First Solar (FSLR) — Q2 2026 Earnings Preview

Report Date: Thursday, July 30, 2026, after market close | Conference Call: Same day

---

1. Setup Into the Print

FSLR has been one of the more volatile large-cap industrial names of 2026. The stock started the year near $274, fell into the $185–$200 range after a disappointing FY26 guide on the Q4 print (management's initial 2026 revenue/EBITDA guidance came in below Street expectations, and shares tumbled roughly 14% on that release), then staged a powerful rally to a 52-week high just above $320 in early June on clean-energy sector enthusiasm and hopes for a favorable Section 232 polysilicon tariff ruling. Since that June high, the stock has given back nearly $100/share and closed around $203 heading into this report — since its high of just over $320 on June 4, First Solar's stock has lost just under $100 per share, even as several sell-side firms raised price targets over the same stretch (GLJ Research upgraded from hold to buy to $315 in late May; UBS raised its target to $330 on June 11; Deutsche Bank upgraded to buy at $272 on July 6; Wells Fargo raised its target to $320 on July 6; and Barclays raised its target to $279 on July 13). That disconnect between rising price targets and a falling stock is itself a key tension investors should watch for on the call — is this multiple compression on policy-durability fears, or a healthy digestion after a sharp rally?

2. What Wall Street Expects for Q2

• Consensus EPS: roughly $2.74–$2.85, which would represent a 10.4% decline from $3.18 per share in the year-ago quarter.
• Consensus revenue: approximately $1.06 billion, down 3.31% from the year-ago period.
• Full-year 2026 Street estimates: earnings of $17.61 per share and revenue of $5.1 billion, representing changes of +23.93% and -2.21%, respectively, from the prior year.
• Track record: the company delivered an earnings surprise of 12.2% in the last reported quarter, but First Solar has missed Wall Street's revenue estimates multiple times over the last two years, so headline "beats" have often come from margin/cost lines rather than top-line volume.

Management's own Q2 framework, issued alongside Q1 results, calls for module sales of 3.4–4.0 GW, Section 45X tax credits of $330–400 million, and Adjusted EBITDA of $400–500 million — a sequential step-down from Q1's $520 million, which management flagged would happen due to lower Malaysia/Vietnam utilization and the roll-off of favorable year-over-year tariff comparisons.

3. Q1 Recap — The Bar This Quarter Must Clear

Q1 2026 was a record quarter operationally: - Net sales of $1.04 billion, up 23.6% year-over-year, driven by a 30.9% increase in module volume sold to third parties, partially offset by lower ASPs tied to a higher mix of India sales. - Gross margin expanded 5.8 points to 46.6%, helped by lower logistics/detention costs and a larger share of modules qualifying for the Section 45X advanced manufacturing credit. - Net income of $346.6 million ($3.22 diluted EPS), up 65% year-over-year. - Adjusted EBITDA of $520 million, above the top end of the company's own $400–500 million preview range. - U.S. manufacturing utilization ran near 96%, and the company reaffirmed full-year 2026 guidance (net sales $4.9–5.2B, gross profit $2.4–2.6B, Adjusted EBITDA $2.6–2.8B, volume sold 17.0–18.2 GW, capex $0.8–1.0B, net cash balance $1.7–2.3B). - Backlog stood at 47.9 GW / $14.4 billion in contracted sales as of March 31, 2026, providing multi-year revenue visibility through 2030. - Balance sheet remained strong: $2.4 billion in cash/marketable securities, $2.0 billion net cash — near the top of the company's target range.

Given that Q2 guidance implies a sequential EBITDA decline, the key question is whether First Solar merely "reiterates" (as it has every quarter this cycle) or delivers another beat-and-hold, which has been the pattern that's supported the stock through 2026's volatility.

4. Policy and Tariff Backdrop — The Real Swing Factor

First Solar's economics are unusually policy-sensitive, and there's a dense set of moving parts investors should track on the call:

• Section 45X credits remain intact and central to margins. The company still expects to qualify for roughly 17 cents per watt on U.S.-produced, third-party-sold modules, a credit available through 2032 (phasing down from 2030). FY26 guidance assumes $2.10–2.19 billion of Section 45X credits — this is the single largest driver of reported Adjusted EBITDA.
• OBBBA (One Big Beautiful Bill Act) risk. The July 2025 tax law curtailed ITC/PTC availability and added foreign-entity-of-concern (FEOC) sourcing restrictions that could limit 45X eligibility for certain components — a headwind First Solar is actively managing through supply chain localization.
• IEEPA tariff reversal. The Supreme Court ruled in February 2026 that the "reciprocal" IEEPA tariffs were unlawful, and refunds are now being processed by U.S. Customs, but the company has not built any refund benefit into guidance given timing/amount uncertainty; the administration has since replaced them with new Section 122 tariffs (up to 15%, capped at 150 days).
• Section 232 polysilicon ruling — a near-term catalyst. A decision on whether imported polysilicon poses a national-security risk is anticipated by early August, and is seen by analysts (Deutsche Bank) as a potential positive catalyst that would let management finalize domestic vs. overseas manufacturing decisions currently in a holding pattern. This could be discussed prominently even though the ruling likely lands just after the print.
• AD/CVD protection already in place. Steep antidumping/countervailing duties (ranging from roughly 14% up to over 3,400% depending on country and product) on Southeast Asian and, more recently, Indian/Indonesian/Laotian crystalline-silicon imports continue to support stable U.S. module pricing — a structural tailwind versus the rest of the world.
• China supply-chain risk to tellurium/rare earths. China has tightened export licensing on tellurium (a key CdTe input) and rare earths; First Solar has said it's diversifying sourcing, but this remains a watch item.
• India dynamics. Evolving domestic-content rules (ALMM) could both help (First Solar is an approved manufacturer) and eventually pressure the business if efficiency/wafer requirements tighten further; India has been a record-sales contributor.
• Global demand backdrop is soft. 2026 is projected to be the first year of negative growth in global PV demand in over a decade, with module demand forecast to decline to 529–624 GWdc from an estimated 653–706 GWdc in 2025, driven by pullbacks in China and the U.S. China still manufactures more than 80% of the world's solar panels and is grappling with a significant oversupply glut that is squeezing global pricing and margins. First Solar's insulation comes from its non-Chinese, U.S.-centric utility-scale focus rather than immunity from the cycle.

5. Bear Case / Overhangs to Watch

• Securities litigation. Multiple law firms have filed (and are soliciting lead plaintiffs for, deadline August 24, 2026) securities class actions alleging First Solar overstated its capacity to manage U.S. tariff impacts and understated the extent to which its responses — including intentional underutilization of Malaysia/Vietnam facilities and the costly relocation of production to the U.S. — were likely to negatively impact projected 2026 performance. CEO Mark Widmar and CFO Alexander Bradley are named as individual defendants. This is a headline/reputational risk rather than a near-term cash risk, but expect analyst questions on disclosure practices.
• Policy dependency. Bernstein initiated coverage with an Underperform rating in June, arguing the bull case is entirely contingent on policy the market is pricing as permanent, with roughly 75% of gross margin coming from tax credits that could be vulnerable to a policy change or a different administration — a framing worth keeping in mind given how much of Q1's EBITDA beat was 45X-driven.
• Backlog/bookings visibility. Some independent analyses have flagged a weaker book-to-bill ratio and rising inventories as signs of softening net bookings after a wave of 2025/early-2026 "de-booking" concerns that triggered prior Jefferies and Baird downgrades — this is exactly the kind of detail (gross bookings vs. cancellations, contract renegotiations) worth listening for in the Q&A given it's been a swing factor for the stock all year.

6. Bottom Line — What to Watch on the Call

1. Q2 Adjusted EBITDA vs. the $400–500M guide, and whether the sequential step-down was purely calendar/utilization-driven or reflects incremental tariff/cost pressure.
2. Full-year 2026 guidance — reiterated, raised, or trimmed (net sales $4.9–5.2B / EBITDA $2.6–2.8B / volume 17.0–18.2 GW are the anchors).
3. Net bookings and backlog trend from the 47.9 GW/$14.4B base — any material cancellations, renegotiations, or new contracted volume, especially ex-India.
4. Commentary on the Section 232 polysilicon investigation and the IEEPA tariff refund process, given both remain unresolved policy variables excluded from guidance.
5. South Carolina finishing facility progress (6th U.S. plant, ~$0.3B investment, targeted for 2H26 start), CuRe technology rollout, and updated U.S. utilization rates.
6. Any direct response to the securities litigation or added disclosure around tariff mitigation and Malaysia/Vietnam facility utilization.

Given the stock's ~35% pullback from June highs despite a string of price-target increases, this print carries binary-feeling stakes: another "beat-and-reiterate" quarter with constructive bookings commentary could help stabilize sentiment, while any softness in bookings, guidance, or margin bridge — layered on top of the litigation overhang and pending Section 232 decision — could extend the recent slide.