First Solar Delivers Record $5.2B Revenue in 2025, Issues EBITDA Guidance Amid Tariff Turbulence (FSLR Q4 2025 Earnings Call)
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First Solar, Inc. (FSLR) concluded a highly dynamic 2025 with record operational execution, successfully navigating a persistently uncertain policy and trade environment to deliver strong financial results. The largest U.S. solar manufacturer reported full-year net sales of USD 5.2 billion—a 24% year-over-year increase—driven by record sales of 17.5 gigawatts (GW) of its proprietary thin-film modules. Full-year diluted earnings per share (EPS) hit USD 14.21, landing squarely within guidance. First Solar ended the year with a fortress balance sheet boasting USD 2.4 billion in net cash, heavily fortified by the monetization of USD 1.4 billion in Section 45X advanced manufacturing tax credits. As the company looks toward 2026, it is shifting its primary profitability metric from EPS to Adjusted EBITDA to provide clearer visibility into its operational performance amidst complex tariff impacts and strategic factory underutilization. With a contracted backlog of 50.1 GW valued at USD 15 billion, First Solar remains highly disciplined, anchoring its strategy on domestic manufacturing expansion and aggressive enforcement of its intellectual property.
Weaponizing Trade and Enforcing Intellectual Property
Throughout 2025, the solar industry was buffeted by a barrage of trade regulations, including Section 232 actions, Foreign Entities of Concern (FEOC) restrictions, and ongoing antidumping and countervailing duty (AD/CVD) investigations. Management emphasized that First Solar is a net beneficiary of this turbulence, standing as a genuine U.S. manufacturer in stark contrast to crystalline silicon competitors tethered to Chinese supply chains. To support this, First Solar is leaning heavily into IP enforcement. On the day of its earnings call, the company filed a petition with the U.S. International Trade Commission (ITC) against ten groups of foreign-headquartered manufacturers for allegedly infringing on its TOPCon patents, seeking exclusion orders to prevent the importation of infringing products.
However, the trade environment also creates near-term financial friction. Full-year 2025 gross margin contracted to 41% from 44% in 2024, primarily due to rising tariff costs on imported raw materials (like glass and aluminum) and exacerbated warehousing expenses. To adapt, First Solar is strategically curtailing its Southeast Asian facilities in Malaysia and Vietnam, running them at low utilization rates. While this incurs significant near-term underutilization costs, it preserves the option to eventually ramp up production if the regulatory environment creates profitable demand or if U.S. finishing capabilities are expanded.
U.S. Expansion and the Path to Perovskites
First Solar's domestic growth trajectory remained steep in 2025. The company initiated commercial production at its fifth U.S. factory in Louisiana and announced plans to construct a new finishing facility in South Carolina, expected to come online in 2026. This South Carolina plant is highly strategic; it will onshore the finishing of Series 6 modules that originate in the company’s Southeast Asian facilities, thereby optimizing freight, tariffs, and domestic content qualification for the U.S. market.
Technologically, First Solar is executing a two-pillar strategy. In Q1 2026, the company will permanently convert its Ohio lead line to its new "CURE" platform, which offers improved temperature coefficients and lower degradation rates. When fully deployed, CURE is expected to deliver up to 8% more lifetime specific energy yield than competing crystalline silicon TOPCon technology. Simultaneously, First Solar is aggressively advancing its perovskite thin-film program. Management announced a new non-exclusive licensing agreement with Oxford PV, securing access to a fundamental portfolio of perovskite patents. While acknowledging the significant hurdles of scaling perovskites to high-volume manufacturing (HVM), First Solar is actively procuring equipment for a pilot line expected to reach operational readiness by early 2027.
Transitioning to EBITDA Guidance Amidst Transition Costs
For 2026, First Solar announced a shift away from EPS guidance to Adjusted EBITDA, a move designed to filter out the noise from potential Pillar Two international tax accruals and the heavy start-up/underutilization costs associated with its manufacturing pivot. For the full year, the company is guiding for net sales of USD 4.9 billion to USD 5.2 billion and Adjusted EBITDA of USD 2.6 billion to USD 2.8 billion.
A massive component of this profitability will continue to be U.S. industrial policy. The company’s gross margin guidance of approximately 49.5% includes an estimated USD 2.1 billion to USD 2.19 billion in Section 45X tax credits. Capital expenditures for 2026 are forecasted at USD 800 million to USD 1 billion, directed primarily toward the South Carolina finishing line and the Louisiana plant. First Solar is also streamlining its capital structure, announcing plans to prepay the remaining balances on its India credit facilities (including a loan with the DFC) to reduce exposure to rupee volatility and optimize local working capital. Backed by its massive 50.1 GW backlog and highly selective booking strategy, First Solar is positioned to dictate its terms in a U.S. utility-scale market that remains desperate for reliable, tariff-compliant, and non-FEOC module supply.