First Solar(FSLR) - 2025 Q1 - Quarterly Report

Financial Performance - Net sales for Q1 2025 increased by 6% to $844.6 million compared to$794.1 million in Q1 2024, driven by an 8.0% increase in module sales volume [112]. - Net sales for the three months ended March 31, 2025, were $844.6 million, a 6.4$794.1 million in the same period of 2024, primarily due to an 8.0% increase in the volume of modules sold [133]. - Gross profit for the three months ended March 31, 2025, decreased by $1.6 million, or 0.5$344.4 million, with a gross profit margin of 40.8%, down from 43.6% in 2024 [137]. - Selling, general and administrative expenses rose by $7.3 million, or 16.0$53.2 million, accounting for 6.3% of net sales [139]. - Research and development expenses increased by $9.6 million, or 22.6$52.4 million, representing 6.2% of net sales [142]. - The cost of sales as a percentage of net sales increased to 59.2% in Q1 2025 from 56.4% in Q1 2024, resulting in a gross profit margin decrease from 43.6% to 40.8% [130]. - Cost of sales for the three months ended March 31, 2025, increased by $52.1 million, or 11.6$500.2 million compared to $448.1 million in 2024, representing 59.2$106.8 million [135]. - Interest income decreased by $8.4 million, or 30.8$18.9 million due to lower yields and balances of marketable securities [149]. - Income tax expense decreased by $11.4 million, or 60.2$(7.5) million, with an effective tax rate of 3.5% compared to 7.4% in 2024 [155]. Production and Capacity - Total installed nameplate production capacity is approximately 21 GW, with 4.0 GW produced and 2.9 GW sold during Q1 2025 [112]. - The company expects to achieve an annual manufacturing capacity of over 25 GW by 2026, with the fifth manufacturing facility in the U.S. expected to commence operations in the second half of 2025 [110]. - The company is expanding its manufacturing capacity by approximately 4 GW, including the construction of a fifth manufacturing facility in the United States [129]. - The company commenced operations at its fourth manufacturing facility in the U.S. and is constructing a fifth facility, with an expected investment of approximately $0.6 billion throughout 2025 and 2026 [164]. Product Development and Innovation - The company sold its first CuRe modules during Q1 2025, with a new world record CdTe research cell conversion efficiency of 23.1$857.2 million in Section 45X tax credits, generating cash proceeds of $818.6 million [112]. - The company expects to qualify for the advanced manufacturing production credit under Section 45X of the IRA, which will favorably impact its results of operations in future periods [124]. - The company expects to qualify for a credit of approximately$0.17 per watt for each solar module produced in the U.S. and sold to a third party under the advanced manufacturing production credit, which is anticipated to provide significant funding throughout its 10-year period [163]. Cash Flow and Investments - As of March 31, 2025, the company had $0.9 billion in cash, cash equivalents, and marketable securities, down from$1.8 billion as of December 31, 2024, primarily due to lower cash receipts from module sales and increased payments to suppliers [161]. - The net cash used in operating activities for the three months ended March 31, 2025, was $(607,982) thousand, compared to$267,723 thousand for the same period in 2024 [169]. - The net cash used in investing activities decreased to $(88,209) thousand for the three months ended March 31, 2025, from$(568,628) thousand in the prior period [171]. - The increase in net cash used in financing activities was primarily due to debt repayment during the current period [172]. - The company has committed $210.6 million in restricted marketable securities and$2.8 million in restricted cash for solar module collection and recycling obligations [167]. Logistics and Supply Chain - The company monitors logistics costs and employs contract structures to mitigate logistics expenses associated with raw material procurement and module distribution [126]. - The company has entered into long-term supply agreements for substrate glass, with termination penalties totaling up to $343.4 million as of March 31, 2025 [166]. Accounting and Compliance - The company is currently evaluating the impact of recent accounting standards updates on its consolidated financial statements and disclosures [158]. - The company maintains the intent to permanently reinvest accumulated earnings outside the U.S., with potential reevaluation based on future circumstances [162].