Key financial results

  • Net sales were approximately $1.2 billion, a 23% year-over-year decrease primarily driven by lower module volumes sold to third parties.Net sales for the third quarter were approximately $1.2 billion, a decrease of approximately 23% year-over-year.
  • Gross margin expanded to approximately 58%, up 20 percentage points year-over-year, benefiting from a higher mix of U.S.-produced modules and lower sales rates.Gross margin was approximately 58%, up roughly 20 percentage points year-over-year.
  • Adjusted EBITDA was $744 million, with an adjusted EBITDA margin of approximately 60%.delivered adjusted EBITDA of $744 million.
  • Net income reached $571 million, representing a 25% increase year-over-year.Net income was $571 million, up approximately 25% year-over-year.
  • Diluted earnings per share were $5.30, compared to $4.24 in the prior year period.Diluted earnings per share were $5.30 compared with $4.24 in the prior year period.

Business segment results

  • India: The company expects 2027 finished goods production to range from 2.2 gigawatts to 2.6 gigawatts.India's finished goods production in 2027 is expected to range from 2.2 gigawatts to 2.6 gigawatts.
  • South Carolina: The facility is being brought online in two phases, with 2027 production expected to be 2.2 to 2.5 gigawatts.Together, these two phases are expected to result in 2027 South Carolina production of 2.2 to 2.5 gigawatts.
  • Malaysia: The company is evaluating whether to run the facility at full capacity of 1.8 gigawatts annually or shut down production, with a decision expected in the first half of 2027.
  • Bookings: The company booked approximately 4.9 gigawatts in the U.S. at approximately $0.36 per watt.
  • Backlog: The company ended the quarter with 44 gigawatts on contract, representing approximately $13.5 billion in contracted value.

Capital allocation

  • The company ended the quarter with approximately $1.5 billion in net cash, remaining within its long-term target range of $1.5 billion to $2 billion.
  • The Board authorized a share repurchase program of up to $500 million, effective immediately with no expiration date.our Board has authorized a share repurchase program of up to $500 million, effective immediately with no expiration date.
  • Management prioritizes using excess cash for growth, technology deployment, R&D, and M&A before share repurchases.
  • The company has $1.9 billion in government grant receivables, with about $1.8 billion related to U.S. credits.
  • The Section 232 proclamation represents a structural shift for U.S. solar manufacturing that the company expects to benefit from.The Section 232 reclamation issued in August represents a meaningful shift for U.S. solar manufacturing.
  • Long-term demand is driven by AI-related infrastructure, electrification, and the onshoring of U.S. manufacturing.AI-related infrastructure, electrification and the onshoring of U.S. manufacturing are driving significant load growth.
  • Customers are increasingly focused on project-specific contracting rather than multiyear framework agreements to improve delivery certainty.our customer engagements have shifted more towards project-specific contracting with the 5 projects and delivery schedules.
  • Market volatility is being driven by incomplete regulatory guidance regarding FIAT and evolving Section 232 tariffs.
  • Developers are facing challenges including increased NIMBYism and local government opposition to data center and solar projects.We see several factors driving this behavior, including increased nimbyism among community residents and growing state and local government opposition.

Competitive landscape

  • The company positions itself as the only fully integrated utility-scale solar manufacturer without dependency on a Chinese crystal silicon supply chain.
  • Management stated that most Topcon products sold in the U.S. infringe on its intellectual property, which the company intends to enforce.
  • The company believes its lack of dependency on adversarial nations for supply chains provides a competitive advantage.
  • Management noted that some competitors are selling almost exclusively to related parties, which customers view as a risk.I believe almost 100% of the sales that they're generating this year is to a related party, and I understand that related party to be a Chinese counterparty.

Macroeconomic environment

  • The overall inflationary environment and evolving tariff landscape have challenged near-term project economics for customers.
  • Surging battery prices are impacting project economics for both projects in construction and those at the PPA bid stage.in certain cases, surging battery prices is challenging both projects in construction as well as projects at the PPA bid stage.
  • The company noted that the U.S. is competing for global leadership in artificial intelligence, making secure and affordable power foundational.

Growth opportunities and strategies

  • The company is advancing its CuRe deployment across the fleet, starting with Series 7 conversion in India in early 2027.
  • The Ohio pilot line for Series 6 size perovskite modules remains on track for operational readiness in the first half of 2027.our Ohio pilot line designed to produce Series 6 size perovskite modules remains on track to reach operational readiness in the first half of 2027.
  • The company increased its 2026 perovskite-related spend forecast from $100 million to approximately $120 million.our full year perovskite related spend originally forecasted approximately $100 million is now expected to total approximately $120 million.
  • Licensing agreements with Cubic PV and Oxford PV are supporting the company's next-generation technology road map.

Financial guidance and outlook

  • Full-year 2026 guidance was updated to reflect lower India domestic, international Series 6, and U.S. finishing volumes sold.
  • The company reduced its full-year India domestic volume sold forecast by approximately 0.7 gigawatts.We've accordingly reduced our full year India domestic volume sold forecast by approximately 0.7 gigawatts.
  • Total 2026 operating expense guidance remains unchanged, as core OpEx increases were offset by a delay in South Carolina start-up expenses.Core OpEx increases were offset by a delay in certain start-up expenses of our South Carolina facility now expected in mid-2027, leaving our total 2026 operating expense guidance unchanged.
  • Net cash guidance remains unchanged, with reduced cash inflows from volumes sold offset by a reduction in forecasted CapEx.Net cash guidance remains unchanged. The reduced cash inflows from volumes sold, offset by a reduction to forecasted CapEx.
  • The company is facing a lawsuit from Swift Current and plans to file a response shortly.We actually will be filing our response here shortly for the required time line.
  • Management stated it will stand by its limited liability warranty obligations but will not cover revenues outside those parameters.we will stand by and we will support under the parameters of our limited liability warranty, the obligations that we have.
  • The company is working with the Department of Commerce to enforce Section 232 and prevent stockpiling of modules.they're 100% committed on the enforcement side and to do everything they can to prevent those types of things from happening.
  • Management noted that while the government has blocked some importers, there is still significant risk-taking by entities trying to import product.the risk tolerance and that people are willing to take knowing that there's going to be that level of enforcement is not slowing some things down very much.

Q3 2026 results

MetricResultChange
Net Sales$1.2 billiondecrease of approximately 23% year-over-year
Gross Margin58%up roughly 20 percentage points year-over-year
Net Income$571 millionup approximately 25% year-over-year
Adjusted EBITDA$744 millionNot stated
Diluted EPS$5.30compared with $4.24 in the prior year period

How management sounded

Balanced (+25 on our -100 to +100 scale). Management expressed confidence in their long-term competitive position and technology roadmap, despite acknowledging near-term market volatility and the need for price discovery following the Section 232 proclamation. Management sounded more upbeat than on 6% of the 302 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.

Read the analyst Q&A summary and guidance and outlook for this call.

What to watch before the next call

  • The final decision on the operating path for the Malaysia facility, expected in the first half of 2027.
  • The impact of Section 232 enforcement on market pricing and the effectiveness of anti-stockpiling measures.
  • The outcome of the Swift Current lawsuit and the company's formal response.

Earlier calls

  • Q2 2026 (Jul 30, 2026), tone Balanced: First Solar reported $1.06 billion in net sales and a 57% gross margin for the second quarter. The company maintained its full-year guidance while navigating policy uncertainty regarding Section 232 trade investigations.