01—Abstract
Summary
Summary of the 10-K filed February 24, 2026. Cited figures are marked; the original filing is the authoritative source.
First Solar, Inc. (FSLR) reported strong net sales growth of 24% in 2025, reaching $5.2 billiona, driven by increased module volume.
Despite this top-line growth, the company experienced a decrease in gross profit margin to 40.6%b from 44.2% in the prior year. This margin compression was attributed to higher costs associated with a greater proportion of U.S.-produced modules, increased warehousing and logistics expenses, and additional duties and tariffs. These factors were partially offset by higher advanced manufacturing production credits under Section 45X of the IRC.
The company continues to expand its manufacturing capacity, notably with the construction of its sixth U.S. facility expected to commence operations in the second half of 2026. First Solar's strategic focus remains on its differentiated thin-film technology, which offers advantages in certain climates and avoids reliance on Chinese crystalline silicon supply chains.
The company is also actively managing its product quality, setting aside a $50 millionc liability for identified manufacturing issues affecting certain Series 7 modules that may cause premature power loss. Despite these challenges, First Solar's robust R&D investments and commitment to responsible solar practices position it to capitalize on the growing demand for renewable energy, particularly in the United States.
02—Key points
Key Highlights
- First Solar reported a 24% increase in net sales to $5.2 billion for the year ended December 31, 2025, primarily due to higher module volumes sold.
- Gross profit margin decreased to 40.6% in 2025 from 44.2% in 2024, driven by increased costs (U.S. production mix, warehousing, logistics, tariffs) partially offset by Section 45X tax credits.
- The company is expanding its U.S. manufacturing capacity with a sixth facility set to begin operations in the second half of 2026.
- First Solar recorded a $50 million warranty liability for identified manufacturing issues in Series 7 modules that may lead to premature power loss.
- Net cash provided by operating activities significantly increased to $2.1 billion in 2025, up from $1.2 billion in 2024, bolstered by tax credit sales and higher module receipts.
- The company continues to invest heavily in R&D, with R&D expenses increasing by 22% to $233.4 million in 2025.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2025, First Solar, Inc. kept $0.29.
- Revenue$5.22B100.0%
- Cost of revenue−$3.10B59.4%
- Gross profit$2.12B40.6%
- Operating costs−$523.5M10.0%
- Operating income$1.60B30.6%
- Interest, other & tax−$68.6M1.3%
- Net income$1.53B29.3%
Where FY2025 revenue went
$5.22B- Cost of revenue: $3.10B, 59% of revenue
- Net income: $1.53B, 29% of revenue
- R&D: $233.4M, 4.5% of revenue
- SG&A: $203.8M, 3.9% of revenue
- Other operating costs: $86.3M, 1.7% of revenue
- Interest, other & tax: $68.6M, 1.3% of revenue
Kept 29% as net incomeInterest, other & tax $68.6M · 1.3%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2025filed February 24, 2026Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $5.22B$4.21B | +24.1% |
| Cost of Revenue | $3.10B$2.35B | +32.0% |
| Gross Profit | $2.12B$1.86B | +14.1% |
| R&D Expenses | $233.42M$191.38M | +22.0% |
| SG&A Expenses | $203.76M$188.26M | +8.2% |
| Operating Expenses | $523.48M$464.56M | +12.7% |
| Operating Income | $1.60B$1.39B | +14.5% |
| Net Income | $1.53B$1.29B | +18.3% |
| EPS (Basic) | $14.25$12.07 | +18.1% |
| EPS (Diluted) | $14.21$12.02 | +18.2% |
| Shares Outstanding (Basic) | 107.23M107.02M | +0.2% |
| Shares Outstanding (Diluted) | 107.54M107.53M | 0.0% |
05—Questions
Frequently Asked Questions
What were the main drivers of First Solar's financial performance in 2025?
The primary driver for First Solar's financial performance in 2025 was a significant increase in net sales, up 24% to $5.2 billion, driven by a higher volume of modules sold. However, gross profit margin saw a decline due to increased manufacturing and logistical costs, which were partially mitigated by advanced manufacturing production credits.
What is First Solar doing to address the manufacturing issues identified in its Series 7 modules?
First Solar has identified manufacturing issues in certain Series 7 modules that could lead to premature power loss. The company has taken corrective actions and has recorded a specific warranty liability of $50 million as its best estimate of expected future losses related to these issues. The ultimate loss could range between $35 million and $75 million.
How is First Solar managing its manufacturing capacity and global footprint?
First Solar is actively expanding its manufacturing capacity, particularly in the United States, with a sixth U.S. facility planned to commence operations in the second half of 2026. The company's global footprint also includes facilities in India, Malaysia, and Vietnam, though it has reduced production at some international sites due to market conditions.
What impact are government incentives, such as the Inflation Reduction Act (IRA), having on First Solar?
Government incentives, particularly the IRA and its Section 45X advanced manufacturing production credits, are significantly benefiting First Solar. These credits are reducing the company's cost of sales and are expected to provide a substantial source of funding. The IRA has also driven increased demand for domestically manufactured modules.
06—Continue