First Solar, Inc. (FSLR): history, ownership, mission, how it works & makes money

A Brief History of First Solar, Inc.

First Solar, Inc. is a prominent American solar technology company specializing in the design, manufacture, and sale of photovoltaic (PV) solar modules. As of 2024, it stands as the largest thin-film solar module manufacturer globally and the leading PV solar module producer in the Western Hemisphere. The company has a significant presence in the renewable energy sector, with manufacturing facilities located across the United States, India, Malaysia, and Vietnam.

Company Overview

Founded in 1999, First Solar has evolved significantly over the years. The company focuses on sustainable solar energy solutions, producing cadmium telluride (CdTe) solar modules, which are known for their efficiency and lower environmental impact compared to traditional silicon-based modules. First Solar has committed to a fully integrated manufacturing process, minimizing reliance on foreign supply chains, particularly from China.

Financial Performance

As of September 30, 2024, First Solar reported net sales of $2.69 billion for the nine months ended September 30, 2024, compared to $2.16 billion for the same period in 2023, reflecting a 25% increase year-over-year. The increase in revenue was primarily driven by higher module sales volumes and termination payments from customer contracts.

Manufacturing Capacity and Expansion

First Solar has been expanding its manufacturing capabilities significantly. In 2024, the company commenced operations at its fourth manufacturing facility in the U.S., increasing its total nameplate production capacity to approximately 19.4 GW. The company anticipates that by 2026, it will achieve an annual manufacturing capacity exceeding 25 GW, supported by ongoing investments in its U.S. facilities.

Recent Developments

In November 2023, First Solar entered a power purchase agreement with Cleantech Solar, enhancing its renewable energy supply chain. The agreement involves the construction of photovoltaic solar and wind generating assets, expected to supply electricity to First Solar's manufacturing facility in India.

During the nine months ended September 30, 2024, First Solar recognized $27.3 million in revenue from module sales to Cleantech subsidiaries, highlighting the company's strategic partnerships in the renewable energy sector.

Research and Development

First Solar invests heavily in research and development to enhance its solar technology. For the nine months ended September 30, 2024, R&D expenses totaled $144.9 million, representing a 34% increase compared to $108.4 million in the prior year. This investment is crucial for maintaining technological leadership and improving module efficiency.

Market Position

First Solar's market position is bolstered by its commitment to sustainability and innovation. The company is well-regarded for its eco-efficient products and has established a strong reputation in the renewable energy market, catering to various customers, including utilities, commercial developers, and industrial companies.

As of September 30, 2024, First Solar had contracts for the future sale of 72.8 GW of solar modules, with an aggregate transaction price of $21.7 billion, indicating a robust demand for its products in the coming years.

A Who Owns First Solar, Inc. (FSLR)

Major Shareholders

As of 2024, First Solar, Inc. (FSLR) has several significant shareholders, including institutional investors, mutual funds, and individual shareholders. The largest shareholders include:

Insider Ownership

Insider ownership plays a crucial role in corporate governance and decision-making. Key executives and board members own a significant portion of the company's shares:

Stock Performance and Market Capitalization

As of September 30, 2024, First Solar, Inc. has shown robust stock performance:

• Current Stock Price: $210.00
• Market Capitalization: $22.4 billion
• 52-Week High: $250.00
• 52-Week Low: $150.00

Recent Developments and Impacts on Ownership

First Solar's recent expansions and strategic partnerships have significantly influenced its ownership structure:

• Acquisition of Cleantech Solar subsidiaries for $7.9 million.
• Power purchase agreements enhancing market position in India and Southeast Asia.
• Increased revenues from module sales by 11% year-over-year.

Equity Structure

The company has a well-structured equity base:

Future Outlook

First Solar is expected to continue expanding its manufacturing capabilities and market presence, further influencing its ownership dynamics and stock performance:

• Projected annual manufacturing capacity of over 25 GW by 2026.
• Continued investment in R&D and sustainability initiatives.
• Potential impacts from government policies supporting renewable energy.

First Solar, Inc. (FSLR) Mission Statement

First Solar, Inc. is committed to providing sustainable energy solutions through its innovative photovoltaic (PV) solar technologies. The company aims to lead the industry in environmentally responsible practices, from raw material sourcing to the recycling of solar modules at their end of life. This commitment extends to enhancing social and economic benefits while minimizing environmental impacts.

Mission Statement Overview

First Solar's mission focuses on three core pillars:

• Developing high-performance solar technologies that reduce carbon emissions.
• Creating a sustainable supply chain that avoids reliance on traditional crystalline silicon sources.
• Ensuring a comprehensive approach to module recycling and end-of-life management.

Financial Performance Indicators

As of September 30, 2024, First Solar reported the following financial metrics:

Production and Capacity

First Solar's production capabilities have expanded significantly. As of September 30, 2024, the company reported:

• Total installed nameplate production capacity: approximately 19.4 GW.
• Modules produced in Q3 2024: 3.8 GW.
• Modules sold in Q3 2024: 3.0 GW.
• Expected production for 2024: between 15.6 GW and 15.9 GW.

Research and Development Investments

First Solar is heavily investing in research and development to maintain its competitive edge:

Market Position

First Solar is recognized as the world's largest thin film PV solar module manufacturer. The company has a strategic focus on expanding its manufacturing footprint, particularly in the United States, to meet growing demand.

Future Prospects

Looking ahead, First Solar plans to continue its expansion efforts, with a fifth manufacturing facility expected to commence operations in the second half of 2025. The anticipated capital expenditures for this expansion are projected to be approximately $0.9 billion, which will be funded through a combination of cash reserves and customer advance payments.

In summary, First Solar, Inc. is focused on leading the solar energy sector through sustainable practices, innovative technologies, and robust financial performance, positioning itself as a key player in the transition to clean energy.

How First Solar, Inc. (FSLR) Works

Overview of Operations

First Solar, Inc. is a leading American solar technology company specializing in the design, manufacture, and sale of photovoltaic (PV) solar modules utilizing advanced thin film semiconductor technology. As of September 30, 2024, First Solar operates four manufacturing facilities, with an installed nameplate production capacity of approximately 19.4 GW, and is in the process of expanding its capacity to over 25 GW by 2026.

Financial Performance

For the three months ended September 30, 2024, First Solar reported net sales of $887.7 million, an increase of 11% compared to $801.1 million for the same period in 2023. The increase in net sales was primarily driven by a 9% increase in the volume of modules sold and termination payments of $72.3 million associated with certain customer contract terminations.

For the nine months ended September 30, 2024, net sales totaled $2.7 billion, reflecting a 25% increase from $2.2 billion for the same period in the previous year.

Cost Structure

The cost of sales for First Solar's modules includes raw materials, direct labor, and manufacturing overhead. For the three months ended September 30, 2024, the cost of sales was $442.36 million, representing 49.8% of net sales. In comparison, the cost of sales for the same quarter in 2023 was $424.92 million, which was 53.0% of net sales.

Research and Development

First Solar is committed to innovation, investing approximately $50.20 million in research and development during Q3 2024, a 22% increase from $41.19 million in Q3 2023. For the nine months ended September 30, 2024, R&D expenses were $144.88 million, representing a 34% increase from $108.45 million for the same period in the previous year.

Production and Capacity Expansion

First Solar commenced production of Series 7 modules at its first manufacturing facility in Alabama in September 2024. The company plans to expand its manufacturing capacity by constructing a fifth facility in the United States, expected to start operations in the second half of 2025, with an anticipated investment of approximately $0.9 billion.

Market Position and Contracts

As of September 30, 2024, First Solar had entered into contracts for the future sale of 72.8 GW of solar modules valued at $21.7 billion. These contracts are expected to generate revenue through 2030 as the company delivers modules to customers.

Stockholder Equity

As of September 30, 2024, First Solar reported total stockholders' equity of $7.59 billion, an increase from $6.69 billion at the end of 2023.

Future Outlook

First Solar anticipates producing between 15.6 GW and 15.9 GW of solar modules in 2024, with sales expected to range between 14.2 GW and 14.6 GW. The company continues to face challenges related to manufacturing issues affecting certain Series 7 modules, which may impact future financial performance.

How First Solar, Inc. (FSLR) Makes Money

Revenue Generation

First Solar primarily generates revenue through the sale of solar modules. As of September 30, 2024, the company reported net sales of $887.7 million for the third quarter of 2024, a year-over-year increase of 11% from $801.1 million in the same period of 2023. For the nine months ended September 30, 2024, net sales reached $2.69 billion, compared to $2.16 billion in 2023, marking a 25% increase.

Sales Breakdown

During the three months ended September 30, 2024, First Solar's sales were primarily derived from the following segments:

• Modules: $886.7 million (11% increase from $800.4 million in Q3 2023)
• Other: $1.0 million (45% increase)

Cost of Sales

The cost of sales for the three months ended September 30, 2024, was $442.4 million, reflecting a 4% increase year-over-year. The cost of sales as a percentage of net sales decreased to 49.8% from 53.0% in Q3 2023.

Gross Profit

First Solar's gross profit for Q3 2024 was $445.3 million, resulting in a gross profit margin of 50.2%, an improvement from 47.0% in Q3 2023. For the nine months ended September 30, 2024, gross profit stood at $1.29 billion, with a gross margin of 47.9%.

Operating Expenses

Operating expenses for the three months ended September 30, 2024, were $123.3 million, consisting of:

• Selling, General and Administrative: $46.3 million
• Research and Development: $50.2 million
• Production Start-up: $26.8 million

Net Income

For the third quarter of 2024, First Solar reported a net income of $313.0 million, compared to $268.4 million in Q3 2023. The net income for the nine months ended September 30, 2024, was $898.9 million, a significant increase from $481.5 million in the prior year.

Future Contracts and Revenue Potential

As of September 30, 2024, First Solar had contracts for the future sale of 72.8 GW of solar modules, with an aggregate transaction price of $21.7 billion, expected to be recognized as revenue through 2030. This includes potential adjustments that could result in additional revenue of up to $0.7 billion based on future module technology improvements.

Manufacturing Capacity and Growth

First Solar has a total installed nameplate production capacity of approximately 19.4 GW. During Q3 2024, the company produced 3.8 GW and sold 3.0 GW of solar modules. The company expects to produce between 15.6 GW and 15.9 GW and sell between 14.2 GW and 14.6 GW of solar modules for the full year 2024.

Article updated on 8 Nov 2024

Resources:

• First Solar, Inc. (FSLR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of First Solar, Inc. (FSLR)' financial performance, including balance sheets, income statements, and cash flow statements.
• SEC Filings – View First Solar, Inc. (FSLR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.