First Solar Lifted Profit as Margins Expanded

The Tip Desk · July 30, 2026 · 2 min read

Adjusted EBITDA reached $644 million, topping the company’s prior forecast by $144 million.

First Solar Inc. (FSLR), the solar-module manufacturer, increased second-quarter net income 24% despite a decline in sales, as wider margins offset weaker contract-termination revenue.

The quarter marked a sharp change in the company’s growth profile. Revenue fell 4% from a year earlier after rising 24% in the first quarter, while contracted backlog declined 2.8 gigawatts sequentially to 45.1 gigawatts.

Net sales totaled $1.06 billion, compared with $1.10 billion a year earlier, as increased third-party module volume was outweighed by lower revenue from customer contract terminations. Sales rose about 1% from the first quarter. Diluted earnings increased to $3.92 a share from $3.18 and rose about 22% sequentially.

Profitability strengthened as gross profit rose 21% to $605 million and gross margin expanded to about 57% from 46% a year earlier. Operating income increased 25% to $450 million, producing a margin of about 43%, compared with 33%. Research-and-development expense rose 40% to $76 million, while production start-up expense declined 15% to $26 million.

First Solar reaffirmed its 2026 forecasts for sales of $4.9 billion to $5.2 billion and adjusted EBITDA of $2.6 billion to $2.8 billion. The company narrowed its expected underutilization costs to $115 million to $135 million and reduced its start-up expense forecast to $90 million to $100 million.

For the third quarter, First Solar expects module sales of 3.9 gigawatts to 4.5 gigawatts and adjusted EBITDA of $625 million to $775 million, above the cadence outlined three months earlier.

Net cash fell to $1.7 billion from $2.0 billion at the end of March as seasonal working-capital requirements and spending on the South Carolina finishing facility absorbed funds. Inventory climbed to $1.09 billion from $737 million at year-end, leaving cash conversion and the shrinking backlog as counterweights to the company’s unchanged annual outlook.