First Solar Q3 Earnings Call Highlights

Key Points

• Strong Q3 profitability: First Solar reported approximately $1.2 billion in sales, 58% gross margin, $571 million in net income and $5.30 in diluted EPS. Sales fell 23% year over year, but margins rose sharply due to a greater mix of U.S.-produced modules and lower costs.
• Large backlog and technology expansion: The company ended the quarter with 44 GW under contract worth about $13.5 billion through 2030, while advancing CuRe technology, South Carolina and India capacity, and a perovskite pilot line targeted for readiness in the first half of 2027.
• Strategic flexibility amid policy uncertainty: First Solar plans to decide in the first half of 2027 whether to maintain or shut down Malaysia production and authorized a $500 million share-repurchase program. Updated 2026 guidance reflects lower expected sales volumes in several markets, while operating-expense and net-cash forecasts were unchanged.

First Solar NASDAQ: FSLR reported third-quarter net sales of approximately $1.2 billion, gross margin of about 58%, net income of $571 million and adjusted EBITDA of $744 million, as the company advanced its U.S. manufacturing expansion, CuRe technology deployment and perovskite research program.

Chief Executive Officer Mark Widmar said third-quarter sales declined roughly 23% from the prior-year period, primarily reflecting lower third-party module volumes. However, gross margin increased by about 20 percentage points year over year, aided by a higher mix of U.S.-produced modules as well as lower freight rates, underutilization costs, tariffs and duties. Diluted earnings per share were $5.30, compared with $4.24 a year earlier.

Manufacturing and Technology Plans

First Solar said it is deploying its CuRe technology through a staged, “learnings-based” process. After beginning with a Series 6 conversion in Perrysburg, Ohio, during the first quarter, the company expects to start its first Series 7 conversion at its India facility in the first quarter of 2027.

Widmar said beginning the Series 7 transition in India is intended to allow the company to refine the process in a lower earnings-impact environment before replicating it across its U.S. Series 7 fleet. Subject to a supportive trade environment, the company plans to flex India front-end output to supply U.S. facilities during U.S. conversions, supporting U.S. back-end throughput and preserving partial domestic-content and Section 45X-eligible production during the transition.

India’s finished-goods production is expected to range from 2.2 gigawatts to 2.6 gigawatts in 2027. First Solar also said its South Carolina Series 6 finishing facility is being brought online in two phases using an integrated manufacturing flow from Vietnam. The first phase began production during the third quarter, while the second phase is expected to reach commercial launch in mid-2027 after a roughly one-quarter delay to incorporate CuRe technology. South Carolina production is expected to be 2.2 GW to 2.5 GW in 2027.

The company’s Ohio pilot line designed to produce Series 6-size perovskite modules remains on track for operational readiness in the first half of 2027. The line is intended to support field deployment and validation of manufacturing, performance and durability before broader scaling decisions. First Solar also cited its newly announced licensing agreement with CubicPV and its earlier intellectual-property agreement with Oxford PV as support for its perovskite roadmap.

Backlog, Pricing and Market Conditions

First Solar ended the quarter with 44 GW under contract, representing approximately $13.5 billion of contracted value excluding technology adjusters, with deliveries scheduled through 2030. Since its previous earnings call, the company recorded about 1.4 GW of additional U.S. gross bookings at an average selling price of roughly $0.36 per watt, including applicable technology adjusters.

Chief Financial Officer Alex Bradley said substantially all of that volume was contracted or in late-stage negotiation before the Section 232 announcement, when pricing and terms had largely been set. The company also has approximately 4 GW of variable volume under previously signed contracts that is not included in contracted backlog. About half of that volume has customer decision dates within the next five months, with the rest spread through 2027 and 2028.

Management said recent customer activity has shifted toward project-specific contracts with defined delivery schedules rather than broad, multi-year framework agreements. Widmar said the structure can provide better visibility into permitting, interconnection, financing and delivery timing, although it can slow reported backlog additions compared with larger framework deals.

The company said developers are concentrating on nearer-term projects while facing uncertainty tied to project economics, tariffs, battery costs, interconnection issues, local opposition and pending foreign-entity-of-concern guidance. Widmar cited an example of a 2-GW procurement that was in late-stage negotiations before a state imposed a moratorium that stopped the project.

First Solar said it has raised pricing on negotiations that remained in earlier stages following the Section 232 announcement and on new opportunities that emerged afterward. However, management declined to provide a specific pricing outlook, noting that prices vary by product type, domestic content and manufacturing location. Widmar said pricing for imported finished modules from Malaysia would be at the low end of the company’s range, while domestically manufactured Series 7 modules would be at the high end.

Malaysia Decision and Updated Outlook

First Solar expects to decide in the first half of 2027 whether to operate its Malaysia facility at full or near-full capacity or shut down production. The facility can produce finished international modules, while Vietnam is expected to provide semi-finished product for the South Carolina finishing operation.

Bradley said the company has maintained low throughput at Malaysia during 2026 because the associated underutilization cost was worth retaining the option to serve potential demand for international product. First Solar intends to prioritize sales of U.S.-content modules, followed by South Carolina finishing-line production, before international modules. Management said either outcome for Malaysia is not expected to materially affect its run-rate earnings profile.

The company updated its 2026 guidance to reflect lower sales volume at the low end of its range for India domestic, international Series 6 and U.S. finishing products. First Solar reduced its forecast for India domestic volume sold by about 0.7 GW. Its forecast for fully domestic products sold was unchanged.

Operating-expense guidance for 2026 was unchanged, as higher legal spending related to defending its TOPCon intellectual-property position and increased perovskite research spending were offset by delayed South Carolina startup expenses. Perovskite-related spending, originally forecast at approximately $100 million, is now expected to total about $120 million. Net-cash guidance also remained unchanged, with lower expected cash inflows from volume sales offset by reduced forecast capital expenditures.

Capital Allocation

First Solar ended the quarter with approximately $1.5 billion in net cash, at the low end of its long-term target range of $1.5 billion to $2 billion. Following the Section 232 proclamation during the third quarter, the board authorized a share-repurchase program of up to $500 million, effective immediately and without an expiration date.

Bradley said the authorization is intended to support shareholder returns while preserving the company’s ability to invest in technology development, research, manufacturing growth and potential complementary technology acquisitions.

About First Solar (NASDAQ:FSLR)

First Solar, Inc is a vertically integrated solar technology and manufacturing company that designs, manufactures and sells photovoltaic (PV) solar modules. Its modules use advanced thin-film semiconductor technology based on cadmium telluride (CdTe), rather than the crystalline-silicon technology used by most solar manufacturers. The company serves utility-scale solar developers, commercial and industrial customers, and other large-scale energy users.

Founded in 1999 and headquartered in Tempe, Arizona, First Solar operates research and development, manufacturing and recycling facilities in the United States and internationally.

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