First Solar, Inc.

What they do

First Solar manufactures PV solar modules using a single-junction polycrystalline thin film with CdTe as the absorption layer, which uses roughly 2% to 3% of the semiconductor material needed for conventional crystalline silicon modules. Manufacturing is a fully integrated, continuous flow process, and the company states it does not rely on Chinese crystalline silicon supply chains. It has sold more than 93 GW of modules worldwide from facilities in the United States, Malaysia, Vietnam, and India.

Revenue drivers

• Series 7 module sales to third parties — The primary revenue source: sales of CdTe thin film modules. In Q2 2026, net sales were $1.06 billion, a 4% year-over-year decrease driven mainly by lower revenue from customer contract terminations, partly offset by higher volume of modules sold to third parties.
• U.S. manufacturing output — Management guided Q3 2026 module sales of 3.9 GW to 4.5 GW total, including 3.2 GW to 3.7 GW from U.S. manufacturing operations, indicating U.S.-produced modules are the majority of expected quarterly volume.
• Section 45X tax credits — 2026 guidance assumes $2.10 billion to $2.19 billion of Section 45X tax credits, alongside $115 million to $135 million of underutilization costs, making the credit a material component of forecasted economics.

Recent performance

For the second quarter of 2026, net sales were $1.06 billion, down 4% year-over-year, due primarily to lower revenue associated with customer contract terminations, partially offset by higher third-party module volume. Net income was $423 million, or $3.92 per diluted share, up from $342 million, or $3.18 per diluted share, in Q2 2025. Adjusted EBITDA was $644 million versus $560 million a year earlier. Management said the company delivered record second-quarter and first-half sales volume and surpassed 100 GW of cumulative module sales globally. Net cash balance fell to $1.7 billion as of June 30, 2026 from $2.4 billion at December 31, 2025, driven by seasonal working-capital needs and capital expenditures mainly for the South Carolina finishing facility.

Strategy

First Solar's stated strategy centers on its CdTe thin film technology as a competitively and responsibly produced alternative to crystalline silicon modules, supported by over $2 billion in cumulative R&D investment in the last 20 years. It is expanding domestic manufacturing: Series 7 production began in Ohio and India in 2023, Alabama in 2024, and Louisiana in 2025, with a sixth U.S. facility under construction to onshore final production processes for modules initiated internationally, expected to start operations in the second half of 2026. The company is also progressing its copper replacement (CuRe) program and cost reduction roadmaps. It reported contracted sales backlog of 45.1 GW as of June 30, 2026, extending through 2030.

Risks

• Intense solar competition and supply imbalance — The 10-K states competition across the solar value chain is intense and global PV module supply/demand may be structurally imbalanced, with competitors potentially pricing near or below manufacturing cost or operating at minimal or negative margins for sustained periods.
• Dependence on subsidies and trade policy — The company warns that modification, reduction, elimination, or expiration of government subsidies, tax incentives, renewable energy targets, tariffs, export controls, or other trade remedies could negatively impact module demand and prices, net sales, or costs.
• Customer concentration and contract termination — First Solar states the loss of any large customer, or customer inability to perform, including through terminations of any contract in part or in full, has reduced and could significantly reduce net sales.
• Tariff refund collection — The 10-Q adds the risk of obtaining, realizing, or timely collecting tariff refunds, including refunds filed with U.S. Customs and Border Protection relating to IEEPA duties, and uncertainty about the amount and timing of such recoveries.

Outlook

Management reaffirmed 2026 guidance: volume sold of 17.0 GW to 18.2 GW, net sales of $4.9 billion to $5.2 billion, gross profit of $2.4 billion to $2.6 billion, operating expenses of $610 million to $635 million, Adjusted EBITDA of $2.6 billion to $2.8 billion, capital expenditures of $0.8 billion to $1.0 billion, and a net cash balance of $1.7 billion to $2.3 billion. For Q3 2026, the company anticipates module sales of 3.9 GW to 4.5 GW and Adjusted EBITDA of $625 million to $775 million. Guidance assumes the current U.S. policy environment persists and permitting processes and timelines remain consistent with historical levels. No GAAP net income guidance or quantitative reconciliation of Adjusted EBITDA guidance to GAAP net income is provided.