First Solar, Inc.

FSLR · NASDAQ · USD

Can First Solar keep earning wide margins from its US manufacturing base and domestic-content premium once the Section 232 and foreign-ownership rules are finally settled?

Last 4 earnings calls · through Q2 FY2026

Bull case

  • Contracted backlog covers years

    The bull case rests on a contracted backlog that covers several years of deliveries, so revenue depends on building and shipping modules rather than on finding new buyers.

  • Domestic content and trade enforcement

    Trade enforcement and domestic content rules raise the value of US-made modules to developers who need the bonus, and First Solar sits on the right side of both.

  • Hyperscaler demand for firm supply

    Data center owners signing very large projects prize delivery certainty, which steers demand toward a domestic manufacturer with committed capacity and a long track record.

  • CuRe and perovskite roadmap

    CuRe raises lifetime energy yield and supports price adjusters written into contracts, while perovskite work targets a lower-cost next generation of thin film.

Bear case

  • Policy delays hold back bookings

    The bear case is that buyers will not sign until tariff and foreign-ownership rules settle, so bookings keep trailing shipments and the backlog shrinks each quarter.

  • Profit depends on tax credits

    Profit leans heavily on federal manufacturing tax credits, and without them the module business earns a thin margin with little room for cost inflation or price cuts.

  • Customer defaults and litigation

    Large utility and oil company buyers have walked away from signed contracts, forcing litigation and write-downs and showing that counterparty promises are not always firm.

  • Idle Southeast Asia capacity

    Malaysia and Vietnam run far below capacity while their future waits on trade policy, and that idle cost lands on the income statement every quarter.

Bull and bear points

Growth & Execution

In short: Contracted volume covers years of deliveries, but new bookings wait on unresolved tariff and ownership rules.

Bull · 2

  • Backlog of 45.1 gigawatts covers deliveries through 2030

    Management says the backlog extends deliveries through the end of the decade, so near-term revenue and pricing are largely fixed rather than dependent on a soft spot market.

    Q2 FY2026 call

  • Hyperscaler projects add roughly 5 gigawatts of announced demand

    Data center buyers signing very large projects need modules that arrive on schedule, and those deals are going to First Solar rather than to import-dependent rivals.

    Q2 FY2026 call
Bear · 2

  • Section 232 decision keeps slipping past guidance

    Management said the tariff ruling would land in the second quarter; on the latest call it would not commit to August or September, so the bookings it unlocks keep sliding.

    Tone shiftQ1 FY2026 → Q2 FY2026

  • New bookings run well below modules sold

    First Solar keeps shipping more than it signs, so the contracted cushion thins out each quarter even before any customer walks away from an agreement.

    Q1 FY2026 call

Profitability & Financial Strength

In short: Reported margins are wide but depend on tax credits, while idle overseas plants and tariffs add cost.

Bull · 2

  • Gross margin reached 57% in the second quarter

    Higher US volume qualifying for 45X and lower freight lifted margin 11.7 points year over year, though a one-time tariff recovery flattered the quarter.

    Q2 FY2026 call

  • Free cash flow of $1.5 billion as capital spending falls

    Cash generation now exceeds the cost of building capacity, so South Carolina and the perovskite work can be funded internally while net cash stays above the reserve management targets.

    Filed financials
Bear · 2

  • Excluding 45X credits, module gross margin is about 7%

    Management attributes the gap to tariffs, idle overseas plants and warehousing, and expects contracted price adjusters to close it only in later years.

    Q4 FY2025 call

  • Company stopped guiding to earnings per share

    Management previously gave a full-year earnings per share range; for 2026 it guides only to adjusted EBITDA, which makes it harder to see what reaches common shareholders.

    Tone shiftQ3 FY2025 → Q4 FY2025

Market Position

In short: Trade enforcement favors First Solar's domestic supply chain, but large buyers and warranty claims carry risk.

Bull · 2

  • Trade actions raise costs for imported crystalline silicon

    Solar 4 duties, foreign-entity restrictions and the Section 232 review make China-linked modules harder to buy, which pushes developers toward a supply chain that is already domestic.

    Q4 FY2025 call

  • US selling prices moved from target to booked reality

    In late 2025 managers pointed to just above $0.36 a watt as the level they were holding out for; recent US bookings have cleared at about that price with adjusters included.

    Tone shiftQ3 FY2025 → Q2 FY2026
Bear · 2

  • BP affiliates defaulted on 6.6 gigawatts of contracts

    First Solar is suing for termination payments those buyers did not make, and other European oil majors have also been pulling capital out of US renewables development.

    Q3 FY2025 call

  • Series 7 warranty claims and a BP counterclaim

    First Solar carries a warranty liability for defective Series 7 modules made before 2025, and BP's counterclaim alleges broader plant underperformance that could widen the dispute.

    Q4 FY2025 call