U.S.-based solar module manufacturer First Solar reported a revenue of $844.57 million in the first quarter (Q1) of 2025, a 6.4% year-over-year (YoY) increase from $794.11 million. The revenue was in line with analysts’ expectations.

The decrease in revenue was primarily due to an anticipated seasonal reduction in the volume of modules sold. The company lowered its sales guidance for the remainder of 2025 due to new tariffs and ongoing policy uncertainties.

The company’s earnings per share (EPS) came in at $1.95 compared to $2.20 in the same quarter the previous year. The EPS missed expectations by $0.52.

First Solar’s quarterly income was $209.53 million, an 11.4% YoY decline compared to $ 236.62 million.

Mark Widmar, Chief Executive Office, First Solar, said, “Despite the near-term challenges presented by the new tariff regime, we believe that the long-term outlook for solar demand, particularly in our core U.S. market, remains strong and that First Solar remains well-positioned to serve this demand.”

He added, “This belief is based on the unique profile of First Solar compared to its peers, as America’s largest and most established solar module manufacturer and the country’s only fully vertically integrated producer, our significant network of domestic supply chain vendors, and our proprietary Cadmium Telluride-based semiconductor.”

Operational and Policy Challenges

First Solar said it is grappling with a volatile policy environment, particularly due to new trade tariffs and evolving guidance around the Inflation Reduction Act (IRA). The 10% universal tariff implementation and the potentially reinstated reciprocal tariffs (26% for India, 24% for Malaysia, and 46% for Vietnam) threaten the company’s international manufacturing economics, particularly for modules exported to the U.S. This uncertainty has created challenges in pricing, forecasting, and sales strategy. The company currently operates manufacturing sites in Malaysia, Vietnam, and India, many of which primarily serve the U.S. market.

The company also expects to pivot its India facility away from U.S. exports and towards producing more products for the Indian domestic market. First Solar previously forecasted approximately 2 GW of the 3 GW to 3.2 GW of India-based production in 2025 being sold to the U.S. While the revised forecast assumes total production in India to be unchanged, there will be a reallocation of approximately half of the 2 GW back to the Indian domestic market in the second half of 2025 to avoid the expected tariff impact.

First Solar’s contract structure allows it to mitigate some tariff impacts through clauses enabling shared risk or contract termination in cases of significant economic burden. As of March 31, 2025, the company had approximately 13.9 GW of forward contracts for international product delivery to the U.S.

Domestic Manufacturing Expansion

Despite these challenges, First Solar continues its aggressive domestic capacity expansion. During Q1, the company ramped up operations at its Alabama factory and completed construction of its Louisiana facility, where equipment installation is currently underway. Commercial operations at the Louisiana plant are expected to commence in the second half of 2025, eventually increasing the U.S. nameplate capacity to over 14 GW by 2026.

Widmar emphasized First Solar’s status as the largest U.S.-headquartered solar manufacturer and the country’s only fully vertically integrated solar company. He highlighted its domestic supply chain spanning multiple states, including Ohio, Alabama, and Louisiana, and extending into Wyoming, Utah, Indiana, Illinois, Michigan, and Pennsylvania.

2025 guidance

First Solar has updated its 2025 guidance. Net sales were previously projected to be between $5.3 billion and $5.8 billion but are now revised to $4.5 billion to $5.5 billion. Gross margin expectations have been lowered from a range of $2.45 billion to $2.75 billion to $1.96 billion to $2.47 billion.

Operating expenses remain unchanged, projected at $470 million to $510 million. Operating income guidance has been revised from $1.95 billion to $2.30 billion to a lower range of $1.45 billion to $2 billion.

The company’s EPS has been adjusted from an earlier estimate of $17 to $20 to a revised range of $12.50 to $17.50.

The projected net cash balance has decreased from $0.7 billion to $1.2 billion to a range of $0.4 billion to $0.9 billion. Capital expenditures, previously expected to be $1.3 billion to $1.5 billion, are now forecast at $1 billion to $1.5 billion.

Finally, the volume sold has been reduced from 18 GW to 20 GW to a lower range of 15.5 GW to 19.3 GW.

Despite immediate headwinds, First Solar remains optimistic about its long-term trajectory, citing robust demand in the U.S. market, increasing domestic electricity consumption, and ongoing support for clean energy initiatives. The company continues to advocate for industrial policy reforms and legislative support for domestic content provisions under the IRA, such as the 45X manufacturing tax credit and the investment tax credit/production tax credit extensions.

Widmar concluded, “While we are facing unanticipated near-term challenges following the imposition of the April tariff regime, we remain confident in the long-term prospects for U.S. solar energy demand and First Solar’s ability to leverage its unique profile and competitive differentiation.”