First Solar (FSLR 5.28%), a U.S.-based leader in advanced solar module manufacturing, announced quarterly results for the second quarter of 2025 on July 31, 2025. The company posted GAAP revenue of $1.10 billion, noticeably surpassing analyst GAAP estimates of $1.04 billion, and reported earnings per share (GAAP) of $3.18, also topping the expected $2.66 (GAAP). The quarter showed revenue growth, as GAAP net sales increased to $1.1 billion from the prior quarter. and a substantial beat on profit (GAAP net income per diluted share of $3.18, exceeding the analyst estimate of $2.66 by 19.6%), even as the quarter was shaped by growing trade and policy uncertainty, especially relating to newly imposed tariffs.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $3.18 | $2.66 | $3.25 | (2.2%) |
| Revenue | $1.10 billion | N/A | $1.01 billion | 8.9% |
| Operating Income | $362 million | N/A | N/A | |
| Gross Margin | 45.6% | 49.4% | (-3.8 pp) |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
About First Solar: Business and Success Factors
First Solar produces solar energy modules using cadmium telluride (CdTe) thin-film technology. Its modules are known for their high performance in extreme heat and humid climates, distinguishing them from traditional crystalline silicon solar products. The company supplies modules to utility-scale solar developers around the world, with a heavy focus on the U.S. and Indian markets.
The recent focus for the business has centered on innovation in advanced module technology, global expansion of manufacturing, and responsible solar manufacturing. Key success factors include investments in research and development, maintaining a vertically integrated U.S. manufacturing base, and the ability to adapt production strategy in response to shifts in global trade policy. Government incentives and a strong financial footing have also allowed the company to expand strategically while keeping a focus on sustainability and cost efficiency.
Quarter Highlights: Operations, Results, and Developments
The company credited the revenue increase mainly to higher module sales to third-party customers. Gross profit (GAAP) reached $499.9 million.
First Solar’s proprietary module technology continued to be a competitive differentiator. Its Series 7 solar modules, purpose-built for utility-scale power plants, continued to ramp up, and field performance and warranty issues from previous runs appear to be mostly resolved. Research and development investment remained robust, targeting further gains in module efficiency and reliability. The rollout of advanced CuRe technology, which aims for a lower annual power degradation rate and improved performance, also carried forward with new deployments in test environments.
In manufacturing and supply chain, the company’s U.S. factories benefited from ongoing government support, including the Inflation Reduction Act’s Section 45X manufacturing tax credits. However, facilities in Malaysia and Vietnam experienced uncertainty after the U.S. government announced reciprocal tariffs. These tariffs, reaching up to 46% for some products, posed significant risks of reduced factory utilization and potential idling. Management revealed that 12 gigawatts of contracted international product revenue, about $3 billion, could be at risk if persistent tariffs lead to cancellations or renegotiation of contracts. This figure represents the forecasted year-end 2025 backlog of international product that may be terminated based on tariff-related provisions. The Indian plant, meanwhile, is being repositioned to serve the growing Indian market by tapping into public procurement incentives.
The company’s backlog of signed orders remained strong at 66.1 gigawatts, slightly down from late 2024, but well supported by ongoing customer interest and nearly 2.1 gigawatts of new bookings. While this backlog is central to the company’s business stability, management pointed out that the portion exposed to new U.S. tariffs carries elevated risk. First Solar continues to work with customers to allocate tariff exposure and decide whether to keep, share, or cancel affected orders.
On environmental and social governance, First Solar maintained its leadership by promoting low-carbon manufacturing, rapid energy payback for its modules, and a robust recycling program. Its U.S.-centric supply chain and sustainability practices remain a selling point for customers aiming to meet climate targets and comply with new policy incentives.
Looking Ahead: Guidance and Forward Indicators
Full-year 2025 earnings per share (GAAP) guidance shifted higher at the lower end, now ranging from $13.50 to $16.50, with the guidance reflecting ongoing risks from tariffs and related costs.
It also raised its year-end net cash balance target, anticipating between $1.3 billion and $2.0 billion, due in part to continued monetization of manufacturing tax credits. For the upcoming quarter, management expects module sales between 5.0 and 6.0 gigawatts and earnings per diluted share of $3.30 to $4.70. Management emphasized that ongoing outcomes for tariff regimes and energy policy in the U.S. and abroad could impact production strategy, working capital levels, and the ultimate quality of the sales backlog. Investors are encouraged to track policy and trade updates closely, as these may cause further adjustments to guidance and operational strategy.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
