First Solar(FSLR) - 2023 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q4 2023, net sales were $1.2 billion, an increase of$0.4 billion compared to the prior quarter, driven by higher volumes sold, particularly Series 7 modules [17] - Full-year 2023 net sales reached $3.3 billion, up from$2.6 billion in 2022, primarily due to a $0.9 billion increase in module net sales [17] - Full-year EPS was$7.74, exceeding the midpoint of initial and Q3 2023 guidance, despite impacts from the sale of Section 45X tax credits and an impairment of investment in CubicPV [8][24] Business Line Data and Key Metrics Changes - The company produced a record 12.1 gigawatts in 2023, a 33% increase over 2022, with Series 6 factories producing 9.7 gigawatts and Series 7 factories contributing over 2.4 gigawatts [8][9] - The total contracted backlog increased to 80.1 gigawatts, with net bookings of 28.3 gigawatts at a base ASP of over $0.30 per watt [7][13] Market Data and Key Metrics Changes - The company added 10 new customers in 2023, with strong mid to long-term demand, particularly in the U.S., evidenced by 2.3 gigawatts of net bookings since the previous earnings call [7] - The average ASP for recent bookings was$31.9 per watt pre-adjuster, indicating a positive pricing trend despite market challenges [13] Company Strategy and Development Direction - The company plans to increase its nameplate capacity to approximately 25 gigawatts by the end of 2026, with significant investments in new manufacturing facilities [11][38] - The focus remains on R&D investments, including a new R&D Innovation Center and a perovskite development line, to enhance technology and product offerings [12][40] Management's Comments on Operating Environment and Future Outlook - Management highlighted challenges from Chinese subsidization and pricing volatility affecting market conditions, particularly in the U.S. and India [28][29] - The company remains optimistic about its strong backlog and ongoing demand, expecting to leverage its differentiated manufacturing model for growth [41][51] Other Important Information - The company completed the sale of approximately $687 million of Section 45X tax credits, with expected cash proceeds of$659 million [18] - The economic impact study indicated that First Solar supported over 16,000 jobs across the U.S. in 2023, with projections of approximately 30,000 jobs by 2026 [34][35] Q&A Session Summary Question: Will bookings near zero in a quarter be a concern for investors? - Management indicated a strategy of patience in bookings, with ongoing commercial conversations for over three gigawatts of bookings in late-stage negotiations [67] Question: What is the outlook for ASPs and bookings? - Management expressed satisfaction with recent bookings and ASPs, emphasizing a focus on maintaining pricing while recognizing ongoing opportunities in both the U.S. and India [68]