First Solar’s second quarter results were positively received by the market, as the company delivered above-consensus revenue and profit, and management credited policy tailwinds and effective backlog management for the outcome. CEO Mark Widmar emphasized that strong U.S. module sales, contract termination payments, and higher domestic content contributed to the quarterly performance. The company also benefited from increased demand following federal legislation that tightened restrictions on foreign solar imports, which management says solidified First Solar’s competitive position domestically. Widmar noted, “We progressed our domestic capacity expansion during the quarter, continuing to ramp up at our Alabama facility.”
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First Solar (FSLR) Q2 CY2025 Highlights:
- Revenue: $1.10 billion vs analyst estimates of $1.05 billion (8.6% year-on-year growth, 4.9% beat)
- EPS (GAAP): $3.18 vs analyst estimates of $2.66 (19.6% beat)
- Adjusted EBITDA: $109.2 million vs analyst estimates of $410.3 million (10% margin, 73.4% miss)
- The company lifted its revenue guidance for the full year to $5.3 billion at the midpoint from $5 billion, a 6% increase
- EPS (GAAP) guidance for the full year is $15 at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: 33%, down from 36.9% in the same quarter last year
- Market Capitalization: $19.81 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From First Solar’s Q2 Earnings Call
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Brian Lee (Goldman Sachs) asked about the sustainability of improved bookings and pricing power. CEO Mark Widmar responded that recent booking momentum was driven by policy clarity and pent-up demand, but price discovery is ongoing due to evolving market dynamics.
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Mark Strouse (JPMorgan) pressed on the risk to contracted backlog from executive order changes. Widmar clarified that legacy contracts safe-harbored before 2024 are insulated, but future demand visibility hinges on new guidance for tech-neutral credits.
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Praneeth Satish (Wells Fargo) questioned the rationale for current pricing and the timing of capacity commitments. Widmar explained that near-term bookings prioritized clearing inventory and strategic positioning for follow-on opportunities, while future pricing could benefit from further policy catalysts.
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Philip Shen (ROTH Capital Partners) asked about domestic content pricing and capacity expansion triggers. Widmar stated that domestic contract positions are stable through 2028, and further capacity decisions depend on tariff clarity and executive order outcomes.
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Julien Dumoulin-Smith (Jefferies) inquired about cash use priorities amid policy shifts. CFO Alex Bradley outlined a cautious approach, prioritizing core business investments, potential R&D or finishing line expansion, and shareholder returns pending further policy clarity.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will monitor (1) progress on the Louisiana facility ramp and any announcements around new U.S. finishing lines, (2) the company’s success in mitigating tariff impacts and recovering logistics costs on international sales, and (3) the evolution of federal policy and executive order implementation affecting domestic content and tax credit eligibility. We will also track the pace of customer re-contracting activity and the commercialization of new technology platforms.
First Solar currently trades at $184.25, up from $175.30 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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