FIRST SOLAR, INC. Q1 FY2025 earnings call

• Secured net bookings of 0.6 gigawatts in Q1 with a base ASP of $0.305 per watt, excluding certain sales. Contracted backlog is 66.3 gigawatts.
• Produced 4.0 gigawatts in Q1, including 2 gigawatts of Series 6 and 2 gigawatts of Series 7 modules. Completed limited commercial production run of CuRe technology modules, with initial data showing positive energy profile and industry-leading degradation rate.
• Domestic capacity expansion ongoing: Alabama factory ramping, Louisiana facility construction completed with equipment installation underway, expected to begin commercial operation in H2 2025 and increase U.S. nameplate manufacturing capacity to over 14 gigawatts by 2026.
• Faced near-term uncertainty from budget reconciliation and trade developments, including new tariffs on India, Malaysia, and Vietnam affecting international manufacturing for U.S. market. Pivot towards India facility producing more for domestic market and evaluating options for Malaysia and Vietnam factories.

In Q1 2025, First Solar recorded 2.9 gigawatts of module sales. Production was 4.0 gigawatts, consisting of 2 gigawatts of Series 6 and 2 gigawatts of Series 7 modules. Contracted backlog stood at 66.3 gigawatts as of the call. Net bookings in Q1 were 0.6 gigawatts at a base ASP of $0.305 per watt, excluding adjusters and Indian domestic sales.

Updated 2025 guidance: Net sales range $4.5 billion to $5.5 billion. EPS range $12.50 to $17.50. CapEx expected $1 billion to $1.5 billion. Q2 module sales expected 3 to 3.9 gigawatts, Section 45X credits 310 million to 350 million, EPS $2 to $3. Upper end of EPS guidance reduced by $2.50 per share due to tariff impacts.

Near-term uncertainty from budget reconciliation and trade developments, including new tariffs on India, Malaysia, and Vietnam creating economic headwinds. Uncertainty around reinstatement of reciprocal tariffs and their impact on international manufacturing for U.S. market. Potential adverse gross margin impact from tariffs if not passed through to buyers. Uncertainty in quantifying precise tariff rates for module shipments beyond H2 2025.

Q: About bookings and tariffs, how have conversations with customers been since tariffs?

A: Strong momentum with customers reaching out, but uncertainty around market ASP and budget reconciliation/IRA impact makes it difficult to finalize commitments.

Q: On Series 7 underperformance, details?

A: Third-party report validated root causes and corrective actions implemented. Reached settlement agreements with some customers. Stand behind product under warranty.

Q: On guidance volume downside, reasons?

A: Tariffs make international production for U.S. market uneconomical, leading to removal of certain volume from guidance. U.S. manufactured volume unchanged.

Q: On deposits and 12 gigawatts backlog, re-pricing risk?

A: 12 gigawatts at risk, but remaining backlog mostly domestic with no re-pricing risk. Discussions ongoing with customers on tariff impacts and potential finishing lines to address volume needs.