First Solar Earnings: Profit Up, Guidance Falls

First Solar Inc. (FSLR) reported on Feb. 24, 2026, that 2025 sales, earnings per share (EPS), and adjusted EBITDA rose, but its 2026 guidance fell short of consensus. The company attributed the narrower revenue outlook to U.S. tariffs, higher warehousing costs, and selective contracting.

2025 Results and Backlog

The company reported full-year 2025 net sales of $5.2 billion, a 24% increase from $4.2 billion in 2024. Third-party module shipments rose 24% to 17.5 gigawatts, and contracted backlog at year-end reached 50.1 gigawatts, valued at about $15.0 billion.

In the fourth quarter, net sales were $1.7 billion, up $0.1 billion sequentially and 11% from the prior-year quarter. Full-year diluted EPS rose to $14.21 from $12.02, while fourth-quarter EPS increased to $4.84 from $4.24. Gross margin improved to 40% in the fourth quarter from 38% the prior quarter, though full-year margin declined to 41% from 44% in 2024 due to tariff and warehousing cost pressures.

Adjusted EBITDA for 2025 was $2.4 billion, reflecting reported EBITDA of $2.1 billion plus $1.6 billion in Section 45X tax credits, up from about $1.0 billion in 2024. Year-end net cash totaled $2.4 billion, up from $1.5 billion at the end of the third quarter, supported by $2.1 billion in operating cash flow and monetization of the credits. Gross bookings in 2025 totaled 7.4 gigawatts, while debookings reached 8.3 gigawatts, a net decline of 0.9 gigawatts attributed to customer contract breaches. Recent U.S. utility bookings were about 1.0 gigawatt at roughly $0.364 per watt, including adders.

2026 Guidance and Tariffs

First Solar set 2026 net sales guidance at $4.9 billion to $5.2 billion, below consensus near $6.1 billion. The company cited higher U.S. panel prices linked to tariffs, warehousing costs, and selective contracting as factors narrowing the top line.

Management projected adjusted EBITDA of $2.6 billion to $2.8 billion for 2026 and guided first-quarter adjusted EBITDA to $400 million–$500 million on expected sales of 3.4–4.0 gigawatts. It forecast module volume sold in 2026 of 17.0–18.2 gigawatts, implying an inventory draw compared with anticipated production.

The company estimated a 2026 gross margin near 49.5%, including expected Section 45X credits of $2.1 billion to $2.2 billion and $115 million to $155 million in ramp and underutilization costs. It modeled average selling prices of about $0.308 per watt in the U.S. and $0.287 per watt globally. The net tariff cost was projected at $155 million to $175 million (about $125 million to $135 million net of recoveries), plus roughly $200 million in warehousing expenses.

Capital spending for 2026 was guided to $0.8 billion to $1.0 billion, with year-end net cash expected between $1.7 billion and $2.3 billion. Management noted the outlook depends on U.S. political and trade conditions and said it is pursuing selective contracting to secure pricing and delivery certainty. Executives detailed tariff impacts and the near-term outlook during the post-close earnings call.

The company also cited preliminary Commerce Department countervailing-duty rates in the "Solar IV" segment—about 81% for Laos, 126% for India, and 104% for Indonesia—and referenced pending antidumping procedures with final determinations due by September 2026. It noted a potential International Trade Commission intellectual property probe on an 18-month timeline, the administrative withdrawal of an Auxin antidumping/countervailing duty appeal, and interim Foreign-Exchange Operations Committee guidance from Treasury.

First Solar established a new $1.5 billion senior unsecured revolving credit facility.

Upcoming Milestones

Antidumping rates are expected in April 2026, with final determinations by September. The company also plans to repay its India Development Finance Corporation facility by June 30, 2026.