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From Motley Fool Transcribing, April 30:
Date
Thursday, April 30, 2026 at 4:30 p.m. ET
Call participants
- Chief Executive Officer — Mark R. Widmar
- Chief Financial Officer — Alexander R. Bradley
Takeaways
- Net sales -- $1.0 billion, a record for the first quarter, reflecting 24% growth driven by a 31% increase in module volume, partially offset by a lower average selling price from higher India deliveries.
- Gross margin -- 47%, expanding six percentage points over 2025, due to higher qualifying Section 45X volumes and reduced freight costs.
- Module production -- 4.3 GW total, comprising approximately three GW from U.S. facilities and one GW from international plants, with U.S. facility utilization at about 96%.
- Adjusted EBITDA -- $520 million, above the upper end of preview guidance, with a 50% adjusted EBITDA margin.
- Net income and EPS -- $347 million in net income and diluted EPS of $3.22, representing a 65% increase.
- Backlog -- 47.9 GW contracted at a $14.4 billion aggregate transaction price (excluding technology adjusters), with deliveries scheduled through 2030.
- Bookings -- Gross bookings of one point seven GW during the quarter (0.9 GW U.S. at $0.34/watt average; 0.8 GW India at $0.20/watt average); gross bookings of one point nine GW since the last call, including 1.4 GW U.S. utility-scale at $0.35/watt average (some at $0.36–$0.37/watt).
- CURE technology launch -- Successfully completed at Perrysburg with the first Series 6 ramping as anticipated, enabling up to $600 million potential additional revenue (majority anticipated for 2027 and 2028) via technology adjusters as rollout continues.
- Operating expenses -- $141 million, including $67 million R&D, up $15 million, reflecting perovskite and CURE initiatives.
- Operating cash flow -- $215 million outflow, significantly down from $608 million prior year due to improved working capital dynamics.
- Cash and equivalents -- $2.4 billion total, with $2.0 billion net cash, at the high end of the internal target range.
- Manufacturing outlook -- South Carolina finishing facility remains on track for a 2026 production start; equipment installation underway this quarter and intent to optimize for U.S. content and Section 45X credits.
- International operations -- Malaysia and Vietnam plants operating at reduced utilization due to trade dynamics and lower ASP expectations; sequentially increased underutilization charges expected for fiscal Q2 ending June 30, 2026.
- Full-year guidance -- No change in full-year 2026 outlook; fiscal Q2 guidance of 3.4–four GW volumes sold and $400 million–$500 million adjusted EBITDA.
Risks
- Bradley stated, "we ran Malaysia and Vietnam at higher utilization rates in the first quarter than we anticipate running in [the] second quarter," indicating increased underutilization charges and "a little bit of headwind in the second quarter because of lower utilization."
- Continued booking selectivity in the U.S. market driven by the need to "await clarity from current policy and regulatory matters," especially the outcome of the Section 232 tariff and proposed FEOP rulemaking, which could delay incremental contract wins.
First Solar (FSLR +5.03%) reported record first-quarter sales and margin expansion despite international headwinds, with U.S. manufacturing achieving near full utilization and India volumes contributing significant backlog at lower average price points. The CURE technology launch was completed at the Perrysburg facility, positioning First Solar for continued operational differentiation and potential future revenue gains tied to technology adjusters as fleet-wide deployment progresses. Management reaffirmed unchanged full-year guidance and indicated continued discipline in U.S. bookings ahead of key trade and policy decisions, maintaining a strong balance sheet and strategic emphasis on U.S. and India supply chain independence.
- Management described U.S. backlog through 2028 as "substantially committed," providing pricing clarity amid booking selectivity.
- Widmar stated that the Section 337 IP investigation, targeting the U.S. TOPCon import market, was instituted by the U.S. ITC in March with determinations expected in 11 to 15 months.
- Bradley noted a sequential $22 million reduction in warehouse costs from fiscal Q4 2025, supported by ongoing rationalization initiatives targeting $100 million by 2027.
- India accounted for approximately one GW sold at $0.20/watt in the quarter, with management indicating the domestic market offers the "highest gross margin" within the company's portfolio (including 45X benefits).
- The South Carolina finishing facility is expected to process Series 6 modules from international plants and leverage Section 45X for tax credits, with operational start scheduled for 2026.
- Next-generation perovskite technology pilot line is slated for a 2027 launch in Perrysburg, with First Solar planning to validate field performance and durability before broader scale or tandem constructs.
- Policy outcomes for Section 232 tariffs remain a deciding factor for future Southeast Asian facility utilization, with potential outcomes ranging from full capacity operation to possible shutdown of international module manufacturing.
- Widmar said, "If Tesla chooses to use a TOPCon product that uses our IP, then we will enter into a commercial conversation with them and happily engage on licensing that IP," clarifying the company's patent strategy on TOPCon.
Industry glossary
- CdTe (Cadmium Telluride): A thin-film photovoltaic technology utilized by First Solar for high-temperature and humidity solar power generation.
- CURE: First Solar's next-generation module technology, designed to improve lifetime energy yield through enhanced bifaciality and durability profiles.
- TOPCon: Tunnel Oxide Passivated Contact; advanced crystalline silicon solar cell architecture referenced in relation to patent enforcement and competitive module imports.
- Section 45X: U.S. federal tax credit for domestic manufacture of eligible solar and clean energy components, including solar modules.
- ALMM: Approved List of Models and Manufacturers; an India policy mandating listed models and manufacturers for project eligibility and expected to be expanded with additional domestic content criteria.
- Section 232: U.S. trade regulation enabling tariffs on imports (notably steel and aluminum) where national security is a concern, significantly impacting international solar module trade and manufacturing strategy.
- FEOP: Foreign Entity of Concern Proposed Rulemaking; a proposed U.S. regulation affecting solar supply chain sourcing and project eligibility for incentives.
- Underutilization charges: Costs recorded due to unused manufacturing capacity when facilities operate below optimal throughput.
- Book-and-bill market: Sales model where production is contracted and recognized as revenue as goods are produced and delivered within the same reporting period, prevalent in India for First Solar.
Full Conference Call Transcript...
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