01—Abstract
Summary
Summary of the 10-K filed March 1, 2022. Cited figures are marked; the original filing is the authoritative source.
First Solar, Inc.'s 2021 Form 10-K details a year of robust growth and strategic expansion, driven by increasing demand for its advanced thin-film PV solar modules.
The company reported an 8% increase in net sales to $2.9 billiona, largely due to higher module volumes sold and the sale of certain projects. Despite a slight decrease in gross profit margin to 25.0%, driven by higher logistics costs and a lower average selling price per watt, the company's operational efficiency and cost reductions helped mitigate these pressures. First Solar is actively expanding its manufacturing capacity, with plans for new facilities in the U.S. and India, reflecting confidence in long-term market growth.
Key strategic moves in 2021 included the divestiture of its North American O&M and U.S. project development businesses, which contributed significantly to overall profitability through gains on sales. The company continues to focus on its core thin-film technology, emphasizing its performance advantages, sustainability, and lower levelized cost of electricity. Despite facing intense competition and market pricing pressures, First Solar's differentiated technology, ongoing R&D investment, and solid financial position provide a strong foundation for future growth.
02—Key points
Key Highlights
- Net sales increased by 8% to $2.9 billion in 2021, driven by a 48% increase in module volume sold, though average selling price per watt decreased by 10%.
- Gross profit margin remained strong at 25.0% in 2021, slightly down from 25.1% in 2020, impacted by increased logistics costs and a lower average selling price per watt.
- Manufacturing capacity is expanding, with plans to add 6.6 GWDC through new facilities in the U.S. and India, expected to commence operations in 2023.
- The company divested its North American O&M operations and U.S. project development business, resulting in gains of $115.8 million and $31.5 million, respectively.
- First Solar continues to lead in thin-film technology, highlighting advantages in temperature coefficient, spectral response, and partial shading.
- Significant R&D investment is ongoing to improve module performance and manufacturing efficiency, with a focus on programs like CuRe.
- The company reported $1.8 billion in cash, cash equivalents, and marketable securities as of December 31, 2021, indicating strong financial stability.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, First Solar, Inc. kept $0.16.
- Revenue$2.92B100.0%
- Cost of revenue−$2.19B75.0%
- Gross profit$730.0M25.0%
- Operating costs−$143.2M4.9%
- Operating income$586.8M20.1%
- Interest, other & tax−$118.1M4.0%
- Net income$468.7M16.0%
04—Financials
Financial Highlights
Figures from 10-KFY2021filed March 1, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $2.92B$2.71B | +7.8% |
| Cost of Revenue | $2.19B$2.03B | +8.0% |
| Gross Profit | $729.95M$680.67M | +7.2% |
| R&D Expenses | $99.11M$93.74M | +5.7% |
| SG&A Expenses | $170.32M$222.92M | −23.6% |
| Operating Expenses | $290.49M$363.18M | −20.0% |
| Operating Income | $586.75M$317.49M | +84.8% |
| Interest Expense | $13.11M$24.04M | −45.5% |
| Net Income | $468.69M$398.36M | +17.7% |
| EPS (Basic) | $4.41$3.76 | +17.3% |
| EPS (Diluted) | $4.38$3.73 | +17.4% |
| Shares Outstanding (Basic) | 106.26M105.87M | +0.4% |
| Shares Outstanding (Diluted) | 106.92M106.69M | +0.2% |
05—Questions
Frequently Asked Questions
What is First Solar's primary business and technology?
First Solar's primary business is the design, manufacture, and sale of Cadmium Telluride (CdTe) thin-film PV solar modules. This technology is positioned as a high-performance, lower-carbon alternative to conventional crystalline silicon solar modules.
What were the key financial performance indicators for 2021?
In 2021, First Solar reported net sales of $2.9 billion, an 8% increase year-over-year, driven by higher module volumes. The gross profit margin was 25.0%. The company also reported operating income of $586.7 million.
What are First Solar's major strategic initiatives for growth?
Key growth strategies include expanding manufacturing capacity with new facilities in the U.S. and India, continuing significant investment in Research and Development (R&D) to enhance module technology and cost efficiencies, and focusing on the sustainability advantages of their thin-film modules. They have also strategically divested non-core businesses to focus on their core module manufacturing operations.
What are the main risks facing First Solar?
First Solar faces significant risks including intense competition in the solar market, potential price reductions due to global oversupply, changes in government subsidies and incentives, interest rate fluctuations impacting customer financing, potential quality or performance issues with their modules, and reliance on certain key suppliers for raw materials. They also note risks associated with international operations and regulatory changes.
06—Continue