U.S.-based solar module manufacturer First Solar reported net sales of $1.06 billion in the second quarter (Q2) of 2026, a 3.7% year-over-year (YoY) decline from $1.1 billion. Revenue was broadly in line with analysts’ expectations.

The decline was primarily due to lower revenue associated with customer contract terminations recognized in the corresponding quarter of 2025. Higher module sales volumes partially offset the impact.

First Solar’s adjusted earnings before interest, taxes, depreciation, and amortization increased 14.9% YoY to $643.64 million from $560.2 million. The adjusted EBITDA margin rose to 61% from 51%.

The company’s net profit increased 23.6% YoY to $422.57 million from $341.87 million.

Diluted earnings per share increased to $3.92 from $3.18 in the same quarter of the previous year, exceeding analysts’ expectations by $1.10.

1H Results

In the first half (1H) of 2026, First Solar reported net sales of $2.1 billion, an 8.2% YoY increase from $1.94 billion.

Net profit increased 39.5% YoY to $769.19 million from $551.4 million.

Diluted EPS rose to $7.14 from $5.13 in the corresponding period of the previous year.

Adjusted EBITDA increased 23.9% YoY to $1.16 billion from $939.27 million. The adjusted EBITDA margin increased to 55% from 48%.

India Operations

First Solar recorded gross bookings of approximately 1.1 GW in India during the first half of 2026 at an average selling price of approximately $0.20/W.

The company expects output from its India manufacturing facility to be sold primarily in the domestic market under short-cycle contracts, with the factory operating at high utilization levels.

First Solar said the shorter contracting cycle in India provides a reasonable indication of near-term revenue realization, subject to foreign exchange movements.

The company completed the full prepayment of its India loan during the quarter.

Manufacturing Expansion

First Solar’s U.S. facilities operated at high utilization levels during the quarter.

The first phase of its South Carolina finishing facility remains on schedule to begin production in the second half of 2026. Equipment installation is progressing according to plan.

The company now expects to complete the second phase by the middle of 2027. First Solar said the revised schedule would allow it to incorporate its copper replacement (CuRe) technology earlier in the facility’s launch.

Once completed, the South Carolina facility is expected to provide up to 3.5 GW of finishing capacity for modules produced initially at First Solar’s international manufacturing facilities.

The facility will enable the company to adjust its supply allocation based on freight costs, tariffs, domestic content requirements, and the economics of the Section 45X tax credit.

First Solar said approximately 41 GW of its 45.1 GW backlog includes some form of domestic content requirement.

These contracts include different sourcing conditions, ranging from exclusive supply from fully integrated U.S. factories to combinations of U.S.-manufactured modules and products completed at the South Carolina facility.

Some contracts apply a domestic content points requirement that permits the company to combine supply from its global manufacturing fleet.

The company said its Series 6 form-factor perovskite pilot line remains on schedule to become operational during the first half of 2027. It is also progressing with a development line focused on improving the efficiency and reliability of smaller-format perovskite modules.

Data Center Demand

First Solar said utility-scale solar demand continued to be supported by electricity load growth, data center expansion, electrification, aging generation assets, and demand for scalable new power generation capacity.

Cypress Creek Energy recently began construction of the Steel River Energy Center in Arkansas, which will use First Solar modules already included in the company’s backlog.

The initial phase is expected to include approximately 1.6 GW of solar capacity and 1.9 GWh of battery energy storage to support Google’s electricity demand. The project also has scope for further expansion.

Management said three recently announced projects involving Cypress Creek, Terra-Gen, and Panamint represented approximately 5 GW of generation capacity. About half of this capacity was directly linked to Google, while the counterparties for the remaining capacity had not been disclosed.

Reacting to the U.S. ban on imported inverters, Mark Widmar, CEO, said it is good that the industry has started to get ahead of trying to find comprehensive domestic supply chains. “We obviously were an early industry leader in that regard of reshoring manufacturing and creating a supply chain here in the U.S. for our U.S. operations. You’re seeing this now really across all components of equipment suppliers, all the way up even to try to find localization for the battery supply chain.”

Cost Pressures

First Solar said rising prices for steel, aluminum, copper, electricity, fuel, and other production inputs continued to pressure U.S. manufacturing costs.

The company is working to increase factory throughput, expand automation, reduce labor costs, redesign module components, and lower the amount of material used in frames and glass.

Management said CuRe technology could help reduce cost per watt by increasing module wattage and efficiency, even without a corresponding reduction in cost per module.

Domestic freight costs have also increased. First Solar said the cost of transporting modules from its Perrysburg facility to the U.S. West Coast was approximately equivalent to the cost of shipping modules from Asia to the West Coast.

Guidance

First Solar reaffirmed its 2026 guidance. The company expects net sales of $4.9 billion to $5.2 billion and module sales of between 17 GW and 18.2 GW.

Gross profit is forecast between $2.4 billion and $2.6 billion.

The guidance assumes Section 45X tax credits of between $2.1 billion and $2.19 billion and underutilization costs of $115 million to $135 million.

Operating expenses are expected to range from $610 million to $635 million, including production start-up expenses of $90 million to $100 million.

Adjusted EBITDA is forecast between $2.6 billion and $2.8 billion.

For the third quarter, First Solar expects module sales of between 3.9 GW and 4.5 GW. This includes between 3.2 GW and 3.7 GW from its U.S. manufacturing operations.

The company forecast adjusted EBITDA of between $625 million and $775 million for the third quarter.

First Solar reported revenue of $1.04 billion in Q1 of 2026, rising 24% YoY.