cliff Date and are expected to be built in the next one to four years. A project's Risk Cliff Date depends on the country where the project is located and is defined as the date on which the project passes the last high-risk development stage. This is usually after the projects have received all the required environmental and regulatory approvals,interconnection agreements,feed-in tariff ("FIT") arrangements and power purchase agreements ("PPAs"). Over 90% of projects in backlog are contracted (i.e.,have secured a PPA or FIT),and the remaining are reasonably assured of securing PPAs.

The Company's pipeline includes early- to mid-stage project opportunities currently under development but that are yet to be de-risked.

The following table presents the Company's total project pipeline.

Total Project Pipeline (as of March 31,2021) – MWp

Region

In Construction

Backlog

Pipeline

Total

North America

443

744

4,758

5,945

Latin America

859*

2,098*

3,371

6,328

Europe,the Middle East and Africa ("EMEA")

-

400*

3,519

3,919

Japan

159

150

147

456

Asia Pacific excluding Japan and China

348

191

1,667

2,206

China (part of CSI Solar)

-

80

1,900

1,980

Total

1,809

3,663

15,362

20,834

*Note: Gross MWp size of projects includes 573 MWp in construction in Latin America,

and 110 MWp in backlog in EMEA,that are not owned by Canadian Solar or have been sold to third parties.

The Company has a sizable amount of premium,high FIT projects in Japan. The table below sets forth the expected COD schedule of the Company's project backlog in development and construction in Japan,as of March 31,2021:

Expected COD Schedule – MWp

2021

2022

2023 and

Thereafter

Total

44

190

74

308

Battery Storage Project Pipeline

The Global Energy segment has been actively developing utility-scale solar plus energy storage projects,as well as stand-alone battery storage projects. TheCompany found that virtually all its solar power projects under development can co-host energy storage facilities and has done so during the first quarter of 2021. This approach has helped the Company nearly double its energy storage pipeline to almost 17 GWh during the quarter. By co-hosting energy storage facilities with solar power plants on the same piece of land and using the same interconnection point,the Company expects to significantly enhance the value of its assets under development.

Over the past years,Canadian Solar has signed several new storage tolling agreements with a variety of power purchasers,including community choice aggregators,investor-owned utilities,universities,and public utility districts. The Company has also signed development services agreements to retrofit operational solar projects with battery storage,many of which were previously developed by the Company.

The table below sets forth Global Energy's storage project development backlog and pipeline.

StorageProject Development Backlog and Pipeline(as of March 31,2021) – MWh

Region

In Construction

Backlog

Pipeline

Total

North America

1,201

1,100

8,405

10,706

Latin America

-

-

3,200

3,200

Europe,the Middle East and Africa ("EMEA")

-

-

1,314

1,314

Japan

-

-

5

5

Asia Pacific excluding Japan

-

-

1,650

1,650

Total

1,201

1,100

14,574

16,875

Solar Power Plants and Battery Storage Projects in Operation

As of March31,the Company's solar power plants in operation totaled 477 MWp,with a combined estimated net resale value of approximately $420million to Canadian Solar. The estimated resale value is based on selling prices that Canadian Solar is currently negotiating or transaction prices of similar assets in the relevant markets.

The Company owned 3 MWh of battery storage projects in operation in North America.

Solar Power Plants in Operation – MWp

Latin America

Japan

Asia Pacific

ex. Japan and China

China

Total

100

14

61

302

477

Note: Gross MWp size of projects,includes 26MWp in Asia Pacific ex. Japan and China already sold to third parties. China portfolio is part of CSI Solar.

Operating Results

The following table presents unaudited select results of operations data of the Company's Global Energy segment.

Global Energy Segment Financial Results

(In Thousands of U.S. Dollars,Except Percentages and Unless Otherwise Stated)

Three Months Ended

March 31,

2021

December

31,2020

March 31,

2020*

Net revenues

471,062

372,617

242,550

Cost of revenues

358,037

340,403

153,934

Gross profit

113,025

32,214

88,616

Operating expenses

27,944

30,434

27,786

Income from operations

85,081

1,780

60,830

Gross margin

24.0%

8.6%

36.5%

Operating margin

18.1%

0.5%

25.1%

*Historical values of first quarter of 2020 have been revised to conform to current period presentation

CSI Solar Segment

CSI Solar's 2021 capacity expansion targets are detailed below. All new capacity will produce CSI Solar's next generation high-power,high-efficiency modules in the HiKu and BiHiKu product portfolios

Manufacturing Capacity,GW (period-end)

FY20

1H21 Plan

FY21 Plan

Ingot

2.1

5.1

5.1

Wafer

6.3

10.3

10.3

Cell

9.6

12.9

13.3

Module

16.1

22.2

25.7

Note: CSI Solar's capacity expansion plans are subject to change without notice based on market conditions and capital allocation plans.

Operating Results

The following table presents unaudited select results of operations data of the CSI Solar segment for the periods indicated.

CSI Solar Segment Financial Results*

(In Thousands of U.S. Dollars,

2021

December

31,

2020**

Net revenues

695,152

784,588

689,747

Cost of revenues

627,694

678,410

527,578

Gross profit

67,458

106,178

162,169

Operating expenses

120,126

103,378

77,988

Income (loss) from operations

(52,668)­

2,800

84,181

Gross margin

9.7%

13.5%

23.5%

Operating margin

-7.6%

0.4%

12.2%

* Includes effects of both sales to third party customers and to the Company's Global Energy 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.

** Historical values of first quarter of 2020 have been revised to conform with current period presentation

The table below provides the geographic distribution of the net revenue of CSI Solar:

CSI Solar Net Revenues Geographic Distribution* (In Millions of U.S. Dollars,Except Percentages)

Q1 2021

% of Net

Revenues

Q4 2020

% of Net

Revenues

Q1 2020

% of Net

Revenues

Asia

240

39

414

62

174

30

Americas

261

42

149

22

249

43

Europe and others

117

19

105

16

160

27

Total

618

100

668

100

583

100

*Excludes sales from CSI Solar to Global Energy.

CSI Solar shipped 3.1 GW of modules to more than 70countries in the firstquarter of 2021.The top five markets ranked by shipments were the U.S.,China,Brazil,Australia and Japan.

Battery Storage Solutions

The Company is one of the early movers in developing system solutions and energy storage integration services. Within CSI Solar,the battery storage solutions team delivers competitive turnkey,integrated battery storage solutions,including bankable and fully wrapped capacity and performance guarantees. These guarantees are complemented with long term operations and maintenance agreements,which include future battery capacity augmentation services and bring in longer term,stable income.

The table below sets forth CSI Solar's battery storage system integration's contracted projects and/or under construction,those in high probability forecast,and pipeline,2021.

Contracted/

In Construction

Forecast

Pipeline

Total

Storage (MWh)

861

1,400

4,842

7,103

Contracted/in construction projects are expected to be delivered within the next 12 to 18 months. Forecast projects include those that have more than 75% probability of being contracted within the next 12 months,and the remaining pipeline includes projects that have been identified but have a below 75% probability of being contracted.

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,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,and the global impact of the ongoing COVID-19 pandemic. Management's views and estimates are subject to change without notice.

For the secondquarter of 2021,the Company expects total module shipments to be in the range of 3.5 GW to 3.7 GW,including approximately 80 MW of module shipments to the Company's own projects. Total revenues are expected to be in the range of $1.4 billion to $1.5 billion. Gross margin is expected to be between 9.5% and 10.5%.

The Company reiterates full year 2021 total module shipment guidance of 18 GW to 20 GWand project sales guidance of 1.8 GW to 2.3 GW. The Company introduces 2021 total battery storage shipment guidance of 810 MWh to 860 MWh. Total revenue guidance for 2021 remains unchanged,expected to be in the range of $5.6 billion to $6.0 billion.

Dr. Shawn Qu,Chairman and CEO,commented,"Despite the market uncertainties,we still expect significant growth in solar module shipments in the second quarter,as reflected in our guidance. The updated outlook also incorporates our capacity expansion plans,as well as our efforts to protect profitability ahead of volume. Underlying demand remains strong globally across our markets,while new markets,like battery storage,are growing at an exponential rate. We will continue to invest in technology and R&D,enhance our battery storage solutions capabilities and expand our pipeline of high-quality solar and storage assets,as we further strengthen our global leadership position,and deliver long-term sustainable returns for shareholders."

Recent Developments

On May 13,Canadian Solar announced it executed a strategic partnership and investment with Habitat Energy. The partnership will allow Canadian Solar to offer enhanced technology solutions for developers and owners of battery storage assets to capture additional revenue from trading optimization,while improving grid stability and contributing to the global energy transition to a cleaner,smarter and more efficient power grid.

On April 22,Canadian Solar announced that its wholly-owned subsidiary,Recurrent Energy,commenced construction on the 100 MWac Sunflower Solar Project located in Sunflower County,Mississippi.

On April 12,Canadian Solar announced it started mass production of the high-power,high-efficiency monofacial HiKu7 and bifacial BiHiKu7 modules with power output of up to 665 W.

On April 7,Canadian Solar announced it commenced construction on four solar projects in Japan totaling 143 MWp,including the Company's flagship mega-project,the 100 MWp Azuma Kofuji project in the Fukushima Prefecture.

Conference Call Information

The Company will hold a conference call at 8:00 a.m. U.S. Eastern Daylight Time on Thursday,2021 (8:00 p.m.,Thursday,2021 in Hong Kong) to discuss its first quarter2021results and business outlook. The dial-in phone number for the live audio call is +1-866-519-4004 (toll-free from the U.S.),+852-3018-6771 (local dial-in from Hong Kong) or +1 845-675-0437 from international locations. The passcode for the call is 8097762. 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 2 hours after the conclusion of the call until 9:00 a.m. U.S. Eastern Daylight Time on Friday,May 28,2021 (9:00 p.m.,2021 in Hong Kong) and can be accessed by dialing +1-855-452-5696 (toll-free from the U.S.),+852-3051-2780 (local dial-in from Hong Kong) or +1-646-254-3697 from international locations. The passcode for the replay is 8097762. A webcast replay will also be available on the investor relations section of Canadian Solar's at www.canadiansolar.com.

AboutCanadian Solar Inc.

Canadian Solar was founded in 2001 in Canada and is one of the world's largest solar technology and renewable energy companies. It is a leading manufacturer of solar photovoltaic modules,provider of solar energy and battery storage solutions,and developer of utility-scale solar power and battery storage projects with a geographically diversified pipeline in various stages of development. Over the past 20 years,Canadian Solar has successfully delivered over 53 GWof premium-quality,solar photovoltaic modules to customers in over 150 countries. Likewise,since entering the project development business in 2010,Canadian Solar has developed,built and connected over 5.7 GWp in over 20 countries across the world. Currently,the Company has around 500 MWp of projects in operation,over 5 GWp of projects under construction or in backlog (late-stage),and an additional 15 GWp of projects in pipeline (mid- to early- stage). 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 onLinkedInor visitwww.canadiansolar.com.

Safe Harbor/Forward-Looking Statements

Certain statements in this press release regarding the Company's expected future shipment volumes,gross margins 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 and economic conditions and the state of the solar industry; volatility,uncertainty,delays and disruptions related to the COVID-19 pandemic; governmental support for the deployment of solar power; future available supplies of high-purity silicon; 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 Japan,the U.S.,China and Brazil; changes in customer order patterns; changes in product mix; capacity utilization; level of competition; pricing pressure and declines in 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; continued success in technological innovations and delivery of products with the features customers demand; shortage in supply of materials or capacity requirements; availability of financing; exchange rate fluctuations; litigation and other risks as described in the Company's SEC filings,including its annual report on Form 20-F filed on April 19,2021. 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.

FINANCIAL TABLES FOLLOW

The following tables provide unaudited select financial data for the Company's CSI Solar and Global Energy businesses. Historical values of first quarter of 2020 have been revised to conform to current period presentation:

Select Financial Data – CSI Solar and Global Energy

Three Months Ended March 31,2021

(In Thousands of U.S. Dollars,Except Percentages)

CSI Solar

Global

Energy

Elimination

and

unallocated

items (1)

Total

Net revenues

695,152

471,062

(76,875)

1,089,339

Cost of revenues

627,694

358,037

(90,994)

894,737

Gross profit

67,458

113,025

14,119

194,602

Gross margin

9.7%

24.0%

—

17.9%

Income (loss) from operations

(52,668)

85,081

11,070

43,483

Select Financial Data - CSI Solar and Global Energy

ThreeMonthsEndedMarch 31,2020

(In Thousands of U.S. Dollars,Except Percentages)

CSI Solar

Global

Energy

Elimination

and

unallocated

items(1)

Total

Net revenues

689,747

242,550

(106,662)

825,635

Cost of revenues

527,578

153,934

(79,074)

602,438

Gross profit

162,169

88,616

(27,588)

223,197

Gross margin

23.5%

36.5%

—

27.0%

Income from operations

84,181

60,830

(31,575)

113,436

(1) Includes inter-segment elimination,and unallocated corporate costs not considered part of management's evaluation of reportable segment operating performance.

Select Financial Data - CSI Solar,and Global Energy

Three Months Ended

March 31,2021

Three Months Ended

March 31,2020

(In Thousands of U.S. Dollars)

CSI SolarRevenues:

Solar modules

552,247

536,329

Solar system kits

36,071

29,197

Battery storage solutions

2,358

—

China energy (incl. electricity sales)

7,095

3,803

Others

20,506

13,756

Subtotal

618,277

583,085

Global Energy Revenues:

Solar power projects

452,847

227,754

O&M and asset management services

9,966

5,163

Others

8,249

9,633

Subtotal

471,062

242,550

Total net revenues

1,339

825,635

Canadian Solar Inc.

Unaudited Condensed Consolidated Statements of Operations

(In Thousands of U.S. Dollars,Except Share and Per Share Data and Unless Otherwise Stated)

Three Months Ended

March 31,

December 31,

March 31,

2021

2020

2020

Net revenues

$ 1,339

$ 1,040,654

$ 825,635

Cost of revenues

894,737

899,566

602,438

Gross profit

194,602

141,088

223,197

Operating expenses:

Selling and distribution

expenses

84,080

64,123

52,659

General and administrative

expenses

67,457

70,099

52,961

Research and development

expenses

12,450

10,040

10,056

Other operating income

(12,868)

(5,653)

(5,915)

Total operating expenses

151,119

138,609

109,761

Income from operations

43,483

2,479

113,436

Other income (expenses):

Interest expense

(14,673)

(17,984)

(19,013)

Interest income

3,248

2,415

2,779

Gain on change in fair

value of derivatives,net

12,572

6,098

33,109

Foreign exchange loss,net

(19,648)

(1,992)

(34,119)

Investment income (loss)

1,263

10,321

(14,012)

Other expenses,net

(17,238)

(1,142)

(31,256)

Income before income taxes

and equity in earnings of

unconsolidated investees

26,245

1,337

82,180

Income tax benefit (expense)

(13,852)

2,463

29,051

Equity in earnings of

unconsolidated investees

1,203

2,919

16

Net income

13,596

6,719

111,247

Less: Net income (loss)

attributable to non-

controlling interests

(9,183)

84

616

Net income attributable to

Canadian Solar Inc.

$ 22,779

$ 6,635

$ 110,631

Earnings per share - basic

$ 0.38

$ 0.11

$ 1.86

Shares used in computation -

basic

59,862,901

59,801,709

59,376,332

Earnings per share - diluted

$ 0.36

$ 0.11

$ 1.84

Shares used in computation -

diluted

67,531,709

61,147,256

60,084,298

Canadian Solar Inc.

Unaudited Condensed Consolidated Statement of Comprehensive Income (Loss)

(In Thousands of U.S. Dollars)

Three Months Ended

March 31,

2021

2020

2020

Net Income

13,247

Other comprehensive income

(net of tax of nil):

Foreign currency translation

adjustment

(31,702)

58,989

(45,971)

Loss on changes in fair value of

derivatives

—

(256)

(4,011)

Comprehensive income (loss)

(18,106)

65,452

61,265

Less: comprehensive

income(loss) attributable to non-

controlling interests

(15,692)

—

(1,441)

Comprehensive income (loss)

attributable to Canadian Solar

Inc.

(2,414)

65,452

62,706

Canadian Solar Inc.

Unaudited Condensed Consolidated Balance Sheets

(In Thousands of U.S.Dollars)

March 31,

December31,

2021

2020

ASSETS

Current assets:

Cash and cash equivalents

$ 981,230

$ 1,178,752

Restricted cash

538,925

458,334

Accounts receivable trade,net

395,857

408,958

Accounts receivable,unbilled

32,067

28,461

Amounts due from related parties

45,426

5,834

Inventories

933,726

695,981

Value added tax recoverable

116,714

102,460

Advances to suppliers

230,266

182,146

Derivative assets

9,944

23,351

Project assets

755,998

747,764

Prepaid expenses and other current assets

367,780

353,781

Total current assets

4,407,933

4,185,822

Restricted cash

2,991

2,629

Property,plant and equipment,net

1,264,596

1,157,731

Solar power systems,net

154,633

158,262

Deferred tax assets,net

180,850

170,656

Advances to suppliers

119,204

97,173

Prepaid land use right

61,070

62,414

Investments in affiliates

73,748

78,291

Intangible assets,net

21,143

22,429

Project assets

326,916

389,702

Right-of-use assets

29,164

26,793

Other non-current assets

197,225

184,952

TOTAL ASSETS

$ 6,839,473

$ 6,536,854

Canadian Solar Inc.

Unaudited Condensed Consolidated Balance Sheets (Continued)

(In Thousands of U.S.Dollars)

March 31,

2021

2020

Current liabilities:

Short-term borrowings

$ 1,217,469

$ 1,202,285

Long-term borrowings on project assets -

current

263,826

198,794

Accounts payable

705,139

514,742

Notes payable

689,773

710,636

Amounts due to related parties

504

314

Other payables

588,072

508,839

Advance from customers

223,037

189,470

Derivative liabilities

988

10,755

Operating lease liabilities

16,476

15,204

Other current liabilities

168,443

237,316

Total current liabilities

3,873,727

3,588,355

Accrued warranty costs

41,974

37,732

Long-term borrowings

467,222

446,090

Convertible notes

223,549

223,214

Liability for uncertain tax positions

14,806

14,729

Deferred tax liabilities

48,475

49,080

Loss contingency accruals

30,941

26,458

Operating lease liabilities

13,997

13,232

Financing liabilities

81,293

81,871

Other non-current liabilities

168,914

163,308

TOTAL LIABILITIES

4,964,898

4,644,069

Equity:

Common shares

687,033

687,033

Additional paid-in capital

(26,138)

(28,236)

Retained earnings

963,083

940,304

Accumulated other comprehensive loss

(53,872)

(28,679)

Total Canadian Solar Inc. shareholders'

equity

1,570,106

1,422

Non-controlling interests in subsidiaries

304,469

322,363

TOTAL EQUITY

1,874,575

1,892,785

TOTAL LIABILITIES AND EQUITY

$ 6,854

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