Phase Space AI

Financial Model Notes

First Solar [FSLR]

First Solar [FSLR] — Financial Model Notes

As of 2026-07-29. Every figure below is from SEC EDGAR (CIK 0001274494) XBRL company facts or the filing text, and every derived figure states its arithmetic. No number in this memo comes from a data vendor's pre-computed field.

1. Quarterly P&L, reconstructed from XBRL

Revenues, GrossProfit, OperatingIncomeLoss, NetIncomeLoss are filed cumulatively (Jan-1 to period end). Quarterly figures below are first differences of the cumulative series within each fiscal year, which is the only correct de-cumulation and is the step the scanner's "TTM that skipped Q4" defect got wrong.

Quarter end Revenue $m Gross profit $m Operating income $m Net income $m GM% OM%
2023-03-31 548.3 112.1 18.0 42.6 20.4 3.3
2023-06-30 810.7 310.4 168.5 170.6 38.3 20.8
2023-09-30 801.1 376.2 273.0 268.4 47.0 34.1
2023-12-31 1,158.6 502.0 397.8 349.2 43.3 34.3
2024-03-31 794.1 346.0 243.1 236.6 43.6 30.6
2024-06-30 1,010.5 498.9 372.5 349.4 49.4 36.9
2024-09-30 887.7 445.3 322.0 313.0 50.2 36.3
2024-12-31 1,514.0 567.7 456.8 393.1 37.5 30.2
2025-03-31 844.6 344.4 221.2 209.5 40.8 26.2
2025-06-30 1,097.2 499.9 361.6 341.9 45.6 33.0
2025-09-30 1,594.9 610.7 466.1 455.9 38.3 29.2
2025-12-31 1,682.8 665.3 547.9 520.9 39.5 32.6
2026-03-31 1,044.2 486.1 345.3 346.6 46.6 33.1

TTM to 2026-03-31: revenue $5,419.0m, gross profit $2,262.1m, operating income $1,720.9m, net income $1,665.3m. The TTM revenue figure ties to the screen exactly.

Fiscal-year revenue: FY2023 $3,318.6m · FY2024 $4,206.3m · FY2025 $5,219.4m (each ties to the 10-K's own MD&A net-sales table: $3,318,602k / $4,206,289k / $5,219,376k).

Scale cross-check. Q1 2026 net income $346,619k ÷ 107,623k diluted shares = $3.22, matching the filed diluted EPS of $3.22. FY2025 $1,528,229k ÷ ~107,558k = $14.21, matching the filed $14.21. No share-count artefact.

2. The §45X adjustment — the only non-obvious modelling step

First Solar recognises the credit as a reduction of cost of sales, so it is inside gross profit and inside operating income. It is not an "other income" line and it is not below the tax line. Any model that takes OperatingIncomeLoss at face value is modelling a subsidy as a product margin.

The company publishes the amount in a table titled "benefits recognized from income-based government grants in our consolidated statements of operations":

$k FY2023 FY2024 FY2025 Q1 2025 Q1 2026
Cost of sales 659,745 1,009,451 1,606,722 301,820 418,033
SG&A — — 61 33 25
R&D — 4,186 2,391 1,844 149
Total 659,745 1,013,637 1,609,174 303,697 418,207

TTM total (Q2'25 → Q1'26) = 1,609,174 − 303,697 + 418,207 = $1,723,684k.

Derived series:

FY2023 FY2024 FY2025 TTM FY2026 guided (mid)
Product gross profit ($m) 641.0 848.4 513.6 539.2 355
Product gross margin 19.3% 20.2% 9.8% 9.9% 7.0%
Product operating income ($m) 197.5 380.8 (12.3) (2.8) (267.5)
Product operating margin +5.95% +9.05% −0.24% −0.05% −5.3%
Grants ÷ reported operating income 77.0% 72.7% 100.8% 100.2% 114.2%

Product gross profit subtracts only the cost-of-sales credit; product operating income subtracts the total, because the small R&D/SG&A grants already reduce reported operating expenses.

Balance-sheet corroboration. The credit also sits in Government grants receivable: $499.6m current + $125.6m non-current at 2025-12-31, and $285.2m current + $537.6m non-current at 2026-03-31 — a $198m increase in the quarter, consistent with $418m recognised against partial monetisation. The Q1 2026 cash-flow statement shows a $204.9m use of cash in "Government grants receivable," which is the timing gap between recognition and collection, and is a large part of why Q1 2026 operating cash flow was −$214.9m on $346.6m of net income.

3. Net cash — the screen's error, reconstructed

$k, at 2026-03-31
Cash and cash equivalents 2,362,979
Marketable securities 63,582
Gross cash (company definition) 2,426,561
Current portion of debt (188,594)
Long-term debt (237,182)
Net cash 2,000,785
memo: restricted marketable securities (excluded) 214,670

The Q1 2026 release states "Gross cash balance of $2.4 billion and net cash balance of $2.0 billion" — this ties exactly. The screen's $2,634,829k could not be reproduced from any combination of the filed balance-sheet lines at either 2025-12-31 or 2026-03-31 and is reported as a discrepancy rather than silently adopted. The $634.0m difference moves EV from $19,134m to $19,768m and EV/Sales from 3.53x to 3.65x.

4. FY2026 guidance, as published and as decomposed

Reaffirmed 2026-04-30 (unchanged from 2026-02-24):

Guidance
Volume sold 17.0 – 18.2 GW
Net sales $4.9 – 5.2bn
Gross profit $2.4 – 2.6bn ¹
Operating expenses $610 – 635m ²
Adjusted EBITDA $2.6 – 2.8bn ³
Capital expenditures $0.8 – 1.0bn
Year-end net cash $1.7 – 2.3bn

¹ "Assumes $2.10 billion to $2.19 billion of Section 45X tax credits and underutilization costs of $115 million to $155 million." ² "Assumes $110 million to $120 million of production start-up expense." ³ "reflects addbacks of approximately $217 million for share-based compensation, Section 45X tax credit discounts, underutilization, and production start-up expenses."

Q2 2026 cadence guidance: module sales 3.4–4.0 GW, §45X credits $330–400m, Adjusted EBITDA $400–500m.

Decomposition: - Implied blended ASP: $5,050m ÷ 17.6 GW = 28.7 c/W - §45X as a share of revenue: $2,145m ÷ $5,050m = 42.5% - Product gross profit: $2,500m − $2,145m = $355m (7.0%) - Product operating income: $355m − $622.5m = −$267.5m (−5.3%) - Reported operating income: $2,500m − $622.5m = $1,878m (37.2%) - §45X ÷ reported operating income = 114.2% - Guided revenue vs FY2025 actual $5,219.4m: −0.4% to −6.1%

FY2026E GAAP EPS (derived — the company does not guide it): operating income $1,765–1,990m + ~$30m net non-operating, taxed at 3.5% (FY2025 actual 3.3%, FY2024 8.1%, Q1'26 2.2%), ÷107.7m diluted = $16.08 – $18.10, midpoint $17.10.

5. Backlog series (from the identical sentence in each filing)

As of GW $bn ASP c/W
2024-09-30 72.8 21.7 29.8
2024-12-31 68.5 20.5 29.9
2025-03-31 66.1 19.8 30.0
2025-06-30 61.9 18.5 29.9
2025-09-30 53.7 16.4 30.5
2025-12-31 50.1 15.0 29.9
2026-03-31 47.9 14.4 30.1

All figures exclude contracts with Indian customers for which payment is not fully secured, and exclude variable consideration for future module technology improvements. The FY2025 10-K notes that price adjusters for technology improvements, if realised, "could result in additional revenue of up to $0.6 billion, the majority of which would be recognized in 2027 and 2028," on 23.2 GW of the FY2025 backlog (23.4 GW at 2026-03-31). That upside is excluded from the ASP series above and is a genuine, quantified positive not captured by the 30.1 c/W figure — at most it lifts realised ASP by ~1.3 c/W on the adjustable portion.

6. Multiple histories (own-name, computed here)

Both series are computed daily from Alpaca closes and FSLR's own filed TTM figures, stepped on the earnings release date (the date the market first held the number), not the period end.

Series Window n min p25 median p75 max current percentile
Trailing P/E 2024-02-27 → 2026-07-29 607 10.0x 14.1x 17.3x 20.1x 31.5x 13.1x 10th
EV/EBIT (TTM) 2024-02-27 → 2026-07-29 607 8.4x 12.6x 15.5x 17.8x 28.5x 11.5x 12th
EV/Sales (TTM) 2024-02-27 → 2026-07-29 607 2.79x 4.09x 4.89x 5.45x 8.66x 3.64x 15th

Window choice is a deliberate regime cut and is stated as such. 2024-02-27 is the first date on which the trailing twelve months contained four full quarters of §45X. Before 2023 the company had no credit; in FY2022 it had negative EPS, which makes the P/E undefined. Mixing the regimes would import a period whose denominator was near zero and inflate every upper percentile.

7. Files