First Solar, Inc. (FSLR) | The Buildout — AI Infrastructure
The Verdict
First Solar designs and manufactures cadmium telluride thin-film photovoltaic modules in the United States and other locations, and is positioned as America's leading PV solar technology and manufacturing company. It supplies utility-scale solar projects, which makes it an indirect, AI-adjacent beneficiary of the power demand those projects serve, although the company does not disclose an AI-specific revenue stream.
| Market Cap | — |
| Revenue (TTM) | $5.4B |
| Revenue Growth | +23.8% |
| EBITDA Margin (TTM) | 47.9% |
| Net Cash | $1.7B |
| Earnings Beats | 2 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- U.S. plants ran at roughly 96% utilization in Q1 2026 and produced about 3 GW of modules.
- CuRe launch is complete in Perrysburg and the first Series 6 line is ramping; replication through H1 2028 supports up to $0.6B of technology-adjuster revenue.
- Contracted backlog stood at 47.9 GW / $14.4B as of March 31, 2026, with deliveries through 2030 and additional adjuster volume of 23.4 GW.
- FY2026 guidance was reaffirmed twice after a record Q1: net sales $1.04B, adjusted EBITDA $520M, and net cash $2.0B at the high end of the target range.
- South Carolina is expected to start production in H2 2026 and add 3.5 GW of U.S. finishing capacity by 2027.
What We’re Watching
- Section 232 implementation details after the Aug 6, 2026 action — rates, scope, grandfathering — could decide whether the remaining ~1.8–2 GW of Malaysia/Vietnam capacity restarts or faces potential shutdown.
- Further customer contract terminations after Q2 2026's 4% YoY revenue decline could pressure near-term revenue and backlog.
- U.S. booking ASP slipped from $0.364/W to $0.34–0.35/W; whether that reflects CuRe pricing embedded in base or demand weakness remains open.
- ITC Section 337 initial determination is due about 11 months and final about 15 months from the March 2026 institution.
The core thesis is intact: U.S. manufacturing is running near full utilization, CuRe has moved from plan to execution, and guidance has been reaffirmed twice. But the order book is contracting, with Q1 net bookings below 1x and Q2 revenue down on customer terminations, so the case is being tested on policy and contract quality rather than operational execution. The key open question is whether Section 232 and ITC outcomes convert waiting multi-gigawatt customers into bookings at prices that hold.
Earnings
Q2 2026 net sales were $1,056.2 million, down 4% year over year, driven by lower revenue from customer contract terminations and partially offset by increased module volume. Gross margin reached 57.3%, and EBITDA was $745.6 million, or 70.6% of revenue. Net income was $422.6 million.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $1.1B | $1.0B | $1.1B | −3.7% |
| Gross margin | 57.3% | 46.5% | 45.6% | +1170bps |
| EBITDA | $746M | $500M | $517M | +44.1% |
| EPS | $3.92 | $3.22 | $3.18 | +23.4% |
Management tone: No earnings call on record for the latest period.
Management Guidance
FY2026 guidance was reaffirmed on July 30, 2026. It calls for net sales of $4.9–5.2 billion, gross profit of $2.4–2.6 billion, and modules sold of 17.0–18.2 GW. The guide embeds $2.10–2.19 billion of Section 45X tax credits and $115–155 million of underutilization/ramp expense.
Trajectory
Quarterly revenue flattened in the first half of 2026, with $1,044.2 million in Q1 followed by $1,056.2 million in Q2; the Q2 figure was down 4% year over year on customer contract terminations, partially offset by higher module volume. Gross margin expanded sharply to 57.3% in Q2 from 46.5% in Q1, and EBITDA margin reached 70.6%. Code-computed context labels the revenue trajectory decelerating, while gross and EBITDA margins are expanding on higher 45X mix and lower logistics costs.
The Model
The model projects FY+1 revenue of $5,050 million and EBITDA of $2,525 million, a 50.0% margin. FY+2 revenue steps up to $6,200 million with EBITDA of $3,534 million, a 57.0% margin. The source material attributes potential upside to CuRe technology-adjuster revenue weighted to 2027–2028, South Carolina finishing capacity reaching 3.5 GW by 2027, and 2027 U.S. production forecast of 14.9–16.1 GW.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $5.2B | $5.0B | $6.2B |
| YoY Growth | — | −3.2% | +22.8% |
| EBITDA | $2.2B | $2.5B | $3.5B |
| EBITDA Margin | 42.6% | 50.0% | 57.0% |
Projections are the median of 5 independent model runs. The model’s revenue sits 4.7% above analyst consensus.
FY2026 guidance was reaffirmed on July 30, 2026. It calls for net sales of $4.9–5.2 billion, gross profit of $2.4–2.6 billion, and modules sold of 17.0–18.2 GW. The guide embeds $2.10–2.19 billion of Section 45X tax credits and $115–155 million of underutilization/ramp expense.
What Could Go Right — and Wrong
- Section 232 final rule lands with high rates and broad scope, restoring economics for the remaining ~1.8–2 GW of Southeast Asia capacity.
- ITC Section 337 yields a general exclusion order on infringing TOPCon imports, reducing c-Si competition in the U.S.
- CuRe adjuster revenue of up to $0.6B is recognized mostly in 2027–2028 as fleet replication completes.
- The customer M&A-linked 700 MW option converts within the next several quarters and adds incremental bookings.
- U.S. booking ASP holds around $0.35/W or better as waiting customers book after policy clarity.
- A weak or narrow Section 232 rule leaves Malaysia/Vietnam underutilized and triggers management's stated potential shutdown.
- Further customer contract terminations pressure revenue and the 47.9 GW backlog.
- U.S. booking ASP erodes further without the CuRe pricing-in-base explanation.
- CuRe replication slips, deferring up to $0.6B of technology-adjuster revenue.
- New U.S. c-Si capacity from Canadian Solar and T1 Energy in 2026–2027 reduces domestic scarcity.
Looking Ahead
The next twelve months hinge on trade-policy mechanics: the detailed Section 232 polysilicon rule following the August 6, 2026 announcement, Solar 4 AD/CVD final duties in September 2026, and FEOC rulemaking. On execution, South Carolina is expected to start production in H2 2026 and reach 3.5 GW of U.S. finishing capacity by 2027, while the perovskite pilot line and India CuRe launch are targeted for early 2027. The ITC Section 337 investigation should produce an initial determination about 11 months and a final decision about 15 months from March 2026.
- H2 2026Section 232 final rule details — Rates, scope, and grandfathering test SEA capacity restart or shutdown.
- H2 2026South Carolina production start — Tests U.S. finishing ramp toward 3.5 GW capacity by 2027.
- September 2026Solar 4 AD/CVD final duties — Final USDOC/ITC determinations affect competitor import pricing.
- Early 2027Perovskite pilot line operational — Tests next-generation technology readiness at up to 1 GW scale.
- Early 2027India CuRe launch — Tests ALMM compliance and India margin under efficiency thresholds.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $4.2B | $5.2B | $5.4B | +24.1% |
| Gross Margin | 45.2% | 41.5% | 44.0% | 372bps |
| EBITDA | $1.8B | $2.2B | $8.0B | +22.4% |
| EBITDA Margin | 43.2% | 42.6% | 47.9% | 58bps |
| Net Income | $1.3B | $1.5B | $1.7B | +18.3% |
| Free Cash Flow | −$308M | $1.2B | −$2.2B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)44.0%
- EBITDA Margin (TTM)47.9%
- Net Margin (TTM)32.5%
- ROIC17.0%
- FCF Conversion45.3%
- SBC / Revenue0.6%
The Company
First Solar designs and manufactures cadmium telluride (CdTe) thin-film photovoltaic modules, sold under the Series 6 Plus and Series 7 lines. The 10-K describes the company as America's leading PV solar technology and manufacturing company, the only U.S.-headquartered company among the world's largest solar manufacturers, and the largest thin-film PV module manufacturer and largest PV module manufacturer in the Western Hemisphere.
The company operates one reportable segment, the Modules Business, and runs owned and leased plants across Ohio, Malaysia, Vietnam, India, Alabama, Louisiana, and a South Carolina facility under construction expected to start operations in H2 2026. Management discusses the business geographically as U.S., India, and International (Malaysia/Vietnam), with a vertically integrated domestic footprint.
Business Segments
Competitive Landscape
First Solar positions itself as the leading U.S.-headquartered solar manufacturer and the largest thin-film module maker in the Western Hemisphere, competing against crystalline silicon TOPCon producers, many of which are subject to its patent enforcement. The source material also notes new U.S. cell and module capacity from Canadian Solar and T1 Energy arriving in 2026–2027, which narrows the domestic-manufacturer differentiation over time.
- Canadian SolarSued by FSLR in Delaware May 9, 2025 for TOPCon infringement; named ITC respondent. Supply-chain intelligence shows Canadian Solar adding U.S. c-Si cell/module capacity in 2026–2027.
- T1 EnergySupply-chain intelligence shows T1 Energy adding U.S. c-Si cell/module capacity in 2026–2027.
- JinkoSolarSued by FSLR in Delaware February 25, 2025 for TOPCon infringement; named ITC respondent.
- Widmar said if Tesla uses TOPCon it likely infringes FSLR IP; FSLR is open to licensing and would engage commercially.
- Hanwha QCellsNamed ITC respondent in the Section 337 petition; not otherwise discussed in the source material.
Supply Chain
First Solar sits between raw-material suppliers of cadmium telluride, tellurium, and substrate glass and utility-scale solar project owners and developers. Its only disclosed 10% customers are Silicon Ranch and NextEra Energy; many other downstream names are inferred, not documented.