FIRST SOLAR, INC. Q4 FY2025 earnings call

• Navigated a complex policy and trade environment, secured gross bookings of 2.3 gigawatts excluding domestic India volume and 0.1 gigawatt of low - bin inventory clearance, booked 1 gigawatt in key U.S. utility - scale market at $0.364 per watt.
• Advanced U.S. capacity expansion with commercial production in Louisiana and plans to onshore Series 6 module finishing in South Carolina.
• Advanced CdTe - based CURE platform with initial modules delivered and CURE conversion rollout starting at Ohio Series 6 factory.
• Advanced perovskite thin film program with perovskite development line launched and perovskite Series 6 module form factor pilot line sourcing initiated.
• Actively enforced intellectual property rights, including U.S. Patent and Trademark Office denying petitions to invalidate TOPCon portfolio and filing petition with ITC against foreign - headquartered manufacturers infringing on TOPCon patent.

In 2025, First Solar delivered record sales of 17.5 gigawatts of modules with net sales of $5.2 billion, a 24% year - over - year increase. Full year diluted EPS was $14.21 per share. The firm advanced its U.S. capacity expansion, initiated commercial production in Louisiana, announced plans to onshore finishing of Series 6 modules in South Carolina, advanced CdTe - based CURE semiconductor platform with initial modules delivered and CURE conversion rollout starting, and advanced next - generation perovskite thin film program. Gross margin in Q4 increased due to higher mix of U.S. - manufactured modules, lower nonstandard freight charges, and resolution of glass supply chain disruption, but full year gross margin decreased due to tariff costs, warehousing expense, detention and demurrage. Backlog at year - end was 50.1 gigawatts valued at $15 billion, with approximately 23.2 gigawatts of contract volume including adjusters that could generate up to $600 million recognized in 2027 - 2028.

2026 net sales guidance is between $4.9 billion and $5.2 billion. Gross margin expected to be between $2.5 billion and $2.6 billion or approximately 49.5% including Section 45X tax credits and ramp and underutilization costs. SG&A expense between $215 million and $225 million, R&D expense between $285 million and $290 million. Forecast full - year adjusted EBITDA of $2.6 billion to $2.8 billion. First - quarter module sales expected 3.4 to 4.0 gigawatts, Section 45X tax credits $330 million to $400 million, adjusted EBITDA $400 million to $500 million. Capital expenditures in 2026 forecast $800 million to $1 billion. Expect to end 2026 with gross and net cash balances between $1.7 billion and $2.3 billion and assume full repayment of India credit facility by 06/30/2026.

• Policy and trade environment remains complex with ongoing uncertainties such as FEOC restrictions, Section 232 actions, AD/CVD investigations, and potential retroactive tariffs.
• Intellectual property risks with ongoing IP enforcement actions and potential legal challenges.
• Tariff impacts on bill of material and finished goods imports, including higher tariff rates and indirect commodity cost pressure.
• Uncertainty around warranty - related matters and potential future loss estimates.
• Risk of overcapacity in the solar panel market in India and challenges in the vertically integrated supply chain development there.

Q: Hey, guys. Good afternoon. Thanks for taking the question. I guess just on the ASP front, Mark, you mentioned the $0.364 per watt, including adders for the U.S. bookings this quarter. How much did the adders add there? And then is that sort of the level of entitlement, 36 and above, that you would expect for U.S. bookings through the rest of the year? Maybe can you comment on visibility you have on the pricing environment from this point forward? And then just secondarily on the gross margins, I would be curious, I mean, if you factor out underutilization and the 45X credit, it is implying kind of a 10% component gross margin in the guidance even if I know there are a lot of moving pieces, Alex, but when do you get back to high teens, 20% type of gross margin for components the way you were at in 2024? And what are some of the big bridges to get back there.

A: Mark R. Widmar: There is about 2.5 to 3 cents of adder in the $0.364 per watt, pricing is reflective of domestic content and could be influenced by FEOC and Solar 4 announcements. Alexander R. Bradley: Backing out 45X, it is about 7% gross margin. To walk back to 20% margin, factors include reducing underutilization, reducing warehousing costs, and recognizing adjusters in backlog.

Q: Thank you. Thank you all very much. Appreciate the opportunity to connect here. If I can ask you first off, just to reconcile on the volumes produced versus sold. Can you comment a little bit about just what you are seeing here of late? Separately, can you comment a little bit about what you are actually seeing in terms of sell - through on volumes out of Asia? I know your prepared comments had some nuance on this, but elaborate a little bit about both Southeast Asia and India—what you are assuming here in 2026 and what you are seeing preliminarily for 2027 as well?

A: Alexander R. Bradley: Delta between produced and sold volume is about 700 megawatts coming out of inventory. In India, demand is strong with 3 gigawatts or so sold in 2026 domestically. In Southeast Asia, factories are extremely underutilized, running at 20% or so, with capacity potentially utilized when South Carolina facility is up, and looking at option value for potential tailwinds.

Q: Yes. Good afternoon. Thanks for taking our questions. Within the last couple of months, there was an individual with a vast amount of resources that is talking about ramping up a supply of U.S. - based solar panel production over the coming years. Just curious if that is having any real impact on the conversations you are having with your customers, especially as you look out to later this decade? And I have a quick follow - up. Thanks.

A: Mark R. Widmar: It is having very little impact currently, as it has not reached the stage of site announcements, equipment purchase, or operation commencement. Alexander R. Bradley: Added comment on constraint of access to power for hyperscalers.

Q: Okay. Thank you for that. That makes sense. And then I just want to ask a clarifying follow - up to Brian Lee’s question earlier. When you said the $0.364 is for the domestic content, are you saying that that is the blended rate—so it would be a higher amount than that for the U.S. domestic content averaged with whatever, $0.30 for international—or is that $0.364 how we should be thinking about the domestic content portion?

A: Mark R. Widmar: The way they price is by negotiating points with customers based on their procurement strategy around IRA, and can blend international volume within certain parameters, with pure international S6 product into U.S. market having lower ASP.

Q: Hey, guys. Thanks for taking my questions. First one, just was wondering if you could give us a little more color on why no EPS guide for 2026. And then secondly, in terms of the ASP implied for the 2026 guide, it seems like the U.S. ASP might be a little bit low. I think in 2025, it was closer to $0.324, but the implied U.S. ASP in the 2026 guide seems to be closer to $0.308. So I was wondering if you might be able to give some color on that. And then finally, on Oxford PV, can you share what kinds of efficiencies you are able to generate? What are you seeing in your test modules, if any? And then what is your sense of timing as to when commercial volumes could actually ramp? Thanks, guys.

A: Alexander R. Bradley: No EPS guide as moving to guiding EBITDA for better operational performance comparability, and ASP is around $0.308 due to backlog adjusters and limited CURE upside this year. Mark R. Widmar: Perovskite program has development line producing small form factor modules with best - in - class efficiencies and stability, with next phase including pilot line and commercial volumes ramping after scaling and uniformity issues are addressed.

Q: Good evening, everyone. I wanted to ask sort of a two - part question about CURE and potential for cancellations. First on India, can you talk about the pricing environment? I was wondering if you can give confidence that the sales in the market are viable, the pricing is stable, is expected to stay stable throughout the year. Understand there is no sizable spot market in the U.S., but is there a possibility some of that volume can be redirected to the U.S. given 15% tariffs now in place? And then finally on India, it seems there is a lot of domestic capacity for panels being ramped up. How do you think about that capacity in the long term and the viability of that market for solar panels? And then as a follow - up on cancellations, you have historically mentioned pricing and EU players pulling back investments from renewables in the U.S. market has created this risk of cancellations. With lower tariffs, how are the conversations going with customers? Is that risk much lower now? And if you can quantify how much of the contracts are potentially at risk of cancellations. Thank you.

A: Mark R. Widmar: Pricing in India is lower but realizes high - teens to low - 20% gross margin, and there is potential to redirect volume to U.S. market if tariff construct is right. Long - term, India market has risk of overcapacity but First Solar is cost - and energy - advantaged. Alexander R. Bradley: Cancellation risk not necessarily linked to tariffs, more due to strategic shifts by players, and international product in backlog is small with more opportunity to move U.S. products back into market and enforcing termination penalties.

Q: Hey, guys. Thanks for putting me in here. I just wanted to square your time to power—it is a big question or big emphasis out there. And I know you have so many moving pieces. And just bookings, I am trying to square time and power and the need for electrons with how you guys are doing bookings, but, you know, your different moving pieces right now. Thank you.

A: Mark R. Widmar: Have 50 gigawatts of contracted volume, customers have urgency around execution and time to power, with different safe harbor periods, and customers dealing with permitting, financing, and portfolio development issues.