First Solar Q2 Earnings Call Highlights

Key Points

• First Solar delivered a strong second quarter: Net sales reached approximately $1.06 billion, net income rose 24% to $423 million, and gross margin expanded to about 57%, helped by tariff-related benefits, Section 45X tax credits, and lower logistics costs.
• Demand and backlog remained robust: Contracted backlog stood at 45.1 GW valued at $13.6 billion, with deliveries scheduled through 2030. The company also reported new U.S. and India bookings and highlighted roughly 5 GW of hyperscaler-related projects.
• Full-year 2026 guidance was reaffirmed, while trade policy remains a key uncertainty. First Solar is advancing South Carolina capacity and perovskite technology, but future manufacturing decisions depend partly on the outcome of pending U.S. tariff and domestic-content regulations.

First Solar NASDAQ: FSLR reported record second-quarter and first-half sales volume for 2026, with quarterly net sales exceeding $1 billion and gross margin expanding to about 57%, as the company continued to prioritize domestic manufacturing and disciplined contracting amid evolving U.S. trade policy.

Chief Executive Officer Mark Widmar said the company also surpassed 100 gigawatts of cumulative module sales globally during the quarter. “We view this as a reflection of the trust customers have placed in First Solar,” Widmar said, citing the company’s technology and manufacturing platform.

Second-Quarter Financial Results

Chief Financial Officer Alex Bradley said second-quarter net sales totaled approximately $1.06 billion, down about 4% from a year earlier. The year-over-year decline primarily reflected lower revenue tied to customer contract terminations recognized in the prior-year period, partly offset by higher module volume sold.

Gross margin increased roughly 12 percentage points from the second quarter of 2025 to approximately 57%. Bradley attributed the improvement primarily to an estimated $89 million net benefit related to tariffs under the International Emergency Economic Powers Act, a higher mix of modules eligible for Section 45X tax credits, and lower logistics costs.

The tariff-related benefit reflects the company’s estimate of expected recoveries connected to commercial obligations and other tariff considerations, and remains subject to further refinement, Bradley said. Higher duties and tariffs, lower termination-related revenue, and elevated over-the-road freight expenses partly offset those gains.

• Net income was $423 million, up approximately 24% year over year.
• Adjusted EBITDA was $644 million, above the high end of the company’s previously communicated quarterly preview range.
• Adjusted EBITDA margin was 61%.
• Operating expenses totaled about $155 million, including $76 million in research and development spending.

R&D expense rose from the prior year as First Solar continued investing in perovskite technology development and recorded impairment charges for certain R&D equipment no longer expected to be used in its technology roadmap.

Backlog, Bookings and Data-Center Demand

As of June 30, First Solar had contracted backlog of 45.1 GW, representing an aggregate transaction value of $13.6 billion excluding technology adjusters. Scheduled deliveries extend through 2030.

The company recorded approximately 1.9 GW of additional U.S. gross bookings since its prior earnings call, at an average selling price of about $0.36 per watt, including applicable technology adjusters. India gross bookings totaled approximately 1.1 GW in the first half, at an average selling price of about $0.20 per watt.

Bradley said First Solar’s fully integrated U.S. manufacturing capacity remains substantially committed through 2028, supporting volume and pricing visibility. The company has continued to be selective in considering additional contracts because of limited uncommitted domestic capacity over the next several years.

The company highlighted Cypress Creek Energy’s Steel River Energy Center in Arkansas, which uses First Solar modules and was already included in backlog. The initial phase is expected to provide approximately 1.6 GW of solar generation capacity and 1.9 GWh of battery storage to support Google’s energy needs.

Widmar pointed to recently announced projects involving Cypress Creek, Terra-Gen and Panamint as evidence of continued demand from hyperscalers and other large corporate customers. He said the projects collectively represent about 5 GW of capacity, with roughly half directly tied to Google.

Manufacturing Plans and Technology Development

First Solar’s U.S. facilities continued operating at high utilization during the quarter. Phase I of the company’s South Carolina finishing facility remains on track to begin production in the second half of 2026, while Phase II is now expected to be completed in mid-2027.

Widmar said the revised Phase II timeline will allow earlier incorporation of the company’s CuRe technology. He said high-volume manufacturing results at the Perrysburg facility and field-deployment performance across several climates have exceeded expectations.

When complete, the South Carolina site is expected to provide up to 3.5 GW of finishing capacity for modules initiated at First Solar’s international factories. The facility is intended to provide supply-chain flexibility and help optimize freight, tariff, domestic-content, and Section 45X economics.

First Solar is also continuing its perovskite development program. Its Series 6 form-factor pilot line is expected to reach operational readiness in the first half of 2027.

Trade Policy Remains a Key Variable

Management repeatedly cited pending outcomes from the Section 232 polysilicon and derivatives investigation, final foreign entity of concern regulations, and other tariff matters as important considerations for customer activity and manufacturing decisions.

Widmar said First Solar expects a Section 232 outcome to be constructive but declined to predict its timing or final structure. He said the company believes policy clarity is needed for customers and the broader industry to move forward with greater certainty.

First Solar has about 1.8 GW of fully finished manufacturing capacity in Malaysia and Vietnam that could potentially be ramped, after accounting for capacity serving the South Carolina finishing line. Bradley said the company is waiting for Section 232 policy clarity before determining the long-term role of that capacity.

The company could bring finished international product into the U.S., use a limited amount of existing domestic finishing capacity for semi-finished products, or potentially consider another U.S. finishing line, although Bradley said building another facility was the less likely option.

Outlook Reaffirmed

First Solar left its full-year 2026 guidance unchanged. The outlook now assumes a net tariff impact of $60 million to $80 million, including the estimated IEEPA recovery and an assumption that Section 301 tariffs will apply in the second half.

For the third quarter, the company expects module volumes sold of 3.9 GW to 4.5 GW and adjusted EBITDA of $625 million to $775 million. Management said its priorities remain disciplined execution, technology advancement, customer service, prudent capital management, and preserving financial flexibility.

About First Solar (NASDAQ:FSLR)

First Solar, Inc NASDAQ: FSLR is a United States–based solar technology company best known for designing and manufacturing thin‑film photovoltaic (PV) modules that use cadmium telluride (CdTe) semiconductor technology. The company supplies PV modules and delivers integrated solar power solutions for utility‑scale projects, positioning itself as a provider of both components and complete solar energy systems rather than solely a parts supplier. First Solar was founded in 1999 and is headquartered in Tempe, Arizona.

Beyond module manufacturing, First Solar offers a range of project services including development support, engineering, procurement and construction (EPC) services, and operations and maintenance (O&M) for large-scale solar installations.

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