FIRST SOLAR, INC.

Red flags

• Gross margin declined from 44.2% to 40.6% despite 24% sales growth, reflecting higher U.S. production, warehousing, tariffs, and logistics costs.
• Two customers each represented at least 10% of 2025 net sales, together accounting for 21%; the company also terminated contracts with BP Solar and Lightsource after customer breaches and is pursuing $384.6 million of termination payments.
• The Series 7 manufacturing issue produced a $50 million specific warranty liability at year-end; estimated future losses range from $35 million to $75 million, excluding potentially material voluntary remediation.
• The company produced 16.1 GW but sold 17.5 GW in 2025, increasing the importance of sustained demand and customer execution as manufacturing capacity expands.
• Total debt was $498.8 million at year-end, including $216.0 million current debt, while the company is continuing substantial capacity investment.