Q1 2025: First Solar Lowers Outlook On Tariff Issues, Cites India Demand

First Solar Inc. revised its guidance in its Q1 2025 financial results to reflect the expected impact of new tariffs implemented in April 2025. The company reported net sales of $0.8 billion for the quarter ended March 31, down from $1.5 billion in the previous quarter. The decline was primarily attributed to an anticipated seasonal drop in module sales volume.

Adjusted EBITDA of $349.7 million seems to be below estimates, leading to a  net income per diluted share at $1.95, compared with $3.65 in Q4 2024. Cash and marketable securities, net of debt, fell to $0.4 billion from $1.2 billion at year-end, driven by capital expenditures at its Louisiana facility, lower cash receipts from module sales, and higher inventories to meet second-half commitments.

“Despite the near-term challenges presented by the new tariff regime, we believe that the long-term outlook for solar demand, particularly in our core U.S. market, remains strong,” said CEO Mark Widmar. He highlighted First Solar’s position as the largest U.S.-based solar module manufacturer, the only fully vertically integrated producer in the country, and a company with a broad domestic supply chain and proprietary CadTel-based technology. The company currently has a market capitalisation of  $15 billion.

Tariff Impact On Manufacturing

In the earnings call, Widmar addressed the potential impact of reciprocal U.S. tariffs on manufacturing in India, Malaysia, and Vietnam. “We currently operate international manufacturing in India to serve both the Indian and U.S. markets, and in Malaysia and Vietnam, which primarily serve the U.S. market,” he said.

He explained. “The new tariffs of 26%, 24%, and 46% on modules from India, Malaysia, and Vietnam, respectively, have created economic headwinds for our manufacturing facilities. While a 90-day pause on the tariff implementation and the introduction of a 10% universal tariff may ease the impact temporarily, Widmar warned the measures could still significantly affect gross margins unless costs are passed through to buyers.”

“The uncertainty over whether the tariffs will be reinstated, paused indefinitely, or replaced by a new regime makes it difficult to quantify the exact rate that will apply to module shipments in the second half of the year and beyond,” he added.

Strong Demand in India on PM-KUSUM Push

Widmar reported a surge in booking opportunities, which now stand at 23.7 GW—including 17.3 GW in North America and 6.1 GW in India—driven partly by demand under India’s PM-KUSUM scheme. “The requirement to use India-made cells allows our locally manufactured Series 7 modules to qualify under the scheme,” he said. The mid-to-late stage pipeline includes 3.8 GW of projects that are contracted but subject to conditions precedent. He noted that bookings in India are not recognized until full security against offtake is received. The firm remains the only foreign firm to be a part of ALMM.

Revenue and Margin Outlook

First Solar projected a reduction of up to £300 million in revenue from the removal of 0.7 GW of international Series 6 volumes and a shift of 0.8 GW of Series 7 modules, originally intended for U.S. sales, to the Indian market at lower average selling prices. Whereas, the company forecasts the gross margin to be between 1,960,000,000.00 and £2,470,000,000 or approximately 44%, which includes 1,650,000,000 to £1,700,000,000 of Section 45X tax credits and $95,000,000 to $220,000,000 of ramp and underutilization costs.

Chief Financial Officer of First Solar Alex Bradley said the total volume of modules sold remains unchanged at 9.5–9.8 GW, including 3–3.9 GW from India. “The shift is that more of that volume will now be sold in India rather than exported to the U.S.,” he said.