01—Abstract
Summary
Summary of the 10-K filed February 25, 2025. Cited figures are marked; the original filing is the authoritative source.
First Solar, Inc. (FSLR) demonstrated robust growth in its 2024 fiscal year, with net sales increasing by 27% to $4.2 billiona, primarily driven by higher module volumes and contract termination payments.
The company also achieved a significant improvement in gross profit margin, reaching 44.2%b, up from 39.2% in the prior year. This was largely attributed to a favorable sales mix including modules qualifying for the advanced manufacturing production credit under Section 45X of the IRC, and increased volumes. The company is strategically expanding its manufacturing capacity, with a total installed nameplate production capacity reaching approximately 21 GW by the end of 2024, and further expansion planned with its fifth U.S. manufacturing facility expected to commence operations in the second half of 2025.
Financially, First Solar generated strong operating cash flows and ended the year with $1.8 billionc in cash, cash equivalents, and marketable securities. The company's commitment to R&D is evident with the commissioning of a new innovation center in Ohio and record cell efficiencies achieved.
Management is focused on balancing manufacturing capacity with market demand and managing costs to maintain competitiveness. Despite positive financial and operational trends, the company faces ongoing risks related to intense market competition, potential changes in government incentives, supply chain vulnerabilities, and product quality issues, including a previously identified manufacturing defect in certain Series 7 modules that resulted in an estimated loss range of $56 million to $100 milliond.
02—Key points
Key Highlights
- Net sales increased by 27% to $4.2 billion in fiscal year 2024.
- Gross profit margin improved to 44.2% in 2024, up from 39.2% in 2023, driven by Section 45X credits and increased volumes.
- Total installed nameplate production capacity reached approximately 21 GW by the end of 2024, with plans for further expansion.
- The company achieved a new world record CdTe research cell conversion efficiency of 23.1%.
- First Solar generated $1.2 billion in net cash provided by operating activities.
- The company ended the fiscal year with $1.8 billion in cash, cash equivalents, and marketable securities.
- A product warranty liability was increased by an estimated $56 million to $100 million due to manufacturing issues affecting certain Series 7 modules.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, First Solar, Inc. kept $0.31.
- Revenue$4.21B100.0%
- Cost of revenue−$2.35B55.8%
- Gross profit$1.86B44.2%
- Operating costs−$463.4M11.0%
- Operating income$1.39B33.2%
- Interest, other & tax−$102.4M2.4%
- Net income$1.29B30.7%
Where FY2024 revenue went
$4.21B- Cost of revenue: $2.35B, 56% of revenue
- Net income: $1.29B, 31% of revenue
- R&D: $191.4M, 4.5% of revenue
- SG&A: $188.3M, 4.5% of revenue
- Other operating costs: $83.8M, 2.0% of revenue
- Interest, other & tax: $102.4M, 2.4% of revenue
Kept 31% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 25, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $4.21B$3.32B | +26.7% |
| Cost of Revenue | $2.35B$2.02B | +16.4% |
| Gross Profit | $1.86B$1.30B | +42.8% |
| R&D Expenses | $191.38M$152.31M | +25.7% |
| SG&A Expenses | $188.26M$197.62M | −4.7% |
| Operating Expenses | $464.56M$450.30M | +3.2% |
| Operating Income | $1.39B$857.27M | +62.7% |
| Net Income | $1.29B$830.78M | +55.5% |
| EPS (Basic) | $12.07$7.78 | +55.1% |
| EPS (Diluted) | $12.02$7.74 | +55.3% |
| Shares Outstanding (Basic) | 107.02M106.80M | +0.2% |
| Shares Outstanding (Diluted) | 107.53M107.37M | +0.1% |
05—Questions
Frequently Asked Questions
What were the key drivers of First Solar's revenue growth in 2024?
First Solar's net sales grew by 27% to $4.2 billion in fiscal year 2024, primarily driven by an increase in the volume of modules sold to third parties and higher termination payments associated with certain customer contract terminations. This growth was partially offset by a reduction in revenue related to manufacturing issues affecting certain Series 7 modules.
How is First Solar addressing the identified manufacturing issues with its Series 7 modules?
First Solar has identified the primary causes of the manufacturing issues affecting certain Series 7 modules, which may lead to premature power loss. The company has taken actions to address these issues and has increased its product warranty liability by an estimated $56 million to $100 million to cover potential losses related to these modules. The ultimate loss will depend on the extent of premature power loss and any additional remediation commitments.
What is First Solar's current manufacturing capacity and expansion outlook?
As of the end of fiscal year 2024, First Solar's total installed nameplate production capacity reached approximately 21 GW. The company is also in the process of expanding its manufacturing capacity, with its fifth U.S. manufacturing facility expected to commence operations in the second half of 2025. First Solar anticipates having over 25 GW of annual manufacturing capacity by 2026.
How are government incentives, particularly the Inflation Reduction Act (IRA), impacting First Solar?
The Inflation Reduction Act (IRA) is significantly benefiting First Solar, particularly through the advanced manufacturing production credit (Section 45X), which provides credits for modules manufactured in the United States. In 2024, the company recognized $997.6 million of Section 45X credits as a reduction to Cost of Sales. First Solar also entered into agreements to sell $857.2 million of these tax credits generated in 2024. These incentives are a key driver of demand for domestically manufactured modules and contribute to the company's financial results.
06—Continue