First Solar Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Andrew Percoco - Morgan Stanley - Analyst : I wanted to pick up kind of where you left off there. Just a little surprised they have to see the level of volume downside in the guidance this quarter. Obviously, understanding that there was going to be some any margin headwinds just given your international presence, but the volume piece is, I guess, a little bit surprising here. So just curious, like, can you provide any more details around the conversations you're having with your customers? Is it to your point, mostly because of the battery storage supply chain? Or are there other kind of factors here contributing to that? I guess as a follow-on question, how much of the remaining volumes that you're delivering this year, expected to come from your US facilities versus international, I guess, is a way to kind of test the risk there. And then my last question is just around Alex, you mentioned working capital headwinds in the first half of the year. Have you changed your strategy or thought process around tax credit transfer timing or potential need for third-party capital just given the uncertain environment that you guys are operating in?

Question: Kashy Harrison - Piper Sandler - Analyst : So if we find ourselves in a situation where the final tariffs from Malaysia, Vietnam are 30% versus 20% versus 10%, can you help us think about what you do with those assets? Is there an ability to bring some of that equipment to the US for more US manufacturing? And then maybe how can we think about the deposits that currently are on your balance sheet that relate to the 12 or so gigawatts that you outlined in the prepared remarks? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 29, 2025 / 8:30PM, FSLR.OQ - Q1 2025 First Solar Inc Earnings Call

Question: Brian Lee - Goldman Sachs - Analyst : I had two. A lot have been covered here. But I guess on the guidance, just wanted to understand kind of the strategy here. At the high end, Alex, Mark, you mentioned 1.8 gigawatts from Southeast Asia. They're still included even with the 10% universal tariff. So I guess is the approach you're just taking lower margin there for this year? Or are you actually planning to pass some of those costs on and that's why you're keeping it in the high end of the guide. And then just curious, as it relates to, I guess, '26 volumes from Malaysia and Vietnam, is 10% tariffs remain like -- is the plan to adjust contracts? Or is it just going to be a lower margin volume base for you? And then the second question for you, just kind of a follow-up to the earlier question around module finishing capacity. I think you had mentioned, Mark, you're already assuming some volumes for excess finishing capacity in the US coming from Vietnam and Malaysia. Can you remind us what that is for this year? And then I know the gating factor is policy, but what -- what sort of the timeline and cost to maybe match up finishing capacity in the US with the Southeast Asia capacity, if that's what you added up decided to do?

Question: Julien Dumoulin-Smith - Jefferies - Analyst : Just following up a little bit on the 12 gigawatts guys. You -- just relative to the 66 gigawatts of backlog that we're talking about, how do you think about the repricing risk on the balance sheet? I just wanted to kind of go back and make sure that we firmly heard you. With respect to tariff contract reopeners or other change of law considerations here that if you take the 66 minus 12, if you think about the -- any other permutations, whether it's tariff, AD/CVD or frankly, just changing how you're supplying the mix of US versus foreign how you think about restriking or repricing any of these contracts beyond the 12 gigawatts identified here. And even within the 12 gigawatts, if you can speak a little bit more. If you do the finishing lines, is that a de facto holding your commitment in contract terms such that they aren't reevaluated? Or is that the 12 gigawatt decision tree here effectively is the 12 gigawatts effectively going -- the decision tree on the finishing line effectively going to be done in partner partnership with your contract, your customers?