First Solar Q2 2025 Earnings Report

First Solar EPS Results

• Actual EPS: $3.18
• Consensus EPS: $2.68
• Beat/Miss: Beat by +$0.50
• One Year Ago EPS: $3.25

First Solar Revenue Results

• Actual Revenue: $1.10 billion
• Expected Revenue: $1.03 billion
• Beat/Miss: Beat by +$69.35 million
• YoY Revenue Growth: +8.60%

First Solar Announcement Details

• Quarter: Q2 2025
• Date: 7/31/2025
• Time: After Market Closes
• Conference Call Date: Thursday, July 31, 2025
• Conference Call Time: 4:30PM ET

First Solar (NASDAQ:FSLR), a solar technology company, provides photovoltaic (PV) solar energy solutions in the United States, France, Japan, Chile, and internationally. The company manufactures and sells PV solar modules with a thin film semiconductor technology that provides a lower-carbon alternative to conventional crystalline silicon PV solar modules. It designs, manufactures, and sells cadmium telluride solar modules that converts sunlight into electricity. The company's residual business operations include project development activities, operations and maintenance services, and the sale of PV solar power systems to third-party customers. It serves developers and operators of systems, utilities, independent power producers, commercial and industrial companies, and other system owners. The company was formerly known as First Solar Holdings, Inc. and changed its name to First Solar, Inc. in 2006. First Solar, Inc. was founded in 1999 and is headquartered in Tempe, Arizona.

First Solar Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Q2 Earnings Beat: First Solar reported 3.6 GW of module sales, exceeding guidance, and delivered $3.18 EPS, above the high end of its range.
• Positive Sentiment: U.S. Capacity Expansion: The Alabama ramp continued and the Louisiana site completed commissioning, targeting over 14 GW U.S. nameplate capacity by 2026.
• Positive Sentiment: Advantaged Policy: New reconciliation legislation preserves 45X credits for domestic manufacturing and restricts foreign assistance, strengthening First Solar's U.S. competitive position.
• Negative Sentiment: Tariff and Trade Uncertainty: Ongoing ADCVD investigations and reciprocal tariffs on India, Malaysia and Vietnam create mixed tariff outcomes, prompting guidance range widening and potential margin pressure.
• Neutral Sentiment: Order Pipeline: Backlog stood at 61.9 GW ($18.5 B) after 1.1 GW de-bookings, with mid–late stage pipeline of 20.1 GW and over 2 GW of July bookings driven by safe-harbor demand.

Presentation

[Operator]

Good afternoon, and welcome to First Solar's Second Quarter twenty twenty five Earnings Call. Today's call is being webcast live on the Investors section of First Solar's website at investor.firstsolar.com. All participants are in a listen only mode. And please note that today's call is being recorded. I would now like to turn the conference over to your host, Byron Jeffers, Head of Investor Relations. Please go ahead, sir.

[Byron Jeffers, VP - Finance, Treasury & IR at First Solar]

Good afternoon. Thank you for joining us on today's earnings call. Joining me today are our Chief Executive Officer, Mark Whitmar and our Chief Financial Officer, Alex Bradley. During this call, we will review our financial performance for the quarter and discuss our business outlook for the remainder of 2025. Following our remarks, we will open the call for questions.

[Byron Jeffers, VP - Finance, Treasury & IR at First Solar]

Before we begin, please note that some statements made today are forward looking and involve risks and uncertainties that could cause actual results to differ materially from management's current expectations. We undertake no obligation to update these statements due to new information or future events. For a discussion of factors that could cause these results to differ materially, please refer to today's earnings press release and our most recent annual report on Form 10 ks as supplemented by our other filings with the SEC, including our most recent quarterly report on Form 10 Q. You can find these documents on our website at investor.firstsolar.com. With that, I'm pleased to turn the call over to our CEO, Mark Whitmar. Mark?

[Mark Widmar, CEO at First Solar]

Good afternoon and thank you for joining us today. Beginning on slide three, I will share some key highlights from Q2 twenty twenty five. We recorded 3.6 gigawatts of module sales during the quarter above the midpoint of what we forecasted on the previous earnings call. Our Q2 earnings per diluted share came in above the high end of our guidance range at $3.18 per share. From a manufacturing standpoint, we produced 4.2 gigawatts in Q2 with 2.4 gigawatts produced from our U.

[Mark Widmar, CEO at First Solar]

S. Facilities and 1.8 gigawatts from our international facilities. We progressed our domestic capacity expansion during the quarter continuing to ramp up at our Alabama facility. As of today, equipment installation and commissioning at our Louisiana site is complete. We have begun the integrated production run and expect to complete plant qualification in October.

[Mark Widmar, CEO at First Solar]

Once fully ramped, the facility is projected to boost our U. S. Nameplate manufacturing capacity to over 14 gigawatts by 2026. As it relates to technology, we have seen further improvements regarding our CURE technology platform from both the performance and the manufacturability standpoint over the course of the quarter. Recent field data from deployed CURE modules continues to validate the enhanced energy profile expected from the improved temperature response and bifaciality of CURE.

[Mark Widmar, CEO at First Solar]

This field data is consistent with the superior degradation rate that we have seen through laboratory accelerated life testing. In addition, progress continued during the quarter at our new perovskite development line located at our Perrysburg campus. The line on track for full inline runs in August is expected to produce small form factor modules featuring a perovskite semiconductor. We have continued to timely meet our internal metrics for our perovskite development program, including the achievement of initial stage efficiency, stability and manufacturability objectives. We are pleased with the progress we are making towards commercializing our perovskite technology over the next several years.

[Mark Widmar, CEO at First Solar]

Finally, we are proud to have published our annual corporate responsibility report yesterday. This report highlights First Solar's efforts to lead the way in strengthening support for Solar by leveraging and extending our differentiation. As noted in the report, our vertical integration drives resource efficiency, enabling our products to deliver up to five times greater energy return on investment than crystalline silicon panels made from components manufactured in China. This not only supports our nation's energy independence, it helps unleash American energy dominance. We also continue to achieve and surpass key metrics.

[Mark Widmar, CEO at First Solar]

For example, 2024 marked the second straight year that we have nearly doubled the volume of water we recycle, conserving resources in water scarce regions. We continued our focus on reducing waste, diverting 88% of waste from disposal and increasing recycling, recovering a global average of 95% of materials from recycled panels. These are among just a few of the highlights of our approach to responsible corporate stewardship that can be found in the report, which is available through our website. Turning to slide four, I would like to focus on The current U. S.

[Mark Widmar, CEO at First Solar]

Policy and trade environment. From an industrial policy standpoint, earlier this month, the President signed the new reconciliation legislation that we believe places First Solar in a greater position of strength than it was following the passage of the Inflation Reduction Act of 2022. As it relates to Section 45X advanced manufacturing tax credits, under this new law, key provisions for solar were maintained and new restrictions severely limit 45X eligibility for products manufactured by or with material assistance from foreign control foreign entities of control or FIAX, such as Chinese solar manufacturers. These restrictions address one of the biggest loopholes under the IRA, and we expect these fiat provisions will factor into capital commitment decisions for U. S.

[Mark Widmar, CEO at First Solar]

Manufacturing by our Chinese competitors. In our view, it is not unreasonable to expect there will be limited Chinese solar manufacturing in The US in the foreseeable future, which together with other recent industrial policy and trade developments that I will discuss momentarily, may reduce the supply of domestic content. Turning to the investment tax credit. The legacy PTC and ITC, which support Project Safe Harbor by the 2024 and require place in service by year end 2028 remains unchanged by the new legislation. We expect that these projects will proceed as scheduled, thereby strengthening the resiliency of our existing contracted backlog.

[Mark Widmar, CEO at First Solar]

We have a strong contracted position for our U. S. Production through 2028, which we believe coupled with the current policy environment creates a strategic foothold to integrate our international supply with U. S. And potentially create a U.

[Mark Widmar, CEO at First Solar]

S. Finishing line to leverage our Series six and Series seven international assets. In addition, the provisions in the reconciliation legislation relating to the new technology neutral investment and production tax credits, potentially incentivize near term demand for new bookings with deliveries through the end of this decade. There are three reasons for this potential demand catalyst. Firstly, under the new tech neutral credits, projects that commenced construction prior to July 2026 will have a required place in service deadline by the 2030, thereby potentially incentivizing new procurement to safe harbor projects through 02/1930.

[Mark Widmar, CEO at First Solar]

Secondly, projects that commence construction starting 01/01/2026 are subject to the new FIOC material assistance restrictions in order to be eligible for the tech neutral credits. And thirdly, projects that have not commenced construction before 06/16/2025 will be required to meet increasing domestic content thresholds should they seek to qualify for the related bonus. While there remains uncertainty around the structure and scope of the forthcoming begin construction guidance pursuant to a recent executive order, we expect this guidance will be consistent with long standing rules. Note, the same executive order also mandates the development of Fiat guidance. Focusing on the threat to national security by making The United States dependent on supply chains controlled by foreign adversaries.

[Mark Widmar, CEO at First Solar]

As indicated earlier, these new demand drivers also potentially support a business case to establish one or more lines in The United States to finish front end production initiated within our an international fleet. Leveraging existing overseas capital assets and our skilled workforce for front end production combined with new back end factories in The U. S. Could enable additional near term fiat free supply for The U. S.

[Mark Widmar, CEO at First Solar]

Market as well as improve the gross margin profile of our sales by reducing tariff charges and logistics costs associated with importing finished modules. Moving from industrial policy to trade policy, we continue to see evidence that pursuing antidumping and countervailing duty or ADCVD cases, while time consuming and expensive, is effective at addressing illegal trade practices, imports of cells and modules from Cambodia, Malaysia, Thailand and Vietnam, which were subject of the Solar three AD CBD case, meaningfully decreased in the January 2025 period as compared to the equivalent period in 2024. However, trade data also demonstrates an influx of cells and modules imported into The U. S. From other countries. As the Chinese crystalline silicon industry continues to move production to circumvent existing trade laws.

[Mark Widmar, CEO at First Solar]

Against this backdrop, the Alliance for American Solar Manufacturing and Trade, a distinct but similar coalition from that which launched Solar three AVD case, ADCVD case directed at Cambodia, Malaysia, Thailand and Vietnam has filed a new ADCVD petition with the U. S. International Trade Commission and the U. S. Department of Commerce seeking investigations into the violation of trade laws by Chinese owned companies operating through entities in Laos and Indonesia as well as Indian headquartered companies, which we believe utilize a Chinese subsidized supply chain.

[Mark Widmar, CEO at First Solar]

Separately, the Department of Commerce has made the decision to self initiate a Section two thirty two investigation into imports of polysilicon and its derivatives. While the scope of derivatives is unclear, this could implicate downstream pricing for polysilicon based products such as wafer, cells, or modules, introducing a new source of uncertainty for those relying on Chinese tied crystalline silicon procurement. The scope of the investigation includes many of the strategic vulnerabilities created by China's dominance of the polysilicon production, such as the risk posed by over concentrated supply chains, subsidy fueled mandatory trade practices, systematic overcapacity and the potential for export restrictions by U. S. Adversaries. In addition, we are encouraged by recently available, though not broadly publicized data regarding the processing of cell and module entries by the U.

[Mark Widmar, CEO at First Solar]

S. Customs and Border Protection or CBP that were imported during the Biden administration's June 2022 to June 2024 solar moratorium. As a reminder, the moratorium provided a ADCVD duty free treatment for Southeast Asia imports if the entries were were both circumventing the China solar ADCVD orders and were utilized in projects no later than December 2024. The US government recently reported that approximately 44,000 entries were processed during the moratorium window and that more than half, roughly 24,000 entries did not qualify for the moratorium and remain subject to the application of ADCVD tariffs. The government reports that it is taking multiple approaches to collect duties on these imports.

[Mark Widmar, CEO at First Solar]

The remaining approximately 20,000 continue to be under manual CBB review, which could take several months to complete and may become subject to the application of these tariffs. In short, despite the Biden's administration ill advised enforcement suspension, no single entry has yet been closed with the benefits of the tariff moratorium and all remain subject to potential ADCVD tariff payments, representing potentially significant contingent liabilities for the importers of record of these foreign produced crystalline silicon modules. We applaud CPP for the thorough entry by entry process they are running. Our determination to advocate for strong industrial policy represented by the new reconciliation legislation is matched by our commitment to employ the rule of law to help create a level playing field for domestic manufacturers. As we have long stated, we are supportive of free trade and international competition so long as this trade is also fair and within the constructs of the law.

[Mark Widmar, CEO at First Solar]

Unfortunately, in our industry, China relentlessly engages in unfair, in our view, illegal trade practices, leaving us no choice but to seek the enforcement of existing law that are designated to address these practices. This respect for the rule of law also underpins our effort to enforce our Top Gun patent portfolio against potential infringements. For example, following our previously announced filing of a complaint against various JinkoSolar entities alleging infringement of our U. S. Top Gun patents.

[Mark Widmar, CEO at First Solar]

During the quarter, we filed a similar lawsuit against various Canadian Solar entities. These actions reflect our intention to actively enforce our intellectual property rights against companies that we believe are infringing upon our long standing Topcon technology patents. In summary, our policy, trade and legal efforts can be viewed as a consistent three pronged approach. Firstly, a dedicated commitment to continuously advocate for strong industrial policies that enable domestic solar manufacturers in the face of a foreign adversary seeking to dominate critical aspects of The US energy supply chain. Secondly, a commitment to employ the rule of law against the industrial representation of those adversaries who seek to violate our trade laws.

[Mark Widmar, CEO at First Solar]

And thirdly, a commitment to employ the rule of law to enforce long established principles of intellectual property rights protection. As discussed during our previous earnings call, we are not immune from adverse effects related to trade policy. Later in the call, Alex will address the impact of the global tariff measures on our international production capacity considerations as well as on our bill of material costs. That said, notwithstanding these headwinds, together with the uncertainty related to the executive order mentioned earlier, as well as the potential implications for the recent Department of Interior directive ordering secretary's approval of many renewable project development activities, we believe that the recent policy and trade development have on balance strengthens First Solar's relative position in the solar manufacturing industry. As illustrated on slide five, at a broader macro level, we believe the long term position of the utility scale solar industry as a whole remains strong, given significantly increasing demand for electricity and the ability of solar generation to meet this demand.

[Mark Widmar, CEO at First Solar]

As we stated previously, American leadership in AI, cryptocurrency, and reshorred manufacturing needs abundant cost competitive electricity generation. Absent new generating capacity coming online quickly, there are risk of not being enough electricity to power strategically important industries to their full potential before the current administration ends. Given its attributes of low cost and high speed to deployment relative to other sources of energy generation, solar should clearly be a significant part of the near term solution mix. This argument is supported by numerous recent support recent reports. For example, in June, Lazard, the most recent levelized cost of energy report demonstrates that utility scale PV is cost competitive with conventional forms of energy generation, including natural gas and nuclear.

[Mark Widmar, CEO at First Solar]

This fact does not consider the practicalities of the typical natural gas project development timeline, which requires approximately five years to complete, assuming it is untethered by supply chain constraints or the availability of pipeline infrastructure or nuclear projects which take about twice as long and creates a potential supply chain strategic vulnerability requiring sourcing uranium from Russia and China. We believe that on a fundamental basis with its cost competitive energy and faster time to power profile, the case for utility scale solar generation is compelling regardless of the policy environment. This case is underpinned by the role that utility scale solar can play alongside energy storage as a viable, reliable, cost competitive complement to the eventual scale up in nuclear power generation capacity. Utility scale solar has also been shown to help lower electricity prices, dampening the effects of inflation while supporting grid reliability and helping utilities navigate peak demand in extreme conditions. Lowering the likelihood of blackouts, Utility Scale Solar is mission ready today to help power the key pillars of economic growth, which we believe places First Solar, a utility scale leader in a position of strength. And I'll turn the call over to Alex to discuss shipments, bookings, Q2 financials and guidance.

[Alex Bradley, CFO at First Solar]

Thanks, Mark. Beginning on Slide six, as of 12/31/2024, our contracted backlog totaled 68.5 gigawatts valued at $20,500,000,000 or approximately $0.02 $99 per watt. Through Q2, we recognized 6.5 gigawatts in sales. We continued our disciplined approach to new bookings, strategically leveraging the strength of our customer backlog amid the policy uncertainty that continued during the quarter and limited pricing visibility. As a result, we recorded 0.9 gigawatts of gross bookings in the first half of the year.

[Alex Bradley, CFO at First Solar]

Offsetting this, we recorded 1.1 gigawatts of de bookings driven by contract terminations, resulting in net de bookings of 0.2 gigawatts through 06/30/2025. Notably, 0.9 gigawatts of the de bookings were related to our Series six international product were recorded in our Q2 results. As a result, our quarter end contracted backlog stood at 61.9 gigawatts valued at $18,500,000,000 or approximately $0.02 $99 per watt. As a reminder, a significant portion of this contracted backlog includes pricing adjusters that provide the opportunity to increase the base ASP contingent on meeting specific milestones within our current technology roadmap by the time of delivery. These figures exclude such potential adjustments, including additional changes tied to module bin, freight overages, commodity price shifts, committed wattage, U.

[Alex Bradley, CFO at First Solar]

S. Content volumes and tariff change. Following the enactment of the recent reconciliation bill, we saw an increase in customer engagement, resulting in 2.1 gigawatts of new bookings as customers pursued near term opportunities. Of this total, approximately 1.4 gigawatts was Series six international product, 0.9 gigawatts of which was recontracted volume that was previously terminated in Q2. Including the associated termination payments, this recontracted volume was effectively sold at approximately $0.33 per watt.

[Alex Bradley, CFO at First Solar]

The remaining 0.7 gigawatts of the 2.1 gigawatts was contracted at approximately $0.32 per watt excluding the impact of adjusted in India domestic sales. As of today, our total contracted backlog stands at 64 gigawatts. While demand for our U. S. Manufactured products remain strong, we continue to face an under allocation of Series six production from our Malaysia and Vietnam facilities.

[Alex Bradley, CFO at First Solar]

This imbalance initially resulted from customers exercising contractual delivery shift rights out of 2025 due to policy uncertainty and has more recently been exacerbated by increased tariff pressure. These factors contributed to the termination of a portion of our Series six international backlog this quarter. Of our total 64 gigawatt backlog, approximately 11 gigawatts consist of international Series six products. Of that, approximately 10.1 gigawatts is planned for sale into The U. S, with the vast majority under contracts that include circuit breaker provisions designed to mitigate tariff exposure as referenced in our previous earnings call.

[Alex Bradley, CFO at First Solar]

Accordingly, the inclusion of tariff mitigation provisions in our contract serves as a strategic safeguard, enabling us to proactively manage and limit potential gross margin erosion should tariff related impacts not be resolved through customer engagement. Beyond these immediate drivers and contractual mitigants, we also continue to observe indicators of a broader strategic shift among multinational oil and gas and power utilities companies, particularly those headquartered in Europe, away from renewable project development and back towards fossil fuel investments. Moving to slide seven, our total pipeline of mid to late stage booking opportunities remain strong, with booking opportunities of 83.3 gigawatts and mid to late stage booking opportunities of 20.1 gigawatts. Our mid to late stage pipeline includes 3.9 gigawatts of opportunities that are contracted subject to conditions precedent. As a reminder, signed contracts in India will not be recognized as bookings until we've received full security against the offtake.

[Alex Bradley, CFO at First Solar]

Turning to slide eight, I'll cover our second quarter financial results. We recognized 3.6 gigawatts of module sales, including 2.3 gigawatts from our U. S. Manufacturing facilities. This resulted in second quarter net sales of £1,100,000,000 an increase of £300,000,000 from the first quarter.

[Alex Bradley, CFO at First Solar]

The increase was primarily driven by an anticipated increase in shipment volumes and stronger demand for domestically produced modules. Our second quarter results included 63,000,000 in contract termination payments tied to 1.1 gigawatts of volume with $50,000,000 related to 0.9 gigawatts of Terminator Series six international volume. Note this 1.1 gigawatts of Terminator volume represented only less than 2% of our contracted backlog as of second quarter end. Gross margin for the quarter was 46%, up from 41% in Q1. The increase was primarily driven by higher contract termination revenue, a greater proportion of modules sold from our facilities, which are eligible for Section 45X tax credits.

[Alex Bradley, CFO at First Solar]

These factors were partially offset by increased detention and demurrage charges, higher core costs associated with the sales mix weighted towards U. S. Produced modules and a change in Section 45X credit valuation between periods. The sale of a portion of these credits through an agreement with a leading financial institution combined with our expectation to sell the majority of credits generated in 2025 resulted in a cumulative $29,000,000 reduction to cost of sales, reflecting the anticipated value of the remaining credits generated through Q2. As an update on warranty related matters, we did not incur any new warranty charge this quarter related to the Series seven modules affected by prior manufacturing issues.

[Alex Bradley, CFO at First Solar]

As of the end of Q2, we continue to hold approximately 0.7 gigawatts of potentially impacted Series seven inventory. We're making continued progress in reaching settlement agreements that impacted Series seven modules from our initial production consistent with our disclosed warranty range. SG and A, R and D and production start up expenses totaled $138,000,000 in the second quarter, reflecting an increase of approximately $15,000,000 as compared to the first quarter. The primarily driver of this increase was production start up costs associated with the ramp up of our Louisiana facility. Additional one time expenses included broker fees related to the sale of and legal costs tied to the previously disclosed SEC Division of Enforcement Investigation.

[Alex Bradley, CFO at First Solar]

And we're pleased to report that the SEC has concluded its inquiry into First Solar and the staff does not intend to recommend any enforcement action against the company. Operating income for the quarter was $362,000,000 which included $125,000,000 in depreciation, amortization and accretion, dollars 15,000,000 in ramp and underutilization costs, dollars 31,000,000 in production startup expense and $7,000,000 in share based compensation. Non operating income resulted in a net expense of $9,000,000 in the second quarter, representing a decline of approximately $5,000,000 as compared to the prior quarter. This was primarily driven by lower interest income as a result of the decrease in investable cash, cash equivalents and marketable securities. Tax expense for the second quarter was $10,000,000 compared to $8,000,000 in the first quarter.

[Alex Bradley, CFO at First Solar]

This increase was primarily driven by change in pretax income and the jurisdictional mix of such income. And this resulted in second quarter earnings of $3.18 per diluted share. Turning to slide nine, I'd to discuss select balance sheet items and summary cash flow information. As of the end of Q2, our total balance of cash, cash equivalents, restricted cash, restricted cash equivalents and marketable securities was £1,200,000,000 an increase of approximately £300,000,000 from the prior quarter. This increase was primarily driven by the sale of certain of our Section 45X tax credits generated in the first half of twenty twenty five.

[Alex Bradley, CFO at First Solar]

Furthermore, as disclosed in our Form eight ks filed yesterday, on July 28, we entered into a new tax credit transfer agreement to sell up to $391,000,000 of Section 45 tax credits, generating up to approximately $373,000,000 in proceeds. Transaction instruction in three installments with approximately £124,000,000 received in connection with closing and the remaining payments expected in the 2025. This transaction further demonstrates the liquidity of the 45X credit market and the proceeds will continue to support our near term working capital and capital expansion priorities. The quarterly increase in accounts receivable was primarily driven by higher sales volumes with approximately two thirds of our quarterly revenue being recognized in June resulting in back end weighted receivables. As of quarter end, total overdue balances stood at approximately $394,000,000 This includes a previously negotiated settlement with the customer following a payment default, which deferred payments to Q4, which $93,000,000 remains outstanding with interest payments being current and made on schedule.

[Alex Bradley, CFO at First Solar]

Also included is $70,000,000 in cumulative uncollected receivables related to customer termination payments. These overdue termination related receivables correspond to approximately 1.8 gigawatts of canceled volume. Such cases were actively pursuing litigation arbitration to enforce our contractual rights and recover the payments owed. Inventory balances increased by $121,000,000 consistent with expectations, reflecting the back loaded revenue profile tied to continuous production throughout the year to fulfill contracted commitments. We anticipate our working capital position to improve throughout the year as our module shipment and sale profile increases relative to production, inventories decline, we continue to collect on our accounts receivable.

[Alex Bradley, CFO at First Solar]

While they remain contractually due, overdue termination payments are expected to remain outstanding pending resolution of arbitration and litigation proceedings. Expenses totaled £288,000,000 in the second quarter, primarily driven by investments on our U. S. Facility in Louisiana, where we've begun the integrated production run and expect to complete plant qualification in October. Our net cash position increased by approximately £200,000,000 to £600,000,000 as a result of the aforementioned factors.

[Alex Bradley, CFO at First Solar]

Before we turn to our updated financial outlook, I'd to revisit the key assumptions informing our current guidance in light of recent policy and trade developments. These include tariff related impacts on anticipated international module sales volumes and associated logistics costs. As outlined on Slide 10, our prior guidance was based on a binary set of tariff policy scenarios, each with distinct operational and financial implications. The upper end of our guide, we assume the continuation of the universal tariff regime through year end 2025, applying a 10% tariff and maintaining the suspension of country specific reciprocal tariffs, excluding China. The lower end reflected the same baseline, but incorporate the impact of reciprocal tariffs taking effect as of July 9 with rates of 26% for India, 24% from Malaysia and 46% for Vietnam.

[Alex Bradley, CFO at First Solar]

Our revised guidance incorporates the anticipated implementation of recently negotiated tariffs of 25% for Malaysia and 20% for Vietnam. So related to India, our revised guidance incorporates the previously announced reciprocal tariff rate of 26% for India and does not incorporate the President's announcement yesterday of a 25% rate plus an unquantified penalty for India's purchase of military equipment and energy from Russia. Our volume sold out with The U. S. Manufactured modules remains unchanged at 9.5 gigawatts to 9.8 gigawatts.

[Alex Bradley, CFO at First Solar]

Our forecasted sales from our India manufacturing entity remains unchanged. Combined with an increase at the low end of the Series six international range, we now forecast international module sales of 7.2 gigawatts to 9.5 gigawatts, for total module sales of 16.7 gigawatts to 19.3 gigawatts. The international volume sold range remains wide reflects both uncertainty and opportunity related to the outcome of tariff cost discussions with customers, the Section two thirty two action related to polysilicon and its derivatives, FeOQ related restrictions and the Solar IV ADCBD investigation. In the event of customer terminations resulting from an inability or unwillingness to absorb tariff impacts on our international product, we plan to address the resulting supply demand imbalance through additional curtailments, including the potential temporary idling of production. As such, the lower end of our guidance range reflects increased underutilization period costs and the associated loss margin tied to these volume assumptions.

[Alex Bradley, CFO at First Solar]

Accordingly, this curtailment strategy is not assuming incremental costs related to warehousing detention demurrage or other logistics associated with internationally produced modules. It's important to note that certain indirect or currently unknown costs related to these tariffs, including potential restructuring charges or asset impairments, are excluded from the guidance provided today. As it relates to tariff impact, based on a doubling of Section two thirty two tariffs on aluminum and steel from 25% to 50%, as well as updated rates applicable to other imports, including substrate glass and interlayer, we anticipate a full year production cost impact from tariffs of approximately 70,000,000 We forecast approximately 80,000,000 to £130,000,000 in tariffs on finished goods imports, net of contractual recoveries from customers. It's important to note that without tariff recovery, international module sales may be dilutive to earnings. As such, the ability to recover tariffs is a key factor in our production and sales volume guidance.

[Alex Bradley, CFO at First Solar]

If we are unable to effectively negotiate these recoveries, we may further reduce international Series six production below current assumptions, which would result in an additional underutilization charge. As utilization charges related to running our international Series six production below full production capacity with under absorption costs accounted for as period expenses, our forecast total approximately 95,000,000 to $180,000,000 for the full year. Additionally, non standard freight, warehousing, detention, demurrage and other logistics related costs have increased approximately $100,000,000 to $400,000,000 for the full year. This increase was driven by several factors accelerated imports ahead of the July 9 and subsequently revised August 1 tariff implementation dates, shorter ocean freight transit times, which led to an earlier than expected port arrivals, Q2 customer terminations of Series six international products, lower than forecasted Series six international sales resulting in a short notice inventory buildup and ongoing efforts to avoid anticipated Section three zero one tonnage fees on Chinese built vessels beginning in Q4. Lastly, although our forecast value of twenty twenty five Section 5x tax credits generated remains unchanged, our updated guidance now assumes the sale of these credits from all but one of our U.

[Alex Bradley, CFO at First Solar]

S. Facilities. The remaining facility, we plan to utilize the credit to offset taxable income and claim any residual benefit via direct pay. Accordingly, we've reduced the projected value of Section 45 tax credits in our guidance by approximately 75,000,000 I'll now cover the full year 2025 guidance ranges on Slide 11. Our net sales guidance is between 4,900,000,000.0 and £5,700,000,000 which includes an unchanged range of U.

[Alex Bradley, CFO at First Solar]

S. Manufactured volume and India manufactured volume sold, updated narrow range of international Series six volumes sold and includes contract termination revenue of $63,000,000 recognized in our Q2 results. Gross margin is expected to be between 2,050,000,000.00 and $2,350,000,000 or approximately 42%, which includes approximately 1,580,000,000.00 to $1,630,000,000 Section 45X tax credits, dollars 95,000,000 to $180,000,000 of ramp and underutilization costs, dollars 80,000,000 to $130,000,000 of tariffs on finished goods imports and $70,000,000 of tariffs on billet material imports. SG and A expense is expected to total 185,000,000 to $195,000,000 and R and D is expected to total $230,000,000 to $250,000,000 SG and A and R and D combined expense is expected to total $415,000,000 to $445,000,000 Total operating expenses, includes 65,000,000 to $75,000,000 of production start up expense are expected to be between $480,000,000 and $520,000,000 Operating income is expected to range between 1,530,000,000.00 and £1,870,000,000 implying an operating margin range of approximately 32%. This guidance includes £160,000,000 to £255,000,000 in combined ramp and utilization and plant startup costs, as well as approximately $1,580,000,000 to $1,630,000,000 in Section 45X credits, net of the anticipated loss associated with the sale of these credits.

[Alex Bradley, CFO at First Solar]

This results in a full year 2025 earnings per diluted share guidance range of $13.5 to $16.5 the midpoint of which is unchanged from our previous guidance. Notwithstanding the approximately $0.70 of impact to forecasted diluted EPS from our updated guidance now assuming the sale of 20 25 secondtion. X credits from all but one of our U. S. Facilities.

[Alex Bradley, CFO at First Solar]

From an earnings cadence perspective, we anticipate module sales of five to six gigawatts for the third quarter with $390,000,000 to £425,000,000 in Section 45X credits resulting in earnings per diluted share between 3.3 and $4.7 Capital expenses for 2025 remain consistent with prior guidance expected to range between 1,000,000,000 and £1,500,000,000 Our year end 2025 net cash balance is anticipated to be between 1,300,000,000.0 and 2,000,000,000 Turning to slide 12, I'll summarize the key messages from today's call. Our Q2 earnings per diluted share came in above the high end of our guidance range at $3.18 per share, primarily due to customer contract termination payments and a favorable mix of U. S. Versus international products sold within the quarter. Our forecast for U.

[Alex Bradley, CFO at First Solar]

S. Produced volumes sold remains unchanged for the year. In the near term, ongoing trade policy uncertainty, particularly around the tariff regime, has introduced challenges that were not anticipated at the start of the year and have persisted and continuously evolved throughout. We've updated our guidance to reflect the expected impact of the most recent proposed tariffs other than the present indication yesterday of a potential penalty rate applying to India and our current outlook on their implications. We know that the midpoint of our diluted EPS guidance remains unchanged even with the approximately $0.70 impact of forecast diluted EPS in our updated guidance, which assumes the sale of twenty twenty five secondtion point of ex credits from one of our U.

[Alex Bradley, CFO at First Solar]

S. Facilities. Looking ahead, we are on balance pleased with the overall industrial and trade policy environment that emerged over recent weeks. We continue to remain confident in the long term outlook for U. S.

[Alex Bradley, CFO at First Solar]

Dollar energy demand and First Solar's continued leadership underpinned by a vertically integrated manufacturing platform, domestic supply chain, non FiOQ profile and proprietary TADTEL technology. Demand for our U. S. Manufactured product remains strong and our updated outlook continues to reflect the potential long term resilience of our Series six international product contingent on The U. S.

[Alex Bradley, CFO at First Solar]

Market's ability to adapt amid ongoing policy and trade uncertainty. With that, we conclude our prepared remarks and open the call for questions. Operator?

[Operator]

Thank you, sir. We'll take our first question today from Brian Lee from Goldman Sachs.

[Brian Lee, Vice President at Goldman Sachs]

Thanks for taking the questions here. Kudos on the nice execution. I think, obviously, there's going be a lot of focus here on what seems to be incremental improvement in the bookings environment as well as some expansion in kind of your pricing power based on some of the numbers you rattled off. So maybe just digging into that bit. So your two plus gigawatts bookings just in the month of July, presumably pent up demand waiting for OBBBA to get through to the finish line.

[Brian Lee, Vice President at Goldman Sachs]

What kind of run rate bookings kind of are you seeing real time? Like what can we read into the two plus gigawatts of bookings just in the month of July? And then maybe as a follow-up just on the pricing side, $0.32 to $0.33 per watt depending on which portion of the bookings you're talking about, A couple pennies higher, several pennies higher than what you had been run rating at. What does that reflect? Is that ADCVD?

[Brian Lee, Vice President at Goldman Sachs]

Is it Fiat? Is it domestic content entitlement? Like how much of that is actually being captured already? And and what do you think could still be, you know, part of that that pricing picture as you, you know, move through the next couple of quarters and into into 26? Thanks, guys.

[Mark Widmar, CEO at First Solar]

Alright. Thanks, Brian. I'll take that. Look. First off, I would say that we're we're still learning.

[Mark Widmar, CEO at First Solar]

We're kind of feeling our way around in terms of what's happening in the market and what are the implications around around pricing. Clearly, after July 4 when the bill was signed, we had a lot of inbounds, lot of questions, lot of inquiries. A lot of people are trying to think through their their safe harbor strategy. And what's really nice when you think about what what what we already had safe harbor largely was through '28. Okay?

[Mark Widmar, CEO at First Solar]

And really robust demand for that period of window. Now with the kinda where we are right now, you've got a window now that will take that that activity all the way out through 2030. Right? So another two more years of safe harbor. You know, contingent and, depending on what ultimately happens to the executive order.

[Mark Widmar, CEO at First Solar]

It's given us a nice the industry a nice runway to move forward, you know, to the end of this decade, which is what we all love to have in terms of long term visibility and certainty. The when we when we look at the individual drivers and trying to translate that into what's what sort of created the ongoing engagement, I would argue this in the bookings we saw in July, it's a little bit of everything. Some of it is wanting to safe harbor for projects that would then be completed in 2029. Some of it is you call it Fiat or you could call it '80 CBD related and we had a large volume of if the bookings was related to a customer who had already committed volume or believe they had committed volume from a Chinese supplier. And that Chinese supplier reneged on that volume, and that volume was actually needed in kind of the 26 time frame.

[Mark Widmar, CEO at First Solar]

And so they needed to react very quickly in order to recover and get a certainty of a supply chain available. And we were able to leverage kind of the opportunistic de booking that we saw in the quarter plus some inventory position we had on international volume to in order to fulfill that requirement for that for that particular customer. So I would say there's still good momentum. You know, I was talking with our chief commercial officer today and we got a number of deals near term that we would expect to close that, you know, that could add add up to, you know, another gigawatt here near term. So we're encouraged.

[Mark Widmar, CEO at First Solar]

We're gonna continue to sort of feel our way through it, and we'll do a little price discovery and kind of see where everything settles in. But as we said, we've done a lot here to try to best position this market and to address a level playing field and we think we're finally getting into that position and we think there's opportunity for additional price. In terms of our average ASPs, we'll have to sort of discover where that ultimately lands, we're encouraged with what we're seeing right now.

[Operator]

Moving on to Mark Strouse from JPMorgan.

[Mark Strouse, Executive Director at JP Morgan]

Yes. Good afternoon. Thanks for taking our questions. Just going back to the last point, Mark, on some of your customers that are contracted out through year end twenty twenty eight. To the extent that there is a negative change in the I'm sorry, in safe harbor language from the executive order, can you just talk about kind of the percentage of that backlog that could potentially be at risk that it's contractually open for them to cancel?

[Mark Widmar, CEO at First Solar]

Thank you. So first off, I just wanna make sure we're we're clear on one thing. The executive order was not intended to address the section, forty eight and forty five ITC and PTC, that was safe harbor at the '24. And from that point in time, we have four calendar years in order to complete and build your project and put place them in service. So that executive order shouldn't have any impact relative to the legacy section 48 and section 45.

[Mark Widmar, CEO at First Solar]

The intent of the executive order was to focus on the tech neutral ITC, PTC, and to focus on a couple of different things. One is to ensure there's true substance and appropriate guidance as it relates to what determines commence construction, and there's a couple different ways to do that. One is through committing 5% or so of the CapEx of a project or implementing physical activities at the project or at the site, physical work. So that those those are being looked at to provide definition and guidance. You know, the but the reconciliation bill alluded to that, a need for guidance.

[Mark Widmar, CEO at First Solar]

I think the guidance was originally to be placed out no later than 2026. Executive order came out after the bill was signed saying, hey, we want that closer dated. So it, you know, it has a effectively a forty five day window, which I think goes out to August 18 where that guidance is to be provided or notice of guidance. It also has some fee out provisions in there as well. So it's not just to address the commence construction, it's also to address some of the fee out provisions and to effectively ensure that the investments that we're making, know, we're not tethering back into, you know, nations that could be adversaries such as, you know, Russia and China and others.

[Mark Widmar, CEO at First Solar]

So the 48 legacy as it relates then to our project contracted backlog that carries through '28 should be unaffected by whatever comes out through the executive order. But the opportunity is what are the catalysts going beyond that and that is the new new tech neutral guidance, which will have some clarity around definition for for, commence construction in Fiat. But assuming that those are all, amenable and manageable by, the market, then now we have a new window that we can continue to book out and see strong demand through 2029 into 2030 which we think is highly encouraging from that standpoint.

[Operator]

The next question today comes from Praneeth Satish, Wells Fargo.

[Praneeth Satish, Analyst at Wells Fargo]

Thanks. Yes. So in terms of the bookings in July, looks like it included Series six and recontracted volumes. But it doesn't look like you've tapped into your 2027 and beyond U. S.

[Praneeth Satish, Analyst at Wells Fargo]

Series seven capacity yet. And so should we interpret that to mean that pricing in that $0.32 to $0.33 range just isn't compelling enough for you to commit your zero two seven to zero two zero capacity? I mean, you mentioned you've got one gigawatt of bookings here in advanced stages. So kind of putting two and two together here, should we assume that at a minimum, you're trying to look for some price discovery, above $0.32 $0.33 And maybe just as a follow-up to that, I mean, why even sell capacity at these levels? You've got the section two thirty two, polysilicon probe underway.

[Praneeth Satish, Analyst at Wells Fargo]

And if that's successful in its full intent, it could really boost pricing. So maybe if you could just kind of talk through that that rationale.

[Mark Widmar, CEO at First Solar]

Yeah. So so you're you're right. A good a good percentage of the, the bookings that we had in July were for s six international. And really even the the bookings through the first half of the year, you know, we had, call it 1.2 gigawatts or something like that and slightly less than half of it was was international product. And so as we think about, okay, how do we wanna position the product and knowing the backdrop of everything that's going on around us and how do we ensure maybe getting what we think is full entitlement for for the product.

[Mark Widmar, CEO at First Solar]

What I like about some of the safe harbor so let me let me back up first before I go. If I look at the series six that we recontracted, to me, that was a great transaction with a great price. And to clear out the inventory that was largely sitting either in a warehouse or sitting in a port and incurring d and d, charges because the customer, defaulted on that obligation. So I wanted to get that inventory cleared as as quickly as possible. So this inventory, while it won't be deployed until 2026 with the customer, it is actually they're taking ownership and it is going to their warehouse and I'm not incurring any cost.

[Mark Widmar, CEO at First Solar]

And that's that's pretty important and pretty critical for us. We gotta get that warehousing and d and d cost down in particular. The other thing I like about the feathering in some safe harbor, taking some of the safe harbor volume that that we did in July is under the new, forty eighty tech tech neutral. The safe harbor requirements and the tech neutral, either investment credit tax credit or production tax credit has to be done at the inverter level. Okay?

[Mark Widmar, CEO at First Solar]

Now once I once I committed to some percentage of a project, right, I think I have in a very strong position to capture the balance of that opportunity. So as you as you think about it right now, if we safe harbor 200 megawatts, if you kind of do the math, that potentially creates two to three gigawatts of opportunity of follow-up. Right? Because it's going to be very difficult to take our technology at the inverter level and try to blend it with crystalline silicon. We have different voltages and you can't and string lengths and everything else.

[Mark Widmar, CEO at First Solar]

It's very, very difficult and costly. So I'm looking at look. If I can take some near term safe harbor, seed those projects and then create a follow on opportunity for the balance of that, that's a good thing for us to do. And I do fully take your comments about, yes, the we we very much are appreciative of the self initiated February case and poly and the associated derivative. So that obviously could be another catalyst for us.

[Mark Widmar, CEO at First Solar]

So we're being very selective in that regard. But I do think what we did here near term with the bookings was to be very strategic. And I do like doing some safe harboring that allows me to be better positioned for follow on volumes when those projects ultimately get built.

[Operator]

Philip Shen from Roth Capital Partners has the next question.

[Philip Shen, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Hey, guys. Thanks for taking the questions. A few here. Just as a follow-up on the pricing. The prior questioner talked about the $2.32.

[Philip Shen, MD & Senior Research Analyst at Roth Capital Partners, LLC]

There's also what we've read about, which is the ramping UFLPA reinforcement. And so that's yet another potential catalyst. So, Mark, as you think through pricing, I mean, if international is at this $0.32 level, domestic content must be I mean, I gotta imagine high thirties is is possible. So wondering if you can comment on that at all. And then how much inventory might be left in the warehouse?

[Philip Shen, MD & Senior Research Analyst at Roth Capital Partners, LLC]

And then finally, as it relates to capacity expansion, now that we're past OBB and, we have these strong fiat rules, the two thirty two and the linear catalyst that you have, to what degree are you starting to think about new capacity? What are the things that you need to see before you make that next announcement? Thanks.

[Mark Widmar, CEO at First Solar]

Look, on on the last one in terms of what do I need to see it, we kinda, I think, need to let all the dust settle and dust also includes, you know, kind of understanding what comes out with this executive order, you know, to see what implications it has. That that, I think, is piece of the puzzle that, know, hopefully, we'll we'll see here near term. Look. I think the the thing I wanna maybe I wanna make sure we it was said in our prepared remarks, but I wanna make sure it's it's clear as well. We our domestic supply and our contract for that domestic supply is pretty solid through 2028.

[Mark Widmar, CEO at First Solar]

Okay? So our levers to for the domestic discrete domestic is sits further it's further out in the horizon. Okay? But what we have supply for is, with that, I think I said in my prepared remarks, that domestic position that we have created is a strategic foothold in my mind to leverage our international volume as both series six and series seven. Okay?

[Mark Widmar, CEO at First Solar]

And what we're looking to do, and I think we've alluded to this in the past because it ties back to your capacity expansion question, is to bring finishing capability into The US. So we can bring finishing capabilities into The US for both series six and for series seven. And the other thing that that does for us is we can get to market faster with new new volume, which is great, but it helps mitigate the exposure to the tariffs. Because, at these price points that that that we're seeing, you know, to do the simple math at a 25% tariff, the tariffs are pretty hefty. The opportunity to bring it into The US and to do that, on a semi finished product drops my declared value upon import to about a third of that.

[Mark Widmar, CEO at First Solar]

So now I'm bringing it in and and it's costing me, call it $10.11 cents kind of number versus something in the thirties and therefore my tariffs are much lower. The other thing that it does is it allows us to qualify for the manufacturing tax credit for assembly. So that's another lever that gets played into the math and for the fundamental economics. And we alluded to, you know, the business case is is very attractive to doing that. And so and then what happens is I have the opportunity because of the constructs that are in place right now to determine domestic content requirements, I can actually blend some more international in with my domestic, and it allows that opportunity to be multiplied, you know, significantly in terms of its value lever.

[Mark Widmar, CEO at First Solar]

So there's lots that that's in in play in that in that regard, Phil. You know, we're working through each one of those items. We're trying to, you know, triangulate, get our insights, understanding what what direction we wanna go, You know, but I've been telling telling our team that, hey, we've gotta be ready for this. We've already been working through and identifying site selection. We've already we're thinking through the transferring of tools and equipment.

[Mark Widmar, CEO at First Solar]

The nice thing about running Malaysia and Vietnam at lower capacity right now means there's excess tools that are available. That means we can go after those tools if the decision is that as the rates have come now with the downturn of the tariff rates, it really is gonna be uneconomic for the continued import from those markets. It's gonna be more beneficial for us to to bring in semi finished product, do that here in The US, take advantage of of the manufacturing tax credit environment and then give a little bit more. There'll be some domestic content associated with that product, know, get some more value in that regard as well.

[Alex Bradley, CFO at First Solar]

So just one thing I'll add in terms of what do we need to see and Mark just touched on a little bit on the periphery there is related to tariffs. Tariffs impact both how we might price our international fully finished products, but also as impactful as we think through if we do a finishing line, how do we source the early stage product and bring it over? Is it coming from Malaysia, Vietnam? Just given that if you go back to our previous guide, we gave you two discrete scenarios because there was so much uncertainty around long term tariff outcomes. Would it be at that 10% or would it be at the more reciprocal rates?

[Alex Bradley, CFO at First Solar]

We have updated that in our current guide to what we believe the current outlook is today. So clearly, we have some better visibility, but I'd say it's far from perfect. And even as we're putting the guide together, there was information that came out yesterday that could have potentially changed in the review around India. So what do we still need to see? We still need to have a bit more understanding of how the tariff regime is going to play out.

[Operator]

Next question is Moses Sutton, BNP Paribas.

[Moses Sutton, Managing Director at BNP Paribas]

Thanks for squeezing me in. If I look at the North America booking opportunity pipeline, so it it's up a gigawatt, maybe three gigawatts if I gross up the two that you booked in July, slide seven. How do we how do we think of this? Because there's 70 gigawatts of North America booking opportunity. There's your stuff that's in contracted backlog, then and there's, an industry that has a bunch of panels.

[Moses Sutton, Managing Director at BNP Paribas]

If I add all that up, it almost looks like it's the whole industry's volume for the next few years. So is there a signal there that we could even see that there's, you know, more coming into the plan, or are you just seeing everything in the market already and that's reflected in that metric?

[Mark Widmar, CEO at First Solar]

Moses, look, I I I think, there's a lot going on right now and and and we've had a number of of inbounds that are very large. Now what what I don't what I don't fully know I'll I'll use example of this. As I indicated, we had we had a customer who had a near term need who because their supplier, Chinese supplier reneged on that deal, and they came to us. And I've got others that are coming to us as well. And what I and that particular customer is looking to do something even, bigger than what we've done meaningfully larger, for us in '27 and '28.

[Mark Widmar, CEO at First Solar]

Again, that volume we sold to them this time around was $4.26. What I don't know is that if others are getting those who who and this particular customer is not one that we've actually sold to, over the last several years. I don't know if if they're all getting signaled the same way. That the commitments they thought they had from their supply chain have now been reneged on, and they're coming to First Solar. So our pipeline is you know, could be, just a reallocation of demand that's already in the marketplace because of disruption to their supply chain, or people pivoting away from from what they had initially envisioned that they were going to do.

[Mark Widmar, CEO at First Solar]

So that I don't I don't know. It's hard for me to determine if what I'm seeing because I've seen a handful of very large commitments. Some of it I think is more incremental. Some of it I do think is is, you know, call it, put it in the that hyperscaler bucket, you know, AI related. You know, it could be an incremental catalyst to to maybe near term visibility of market demand.

[Mark Widmar, CEO at First Solar]

But but I think there's many things that are they're adding up right now that, you know, are are maybe influencing a a bigger view of the market than it would be otherwise.

[Operator]

JULIEN And everyone, our final question today comes from Julien Dumoulin DUMOULIN Smith

[Julien Dumoulin-Smith, II-Ranked & 'Hall of Fame' Research Analyst covering Power, Utilities & Clean Energy at Jefferies]

Excellent. Hey, thanks for opportunity to clean up here. Team, if I can just on the use of cash, right? Obviously, you found yourself in a nice position here coming into the back half of the year. Got this at least chunk of clarity coming out of BBB. Pending tariff, how do you think about use cash here? Again, obviously, you've got a final decision on the fishing line.

[Julien Dumoulin-Smith, II-Ranked & 'Hall of Fame' Research Analyst covering Power, Utilities & Clean Energy at Jefferies]

You've now disclosed that you're moving forward on a perovskite line in Ohio. How do you think about the palatability of use of cash, the different decision trees and the timeline for it? Again, pending tariff seems to be a big consideration per your prior comments. But when and how do you think about it both in the R and D sense and as well as in shareholder returns?

[Alex Bradley, CFO at First Solar]

I'd say we've shored up the liquidity position from where we were at the last call pretty meaningfully this year. And like I mentioned on the call, we were at a lower cash point than we've been historically, not something I was worried about necessarily, but we wanted to make sure we put some more resilience in there, which is what we've done. We continue to expect that to get better over the year as we get back to somewhat of a more normalized working capital position across both AR and inventory. So that's helpful. If you look at where we end the year, absent significant new investment, we're through a large amount of the CapEx cycle that we've been through over the last couple of years.

[Alex Bradley, CFO at First Solar]

So there still will be some spend to finish up on the Louisiana side, although that's getting up and running now. Some of the cash payments that holdbacks will happen in 2026. As Mark mentioned, there's an opportunity around the finishing line that will depend on if we're bringing back end tools from Asia that exists today and repurposing them here. Are we adding any new tools, whether we lease a building, whether we buy a building that will change the CapEx profile here as well. The perovskite line, the development line is up and running.

[Alex Bradley, CFO at First Solar]

If that goes well, we'll continue to expand around that. But in general, I would say, I'm viewing this year, let's get through the year, let's figure out how we stand around tariffs and as the dust settles on the executive order, we should have a lot more clarity going into Q3, Q4 of this year of what that longer term position looks like. When you combine that with the clarity we had out of the OBPBA being passed, that's helpful for the longer term view. The fundamental of waterfall approach we have to cash hasn't changed. So we still look at core running the business.

[Alex Bradley, CFO at First Solar]

Can we expand either new manufacturing sites or finishing lines? Are we willing to spend more on R and D? And the answer recently has been yes, both internally and potentially looking at M and A around the R and D side. And then if we can't find accretive uses of cash through that, then we'll potentially look at how we would earn capital. So there's a lot more still, I think, that's happened this year.

[Alex Bradley, CFO at First Solar]

As Mark mentioned, there's still dust to settle around a lot of the policy that's really very fresh. Once we have better clarity on that and we sense what we're going through next year, we'll update you on the cash position most likely as we go into the 2026 guide towards the end of the year, early next year.

[Operator]

And ladies and gentlemen, that does conclude our question and answer session. It also does conclude our conference for today. We would like to thank you all for your participation. You may now disconnect.

Participants

Executives

• Byron Jeffers, VP - Finance, Treasury & IR
• Mark Widmar, CEO
• Alex Bradley, CFO

Analysts

• Brian Lee, Vice President at Goldman Sachs
• Mark Strouse, Executive Director at JP Morgan
• Praneeth Satish, Analyst at Wells Fargo
• Philip Shen, MD & Senior Research Analyst at Roth Capital Partners, LLC
• Moses Sutton, Managing Director at BNP Paribas
• Julien Dumoulin-Smith, II-Ranked & 'Hall of Fame' Research Analyst covering Power, Utilities & Clean Energy at Jefferies