First Solar, Inc. Announces Third Quarter 2024 Financial Results

October 29, 2024

Net sales of $0.9 billion
Net income per diluted share of $2.91, impacted by $50 million product warranty reserve charge
Net cash balance of $0.7 billion
YTD net bookings of 4.0 GW; 0.4 GW since second quarter earnings call
Expected sales backlog of 73.3 GW

TEMPE, Ariz.–(BUSINESS WIRE)–First Solar, Inc. (Nasdaq: FSLR) (the “Company”) today announced financial results for the third quarter ended September 30, 2024.

Net sales for the third quarter were $0.9 billion, a decrease of $0.1 billion from the prior quarter. The decrease was primarily driven by a decrease in the volume of MW sold and a product warranty reserve charge, partially offset by termination payments from certain customers in the U.S. and India.

The Company reported third quarter net income per diluted share of $2.91, compared to net income per diluted share of $3.25 in the second quarter of 2024.

Cash, cash equivalents, restricted cash, restricted cash equivalents, and marketable securities, less debt at the end of the third quarter, decreased to $0.7 billion from $1.2 billion at the end of the prior quarter. The decrease was primarily driven by capital expenditures associated with our new U.S. factories in Alabama and Louisiana along with an increase in working capital.

“As we approach the end of 2024, we remain pleased with the progress made across our business, navigating against a backdrop of industry volatility and political uncertainty, with a continued focus on balancing growth, profitability, and liquidity,” said Mark Widmar, CEO of First Solar. “We expect that our disciplined, long-term approach will allow us to work through the outcomes of the upcoming US elections as well as the continued volatility across the solar manufacturing industry.”

Our 2024 guidance has been updated as follows:

	Prior	Current
Net Sales	$4.4B to $4.6B	$4.10B to $4.25B
Gross Margin (1)	$2.0B to $2.1B	$1.95B to $2.00B
Operating Expenses (2)	$455M to $485M	$445M to $475M
Operating Income (3)	$1.5B to $1.6B	$1.48B to $1.54B
Earnings per Diluted Share	$13.00 to $14.00	$13.00 to $13.50
Net Cash Balance (4)	$0.6B to $0.9B	$0.5B to $0.7B
Capital Expenditures	$1.8B to $2.0B	$1.55B to $1.65B
Volume Sold	15.6GW to 16.3GW	14.2GW to 14.6GW

——————————
(1)		Assumes $60 million to $75 million of ramp costs and $1.02 billion to $1.05 billion of Section 45X tax credits
(2)		Assumes $70 million to $80 million of production start-up expense
(3)		Assumes $130 million to $155 million of production start-up expense and ramp costs, and $1.02 billion to $1.05 billion of Section 45X tax credits
(4)		Defined as cash, cash equivalents, restricted cash, restricted cash equivalents, and marketable securities, less expected debt at the end of 2024

The guidance figures presented above are forward-looking statements that are subject to a variety of assumptions and estimates, including with respect to certain factors related to the Inflation Reduction Act of 2022 (the “IRA”). Among other things, such factors include (i) the total Section 45X tax credit and (ii) the timing and ability to monetize such credit. Investors are encouraged to listen to the conference call and to review the accompanying materials, which contain more information about First Solar’s third quarter 2024 financial results, 2024 guidance, and financial outlook.

Conference Call Details

First Solar has scheduled a conference call for today, October 29, 2024, at 4:30 p.m. ET, to discuss this announcement. A live webcast of this conference call and accompanying materials are available at investor.firstsolar.com. A replay of the webcast will be available on the Investors section of the Company’s website approximately two hours after the conclusion of the call and remain available for 30 days.

About First Solar, Inc.

First Solar is a leading American solar technology company and global provider of responsibly produced eco-efficient solar modules advancing the fight against climate change. Developed at research and development labs in California and Ohio, the Company’s advanced thin film photovoltaic (“PV”) modules represent the next generation of solar technologies, providing a competitive, high-performance, lower-carbon alternative to conventional crystalline silicon PV panels. From raw material sourcing and manufacturing through end-of-life module recycling, First Solar’s approach to technology embodies sustainability and a responsibility towards people and the planet. For more information, please visit www.firstsolar.com.

For First Solar Investors

This release contains forward-looking statements which are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements in this release, other than statements of historical fact, are forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning: demand for our technology; increased research and development investment; new domestic and international capacity coming online; production and delivery of our modules; anticipated claims under our limited product warranty obligations and any related remediation commitments; our financial guidance for 2024, including future financial results, net sales, gross margin, operating expenses, operating income, earnings per diluted share, net cash balance, capital expenditures, expected earnings cadence, volume sold, shipments, bookings, products and our business and financial objectives for 2024; the availability of benefits under certain production linked incentive programs, and the impact of the IRA including the total advanced manufacturing production credit available to us under Section 45X of the Internal Revenue Code. These forward-looking statements are often characterized by the use of words such as “estimate,” “expect,” “anticipate,” “project,” “plan,” “intend,” “seek,” “believe,” “forecast,” “foresee,” “likely,” “may,” “should,” “goal,” “target,” “might,” “will,” “could,” “predict,” “continue,” “contingent” and the negative or plural of these words and other comparable terminology. Forward-looking statements are only predictions based on our current expectations and our projections about future events and therefore speak only as of the date of this release. You should not place undue reliance on these forward-looking statements. We undertake no obligation to update any of these forward-looking statements for any reason, whether as a result of new information, future developments or otherwise. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by our forward-looking statements. These factors include, but are not limited to: structural imbalances in global supply and demand for PV solar modules; our competitive position and other key competitive factors; the market for renewable energy, including solar energy; the reduction, elimination, expiration or introduction of government subsidies, policies, and support programs for solar energy projects; the impact of public policies, such as tariffs or other trade remedies imposed on solar cells and modules; the passage of legislation intended to encourage renewable energy investments through tax credits, such as the IRA; the impact of the IRA on our expected results of operations in future periods, which may be affected by technical guidance, regulations, subsequent amendments or interpretations of the law; interest rate fluctuations and both our and our customers’ ability to secure financing; changes in the exchange rates between the functional currencies of our subsidiaries and other currencies in which assets and liabilities are denominated; our ability to execute on our long-term strategic plans; the loss of any of our large customers, or the ability of our customers and counterparties to perform under their contracts with us; our ability to execute on our solar module technology and cost reduction roadmaps; the performance of our solar modules upon installation; our ability to improve the wattage of our solar modules; our ability to incorporate technology improvements into our manufacturing process, including the production of bifacial solar modules and the implementation of our Copper Replacement (“CuRe”) program; the satisfaction of conditions precedent in our sales agreements; our ability to attract new customers and to develop and maintain existing customer and supplier relationships; general economic and business conditions, including those influenced by U.S., international, and geopolitical events; environmental responsibility, including with respect to cadmium telluride (“CdTe”) and other semiconductor materials; claims under our limited warranty obligations; changes in, or the failure to comply with, government regulations and environmental, health, and safety requirements; effects arising from and results of pending litigation; future collection and recycling costs for solar modules covered by our module collection and recycling program or otherwise as required by laws and regulations; supply chain disruptions; our ability to protect our intellectual property; our ability to prevent and/or minimize the impact of cybersecurity incidents including breaches or outages of our information systems; our continued investment in research and development; the supply and price of components and raw materials, including CdTe; our ability to construct new production facilities to support new product lines in line with anticipated timing; evolving corporate governance and public disclosure regulations and expectations, including with respect to environmental, social and governance matters; our ability to avoid manufacturing interruptions, including during the ramp of our manufacturing facilities; our ability to attract and retain key executive officers and associates; the severity and duration of public health threats, including the potential impact on our business, financial condition, and results of operations; and the matters discussed under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our most recent Annual Report on Form 10-K, as supplemented by our other filings with the Securities and Exchange Commission.

FIRST SOLAR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)

	September 30, 2024			December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	1,005,130		$	1,946,994
Marketable securities		264,691			155,495
Accounts receivable trade, net		762,138			660,776
Government grants receivable, net		6,659			659,745
Inventories		1,250,629			819,899
Other current assets		528,856			391,900
Total current assets		3,818,103			4,634,809
Property, plant and equipment, net		5,326,121			4,397,285
Deferred tax assets, net		237,868			142,819
Restricted marketable securities		211,130			198,310
Government grants receivable		871,745			152,208
Goodwill		29,585			29,687
Intangible assets, net		56,645			64,511
Inventories		269,675			266,899
Other assets		615,766			478,604
Total assets	$	11,436,638		$	10,365,132
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	265,320		$	207,178
Income taxes payable		98,446			22,134
Accrued expenses		520,835			524,829
Current portion of debt		208,261			96,238
Deferred revenue		645,050			413,579
Other current liabilities		44,253			42,200
Total current liabilities		1,782,165			1,306,158
Accrued solar module collection and recycling liability		139,035			135,123
Long-term debt		373,321			464,068
Deferred revenue		1,320,331			1,591,604
Other liabilities		228,138			180,710
Total liabilities		3,842,990			3,677,663
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value per share; 500,000,000 shares authorized; 107,057,732 and 106,847,475 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively		107			107
Additional paid-in capital		2,892,407			2,890,427
Accumulated earnings		4,869,994			3,971,066
Accumulated other comprehensive loss		(168,860	)		(174,131	)
Total stockholders’ equity		7,593,648			6,687,469
Total liabilities and stockholders’ equity	$	11,436,638		$	10,365,132

FIRST SOLAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)

	Three Months Ended									Nine Months Ended
	September 30, 2024			June 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
Net sales	$	887,668		$	1,010,482		$	801,090		$	2,692,258		$	2,160,049
Cost of sales		442,357			511,593			424,915			1,402,055			1,361,403
Gross profit		445,311			498,889			376,175			1,290,203			798,646
Operating expenses:
Selling, general and administrative		46,293			46,560			50,172			138,680			140,528
Research and development		50,197			51,937			41,190			144,876			108,445
Production start-up		26,822			27,451			12,059			69,681			54,930
Litigation loss		—			430			—			430			35,590
Total operating expenses		123,312			126,378			103,421			353,667			339,493
Gain on sales of businesses, net		—			—			211			1,115			329
Operating income		321,999			372,511			272,965			937,651			459,482
Foreign currency loss, net		(5,158	)		(9,649	)		(987	)		(17,665	)		(11,586	)
Interest income		22,580			24,599			23,254			74,424			74,102
Interest expense, net		(9,008	)		(9,765	)		(3,734	)		(27,983	)		(5,897	)
Other expense, net		(3,071	)		(565	)		(1,033	)		(6,435	)		(1,492	)
Income before taxes		327,342			377,131			290,465			959,992			514,609
Income tax expense		(14,386	)		(27,775	)		(22,067	)		(61,064	)		(33,071	)
Net income	$	312,956		$	349,356		$	268,398		$	898,928		$	481,538

Net income per share:
Basic	$	2.92		$	3.26		$	2.51		$	8.40		$	4.51
Diluted	$	2.91		$	3.25		$	2.50		$	8.36		$	4.49
Weighted-average number of shares used in per share calculations:
Basic		107,049			107,042			106,834			107,015			106,795
Diluted		107,562			107,525			107,498			107,514			107,326

FIRST SOLAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

	Nine Months Ended September 30,
		2024			2023
Cash flows from operating activities:
Net income	$	898,928		$	481,538
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, amortization and accretion		299,079			218,303
Share-based compensation		21,987			23,209
Deferred income taxes		(85,343	)		(46,053	)
Gain on sales of businesses, net		(1,115	)		(329	)
Other, net		3,238			393
Changes in operating assets and liabilities:
Accounts receivable, trade		(68,823	)		(385,046	)
Inventories		(434,375	)		(262,665	)
Government grants receivable		(59,181	)		(429,744	)
Other assets		(183,127	)		(126,073	)
Income tax receivable and payable		35,708			(16,809	)
Accounts payable and accrued expenses		(8,953	)		121,382
Deferred revenue		(13,159	)		472,934
Other liabilities		2,139			(9,889	)
Net cash provided by operating activities		407,003			41,151
Cash flows from investing activities:
Purchases of property, plant and equipment		(1,212,537	)		(1,039,863	)
Purchases of marketable securities and restricted marketable securities		(2,014,764	)		(3,220,467	)
Proceeds from sales and maturities of marketable securities		1,897,997			3,996,439
Acquisitions, net of cash acquired		—			(35,739	)
Other investing activities		(12,617	)		—
Net cash used in investing activities		(1,341,921	)		(299,630	)
Cash flows from financing activities:
Proceeds from borrowings under debt arrangements, net of issuance costs		227,654			307,214
Repayment of debt		(205,821	)		—
Payments of tax withholdings for restricted shares		(20,144	)		(31,100	)
Contingent consideration payment and other financing activities		(7,568	)		—
Net cash (used in) provided by financing activities		(5,879	)		276,114
Effect of exchange rate changes on cash, cash equivalents, restricted cash, and restricted cash equivalents		(2,805	)		(855	)
Net (decrease) increase in cash, cash equivalents, restricted cash, and restricted cash equivalents		(943,602	)		16,780
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of the period		1,965,069			1,493,462
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of the period	$	1,021,467		$	1,510,242
Supplemental disclosure of noncash investing and financing activities:
Property, plant and equipment acquisitions funded by liabilities	$	264,480		$	185,064
Proceeds to be received from asset-based government grants	$	159,490		$	152,458
Acquisitions funded by contingent consideration	$	11,000		$	18,500