FIRST SOLAR, INC.

First Solar, Inc. is America's leading PV solar technology and manufacturing company, the only U.S.-headquartered company among the world's largest solar manufacturers, and the world's largest thin film PV solar module manufacturer as well as the largest PV solar module manufacturer in the Western Hemisphere. The company operates in the photovoltaic solar energy industry, where solar energy is one of the fastest growing forms of renewable energy. Worldwide solar markets continue to develop and expand, driven by factors including the cost competitiveness of PV solar power systems and government incentive programs such as those enacted under the Inflation Reduction Act of 2022 as amended by the One Big Beautiful Bill Act of 2025. The U.S. currently has an installed solar generation capacity of approximately 266 GW, and in 2025 alone the U.S. installed over 30 GW of utility-scale solar capacity. India represents the third largest global market for PV solar energy with an installed solar generation capacity of approximately 132 GW, and the government has established aggressive renewable energy targets including increasing the country's overall renewable energy capacity to 500 GW by 2030.

First Solar's primary source of competition is crystalline silicon module manufacturers, the majority of which are linked to China. The company's differentiated technology, integrated manufacturing process, and tightly controlled supply chain help limit the risks associated with outsourcing and the multiple supply tiers of conventional crystalline silicon module manufacturing. First Solar also competes on its approach to responsible sourcing and supply chain due diligence, as allegations of forced labor in the Chinese solar supply chain have emerged. The company believes the solar industry may experience periods of structural imbalance between supply and demand, and estimates that in 2025 approximately 105 GW of capacity was added by solar module manufacturers, primarily in China. Module average selling prices in many global markets have declined, but recent module pricing in the United States, the company's primary market, has remained stable due in part to the rising demand for domestically manufactured modules as a result of the IRA, energy tax credit eligibility restrictions as amended by the OBBBA, and tariffs on modules imported into the United States.

First Solar's core business involves the design, manufacture, and sale of CdTe solar modules, which convert sunlight into electricity. The company generates revenue primarily through module sales priced on a per watt basis, with the majority of net sales coming from customers with projects in the United States. Customers include system developers, independent power producers, utilities, commercial and industrial companies, large corporate energy buyers, and other system owners and operators. During 2025, Silicon Ranch Corporation and NextEra Energy each accounted for 10% or more of the company's modules business net sales. The company's modules are produced using a fully integrated, continuous process that does not rely on Chinese crystalline silicon supply chains, and the company has sold more than 93 GW of modules worldwide since inception.

First Solar's current module semiconductor structure is a single-junction polycrystalline thin film that uses CdTe as the absorption layer. The company's Series 6 Plus module is a glass laminate approximately 4ft x 6ft in size, and its Series 7 module has a larger form factor of approximately 4ft x 7ft in size. At the end of 2025, the Series 6 Plus and Series 7 modules had an average power output of 464 watts and 532 watts, respectively. The company's CdTe solar technology provides a superior temperature coefficient, a superior spectral response in humid environments, a better partial shading response than competing crystalline silicon technologies, and immunity to cell cracking. First Solar typically warrants that its solar modules will produce at least 98% of their labeled power output rating during the first year, with the warranty coverage reducing by a degradation factor every year thereafter throughout the limited power output warranty period of up to 30 years. The company provides a limited PV solar module warranty covering defects in materials and workmanship for up to 12.5 years. First Solar holds two world records for CdTe PV cell efficiency, achieving an independently certified research cell efficiency of 23.1% and a module aperture area efficiency of 19.9%.

First Solar's global manufacturing footprint includes facilities in the United States, Malaysia, Vietnam, and India. During 2023, the company commenced production of Series 7 modules at its third manufacturing facility in Ohio and its first manufacturing facility in India. During 2024 and 2025, the company commenced production of Series 7 modules at its manufacturing facilities in Alabama and Louisiana, respectively. The company is in the process of expanding its domestic manufacturing capacity through the construction of its sixth U.S. manufacturing facility to onshore final production processes for modules initiated by its international fleet, which is expected to commence operations in the second half of 2026. The company recently expanded production of Series 7 modules at its first manufacturing facility in India, bringing total installed nameplate production capacity in the country to 3.2 GW. First Solar's recycling process recovers more than 90% of module materials for reuse, and the company has recycled more than 400,000 metric tons of PV modules to date. The company has established the industry's first global recycling program in 2005.

During 2025, First Solar produced 16.1 GW and sold 17.5 GW of solar modules. In June 2025 and July 2025, the company entered into two separate agreements for the sale of $701.9 million of Section 45X tax credits generated during 2025 for aggregate cash proceeds of $668.1 million, receiving the full cash proceeds during the year ended December 31, 2025. In October 2025, the company entered into two separate agreements for the sale of $699.7 million of Section 45X tax credits generated during 2025 for aggregate cash proceeds of $668.2 million, receiving initial cash proceeds of $573.0 million during the year ended December 31, 2025, and expecting to receive the remaining cash proceeds of $95.2 million during the first quarter of 2026. During 2025, the company terminated various master supply agreements with BP Solar Holding LLC and its affiliate Lightsource Renewable Energy Trading, LLC due to the customers' failure to cure several breaches of their contractual obligations, which triggered certain contractual termination payment provisions amounting to $384.6 million, of which the company recognized $61.0 million as revenue for advance payments previously received. In September 2025, First Solar filed a complaint in the Supreme Court of the State of New York seeking relief and demanding payment from these customers for the remaining termination payments of $323.6 million along with certain other receivables for solar modules previously delivered. The company also filed patent infringement lawsuits against JinkoSolar and Canadian Solar alleging infringement of certain U.S. TOPCon patents, and filed a petition with the USITC asserting that entities affiliated with multiple companies infringe a First Solar patent through the importation and sale of certain TOPCon solar products. In February 2026, the company terminated its existing $1.0 billion revolving credit facility and replaced it with a larger, $1.5 billion revolving facility.

Net sales for 2025 increased by 24% to $5.2 billion compared to $4.2 billion in 2024, driven primarily by an increase in the volume of modules sold to third parties. Gross profit as a percentage of net sales decreased 3.6 percentage points to 40.6% in 2025 from 44.2% in 2024, driven by higher costs related to a sales mix that included more U.S.-produced modules, higher warehousing costs, additional duties and tariff costs, and higher logistics charges, partially offset by the recognition of higher advanced manufacturing production credits under Section 45X of the IRC. Net income for 2025 was $1,528,229 thousand compared to $1,292,044 thousand in 2024. Diluted earnings per share were $14.21 in 2025 versus $12.02 in 2024. As of December 31, 2025, the company had $2.9 billion in cash, cash equivalents, and marketable securities compared to $1.8 billion as of December 31, 2024.

The company states that as of December 31, 2025, it had entered into contracts with customers for the future sale of 50.1 GW of solar modules for an aggregate transaction price of $15.0 billion, which it expects to recognize as revenue through 2030 as it transfers control of the modules to customers. This volume and transaction price exclude contracts with customers in India for which payment has not been fully secured. This volume includes contracts for the sale of 23.2 GW of solar modules with anticipated price adjustments for future module technology improvements, including enhancements to certain energy related attributes, which could result in additional revenue of up to $0.6 billion, the majority of which would be recognized in 2027 and 2028.

First Solar is focused on expanding its domestic manufacturing capacity in the United States, driven by rising demand for domestically manufactured modules as a result of the IRA, energy tax credit eligibility restrictions as amended by the OBBBA, and tariffs on modules imported into the United States. The company is in the process of expanding its domestic manufacturing capacity by approximately 4 GW, including the construction of its sixth U.S. manufacturing facility to onshore final production processes for modules initiated by its international fleet, which is expected to commence operations in the second half of 2026. The company anticipates its investment in this U.S. facility to be approximately $0.3 billion. In India, the company recently expanded production of Series 7 modules at its first manufacturing facility, bringing total installed nameplate production capacity in the country to 3.2 GW. The company is focusing on markets including the United States and India, where its CdTe solar modules provide advantages such as high insolation climates, humid environments, responsible sourcing, and supportive policy environments. The U.S. is expected to need significant new power generation capacity as domestic power demand is expected to increase up to 3.5% annually through 2040, a significant portion of which is expected to be driven by data center growth. In India, it is projected that installed solar energy generation capacity will be approximately 280 GW by 2030.

First Solar's CuRe program is intended to improve its current semiconductor structure by replacing copper with certain other elements that are expected to enhance module performance by improving its bifaciality characteristics, improving its temperature coefficient, and improving its warranted degradation. In late 2024, the company commenced a limited commercial production run of modules employing CuRe technology, and during the first half of 2025, it sold its first CuRe modules to customers. Beginning in the first quarter of 2026, the company intends to permanently convert one of its Ohio facilities to CuRe, followed by a phased replication of the technology across certain manufacturing facilities within its fleet. The company continues to research and develop its thin-film semiconductor technology with a focus on the use of perovskite thin films, supported by associates at its California and European Technology Centers, and is constructing a dedicated perovskite development line at its Ohio facility. The company also continues to evaluate opportunities to develop and leverage thin film tandem technologies.

First Solar's gross profit as a percentage of net sales decreased 3.6 percentage points to 40.6% in 2025 from 44.2% in 2024, primarily due to higher costs related to a sales mix that included more U.S.-produced modules, higher warehousing costs, additional duties and tariff costs, and higher logistics charges, partially offset by the recognition of higher advanced manufacturing production credits under Section 45X of the IRC. The company expects the advanced manufacturing production credit under Section 45X to provide a significant source of funding throughout its remaining period, which is available from 2023 to 2032, subject to phase down beginning in 2030. Based on the current form factor of its modules, the company expects to qualify for a credit of approximately 17 cents per watt for each module produced in the United States and sold to a third party. During 2025, the company recognized $1.6 billion of Section 45X credits as a reduction to cost of sales. The company expects its financial discipline and ability to manage operating costs to enhance its profitability as it continues to scale its business.

First Solar is in the process of expanding its domestic manufacturing capacity, including the construction of its sixth U.S. manufacturing facility to onshore final production processes for modules initiated by its international fleet, which is expected to commence operations in the second half of 2026. The company anticipates its investment in this U.S. facility to be approximately $0.3 billion. During 2026, the company expects to spend between $0.8 billion and $1.0 billion for capital expenditures, including the new facility, investments in various R&D initiatives, and upgrades to machinery and equipment. The company has committed and expects to continue to commit significant working capital to purchase various raw materials used in its module manufacturing process, and has entered into long-term supply agreements for the purchase of certain specified minimum volumes of substrate glass, with the right to terminate certain of these agreements upon payment of specified termination payments which in aggregate are up to approximately $300 million as of December 31, 2025 and decline over the remaining supply periods. As of December 31, 2025, the company had approximately 7,900 associates, the majority of which work in the United States, Malaysia, India, and Vietnam.

First Solar's capital allocation priorities include funding its module manufacturing and capacity expansion initiatives primarily using cash flows generated by its operations and by maintaining appropriate debt levels based on cash flow expectations. The company has never paid and does not expect to pay dividends on its common stock for the foreseeable future, and expects to prioritize working capital requirements, capacity expansion and other capital expenditure needs, R&D and technology investments, and merger and acquisition opportunities prior to returning capital to shareholders. Research and development expense was $233,421 thousand in 2025, compared to $191,375 thousand in 2024 and $152,307 thousand in 2023. The company has committed over $2 billion in cumulative R&D investments in the last 20 years. During 2026, the company expects to spend between $0.8 billion and $1.0 billion for capital expenditures. As of December 31, 2025, the company had availability under an unused $1.0 billion revolving credit facility, which was terminated in February 2026 and replaced with a larger, $1.5 billion revolving facility. The company has not declared or paid any dividends through December 31, 2025.

First Solar faces significant headwinds from structural imbalances in global supply and demand for PV solar modules, with the company estimating that in 2025 approximately 105 GW of capacity was added by solar module manufacturers, primarily in China. Module average selling prices in many global markets have declined, and the company has reduced production of Series 6 modules at its international manufacturing facilities due to a European market captured by Chinese solar modules, an Indian market effectively closed to Southeast Asian products, a general supply and demand imbalance for Southeast Asian products, and certain tariffs on modules imported into the United States. The company is subject to various tariffs, including IEEPA tariffs that applied to Vietnam (20%), India (25%), and Malaysia (19%), with an additional 25% tariff on India over its purchases of Russian oil resulting in an overall rate of 50%, though on February 20, 2026, the U.S. Supreme Court ruled the IEEPA tariffs unlawful and President Trump revoked them, imposing new global tariffs pursuant to Section 122 of the Trade Act of 1974 which provides for tariffs up to 15% for a period of no more than 150 days. The company also faces risks from China's export controls on tellurium and products containing tellurium, which are key raw materials in its CdTe module production process, as well as from the ALMM in India which may increase minimum efficiency requirements beginning in 2027.

First Solar faces regulatory and policy uncertainty, particularly regarding the continued availability of benefits under the IRA as amended by the OBBBA. The OBBBA, signed into law on July 4, 2025, significantly curtails the availability of certain energy tax credits, including accelerating the termination of the clean electricity ITC and PTC in relation to solar and restricting tax credits if a taxpayer employs certain products and components produced by a supplier with ties to a FEOC. The OBBBA also severely limits Section 45X tax credit eligibility for products manufactured by, or with material assistance from, a FEOC. Under the OBBBA and related U.S. Treasury and IRS guidance, utility-scale solar projects generally must begin construction by early July 2026 to remain eligible for the 45Y or 48E credits. The company also faces risks from the potential imposition of tariffs or import restrictions from Section 232 investigations into processed critical minerals, polysilicon, and robotics and industrial machinery, as well as from the AD/CVD petitions filed against solar products from Cambodia, Malaysia, Thailand, and Vietnam, with final AD/CVD rates ranging from de minimis to over 3,400%.

First Solar faces intense competition from crystalline silicon module manufacturers, many linked to China, which may have access to sovereign capital enabling them to operate at minimal or negative margins for sustained periods, and the solar industry may experience structural imbalances between supply and demand that lead to pricing volatility. The company's net sales and profits are subject to variability based on government subsidies and tax incentives, and the OBBBA enacted in July 2025 significantly curtailed the availability of certain energy tax credits, including accelerating the termination of the clean electricity ITC and PTC and limiting Section 45X credit eligibility for products manufactured by or with material assistance from a FEOC. The company is exposed to tariffs and trade remedies, including IEEPA tariffs that applied to Vietnam (20%), India (25%), and Malaysia (19%), and an additional 25% tariff on India, though these were revoked on February 20, 2026 and replaced with new global tariffs under Section 122 of the Trade Act of 1974 providing for tariffs up to 15% for up to 150 days. The company has identified manufacturing issues affecting certain Series 7 modules that may cause premature power loss, with a reasonable estimate of aggregate remaining losses ranging from approximately $35 million to $75 million, and recorded a specific warranty liability of $50 million as of December 31, 2025. The company's key raw materials, including CdTe, tellurium, and substrate glass, are single-sourced or sourced from a limited number of suppliers, and China's export controls on tellurium and products containing tellurium could disrupt supply chains. The company's substantial international operations expose it to risks including unfavorable political, regulatory, labor, and tax conditions, and the company is subject to potential impairment of international manufacturing facilities if trade policies or tariffs adversely affect their operational status.

Management's message emphasizes First Solar's position as America's leading PV solar technology and manufacturing company, focused on competitively and reliably enabling power generation needs with its advanced thin film PV technology. Key themes include the company's proprietary advanced module technology, its manufacturing process and distributed manufacturing presence, its localized supply chain that does not rely on Chinese crystalline silicon supply chains, its R&D capabilities, its commitment to responsible solar, and its financial stability. Management highlights that the company has sold more than 93 GW of modules worldwide and has over $2 billion in cumulative R&D investments in the last 20 years. Management notes that net sales for 2025 increased by 24% to $5.2 billion compared to $4.2 billion in 2024, and that the company produced 16.1 GW and sold 17.5 GW of solar modules during 2025. Management states that the company is in the process of expanding its domestic manufacturing capacity by approximately 4 GW, including the construction of its sixth U.S. manufacturing facility expected to commence operations in the second half of 2026. Management also notes that the company expects to spend between $0.8 billion and $1.0 billion for capital expenditures during 2026. Management emphasizes the company's commitment to creating long-term shareholder value through a decision-making framework that delivers a balance of growth, profitability, and liquidity.