In Q4, the company posted earnings per share of $4.84, missing analyst expectations of roughly $5.22, while revenue of about $1.68 billion modestly exceeded consensus estimates. Revenue increased around 11% year over year, reflecting continued demand for the company’s utility-scale solar modules, and also rose sequentially as module shipments increased during the quarter.
Profitability remained strong, with a gross margin of about 40%, slightly higher than the prior quarter. The margin expansion was primarily driven by a greater mix of U.S.-manufactured modules eligible for Section 45X tax credits, lower international freight costs as fewer modules were shipped overseas, and the resolution of a glass supply disruption that had constrained production earlier in the year.
First Solar provided a cautious outlook for FY 2026, projecting net sales of $4.9 billion to $5.2 billion, which came in well below Wall Street expectations of roughly $6.1 billion. The company also guided adjusted EBITDA to $2.6 billion to $2.8 billion and expects to end 2026 with a net cash balance of about $1.7 billion to $2.3 billion.
Management indicated that the softer outlook reflects several near-term headwinds affecting project timelines and manufacturing utilization. These include permitting delays for customer projects, tariff-related costs, and lower utilization at certain facilities as the company adjusts production amid evolving trade policies.
Below are key drivers of First Solar's value that present opportunities for upside or downside to the current Trefis price estimate for First Solar:
First Solar designs and manufactures advanced solar photovoltaic modules primarily for utility-scale solar power projects. The company focuses on thin-film cadmium telluride technology, which differs from the silicon-based modules widely used across the global solar industry. In addition to manufacturing modules, First Solar provides engineering, procurement, and construction services for solar power systems and maintains long-term relationships with large-scale renewable energy developers.
The Solar Module division is the primary source of value for the company for the following reasons:
First Solar's systems business is presently largely centered around the U.S. market. However, the company has a lot of opportunities overseas, particularly in markets like Latin America where electricity rates are high and consumption growth is much stronger than in the United States. Other growth markets include the Middle East, India, Asia Pacific, and China. The company has indicated that over half of its new systems booking opportunities (regarding system capacity) come from overseas.
First Solar's panel efficiency gains have been outpacing the broader industry over the past few years. The Cd-Te thin film technology that the company deploys has a higher theoretical upper limit for efficiency compared to silicon-based panels, and we see this as providing a competitive advantage over the long term. Higher efficiency panels help to reduce manufacturing costs, as they require fewer consumables and raw materials to produce each watt of capacity.
The global economic crisis had a profound impact on the solar industry. The rise in energy prices before the economic downturn led many solar manufacturers to increase capacity. This helped certain manufacturers as they benefited from economies of scale which in turn helped reduce prices. However, due to the credit contraction that occurred during the financial crisis, the installation of solar power systems declined significantly. The economic crisis impacted demand for everything ranging from polysilicon to rooftop panels. As a result, many smaller players with weak balance sheets have been struggling which has led to consolidation in the industry.
Global demand for utility scale solar energy continues to grow as governments and corporations invest in decarbonization and energy security. Large solar projects are becoming a key part of electricity generation portfolios, which supports long term demand for high efficiency modules produced by companies like First Solar.
Government incentives aimed at strengthening domestic clean energy supply chains are encouraging manufacturers to build new production facilities in the United States. First Solar has positioned itself as one of the leading domestic producers of solar modules and continues to expand capacity to meet growing demand.
First Solar is investing heavily in research and development to advance its thin film technology, including its CuRe semiconductor platform. Continued efficiency improvements and cost reductions could strengthen the company's competitive position against traditional silicon-based solar modules.
