FIRST SOLAR, INC. Q3 FY2025 earnings call

• Manufacturing: Produced 3.6 gigawatts in Q3, with 2.5 gigawatts from U.S. facilities and 1.1 gigawatts from international operations. Reduced production in Malaysia and Vietnam due to lower demand. Advanced domestic capacity expansion, including initiating production runs at Louisiana facility. Pursued IP rights, filing 3 patents against competitors like Canadian Solar, JinkoSolar, and Mundra.
• Supply Chain: Alabama facility faced glass supply disruptions in Q3, impacting production by ~0.2 gigawatts, but resolved. Louisiana factory initiated integrated production runs and is ahead of ramp expectations. Announced a new 3.7 gigawatts U.S. production facility for Series 6 module finishing, with production starting end-2026 and ramping through first half of 2027.
• Policy and Trade: U.S. policy environment favorable but uncertain with trade developments like 2-year suspension of antidumping/countervailing duties ruling and Solar 4 investigation. India's policy changes, including tariff rate increase and LIST-II inclusion, strengthening First Solar's position in the Indian market.

First Solar achieved a record 5.3 gigawatts of module sales in Q3 2025 and reported Q3 earnings of $4.24 per diluted share. Gross bookings were approximately 2.7 gigawatts at a base ASP of $0.309 per watt, including 0.4 gigawatts of Series 7 modules at $0.29 per watt. Debookings totaled approximately 6.9 gigawatts, with 6.6 gigawatts terminated from affiliates of BP. The current expected contracted backlog is approximately 54.5 gigawatts. Gross cash increased to $2 billion, supported by improved working capital, new bookings deposits, and accelerated customer payments.

Revised full-year 2025 guidance: Net sales projected at $4.95 billion to $5.20 billion, gross margin between $2.1 billion and $2.2 billion, operating income $1.56 billion to $1.68 billion, EPS $14 to $15. Impacted by new U.S. facility ($330M direct spend), BP termination, and glass supply issues. Capital expenditures for 2025 expected to range $0.9 billion to $1.2 billion, year-end net cash balance $1.6 billion to $2.1 billion.

• Supply chain disruptions: Glass supply issues in Alabama impacted Q3 production.
• Customer terminations: 6.6 gigawatts terminated from BP affiliates, leading to underutilization costs and margin erosion.
• Policy and trade uncertainties: Uncertainties around 232 polysilicon investigation, FEOC guidance, and changing tariff environments.

Q: On 6.6 gigawatts termination with BP, pricing and 232 impact A: Mark discussed potential pricing for rebooking BP volume, expecting good prices with catalysts like 232 and FEOC, and noted existing contracts have fixed pricing not allowing tariff adjustments Q: On 3.7 gigawatts finishing line CapEx A: Alex explained $330M direct spend, with $260M CapEx and $70M non-capitalized expense, $26M CapEx and $2M production start-up expense in 2025 Q: On BP contracts bucket A: Alex clarified BP contracts were not take-or-pay, with cash deposits recognized as revenue and LCs pulled Q: On backlog confidence A: Mark discussed risks of customer pivots but emphasized positive policy environment and strong project economics supporting backlog Q: On Louisiana and Alabama ramp A: Mark talked about good ramp progress in Louisiana, with Alabama facing glass issues but hitting throughput requirements now Q: On litigation precedent A: Mark discussed strong contracts and legal position, believing in enforceability based on past terminations and New York court stance Q: On Malaysia and Vietnam absorption A: Mark discussed plans to absorb international volume through potential large customer deals, subject to tariff and policy environments