What Changed In First Solar’s Story?
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First Solar (FSLR) stock trades at 9.9 times earnings, against 21.9 for the S&P 500. A shareholder buying at that discount still needs to know what the business now earns its money on, and management’s account of it has changed. On its fiscal Q3 2025 call, management highlighted a record 5.3 gigawatts of module sales. So what does management emphasize now?
First Solar Now Talks Up Margin Over Volume
On the October 29, 2026 call for fiscal Q3 2026, management highlighted an expanded gross margin of approximately 58%. The company called the Section 232 proclamation, issued in August during that quarter, a meaningful shift for U.S. solar manufacturing. By 2027, management said, nearly 80% of the company’s global module manufacturing footprint will be in the U.S.
Volume was the growth story a year earlier, with the record arriving in a quarter when revenue rose 79.7% from a year before. Management no longer emphasizes how many gigawatts First Solar sells. The focus rests on what those modules earn and where they are made.
How Big Is The Shift In First Solar’s Numbers?
In the September quarter, First Solar sold less and earned more. Revenue was $1.23 billion, down 22.8% from a year earlier, a decrease management said came mostly from lower module volumes sold to third parties. Gross margin was 57.9%, compared with 38.3% a year earlier. Management credited the expansion mainly to a higher mix of U.S.-produced modules.
Profit climbed alongside the margin rather than with sales. Net income was $571 million, up approximately 25% year over year, management said. Over the twelve months to September 30, 2026, revenue was $5.01 billion, down 0.7% from the twelve months before, while net margin widened to 37.1% from 27.7%.
Is First Solar’s New Focus Reassuring For Holders?
The shift reads as reassuring for current profit: First Solar is earning more on fewer sales. Management also said the company has increased its pricing since the Section 232 announcement.
For sales ahead, it is a concern. First Solar had a 44-gigawatt backlog at the end of September 2026, against 68.5 gigawatts at the end of 2024, by management’s figures. Management said its move toward project-specific contracts may slow the pace of building an extended multiyear backlog. Not all of First Solar’s profit has arrived as cash: over the twelve months to September, cash from operations was $839 million, against net income of $1.86 billion.
First Solar is expected to report next in February 2027. When it does, the size of its contracted backlog in gigawatts is the measure to watch.
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