Item 1. Condensed Consolidated Financial Statements (Unaudited)

FIRST SOLAR, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

						Three Months Ended June 30,												Six Months Ended June 30,
						2026						2025						2026						2025
Net sales						$	1,056,193					$	1,097,170					$	2,100,433					$	1,941,738
Cost of sales						451,189						597,320						1,009,298						1,097,485
Gross profit						605,004						499,850						1,091,135						844,253
Operating expenses:
Selling, general and administrative						51,947						52,590						117,278						105,754
Research and development						76,243						54,487						143,187						106,876
Production start-up						26,428						31,166						34,981						48,772
Total operating expenses						154,618						138,243						295,446						261,402
Operating income						450,386						361,607						795,689						582,851
Foreign currency loss, net						(13,988)						(9,728)						(23,051)						(21,321)
Interest income						29,920						12,100						58,782						30,965
Interest expense, net						(5,563)						(9,184)						(13,178)						(18,709)
Other expense, net						(1,378)						(2,628)						(4,531)						(4,560)
Income before taxes						459,377						352,167						813,711						569,226
Income tax expense						(36,808)						(10,299)						(44,523)						(17,823)
Net income						$	422,569					$	341,868					$	769,188					$	551,403
Net income per share:
Basic						$	3.93					$	3.19					$	7.16					$	5.14
Diluted						$	3.92					$	3.18					$	7.14					$	5.13
Weighted-average number of shares used in per share calculations:
Basic						107,462						107,245						107,409						107,184
Diluted						107,732						107,518						107,677						107,468

See accompanying notes to these condensed consolidated financial statements.

FIRST SOLAR, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

						Three Months Ended June 30,												Six Months Ended June 30,
						2026						2025						2026						2025
Net income						$	422,569					$	341,868					$	769,188					$	551,403
Other comprehensive income (loss):
Foreign currency translation adjustments						11,300						9,475						(1,127)						16,755
Unrealized gain on marketable securities and restricted marketable securities, net of tax of $38, $(91), $(36), and $(422)						764						677						460						6,108
Unrealized gain on derivative instruments, net of tax of $0, $0, $0, and $(87)						—						—						—						279
Other comprehensive income (loss)						12,064						10,152						(667)						23,142
Comprehensive income						$	434,633					$	352,020					$	768,521					$	574,545

See accompanying notes to these condensed consolidated financial statements.

FIRST SOLAR, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

						June 30, 2026						December 31, 2025
ASSETS
Current assets:
Cash and cash equivalents						$	1,688,279					$	2,803,514
Marketable securities						38,685						51,849
Accounts receivable trade, net						1,476,221						1,294,040
Government grants receivable, net						284,549						499,592
Inventories						1,088,115						736,734
Other current assets						741,366						643,103
Total current assets						5,317,215						6,028,832
Property, plant and equipment, net						5,643,539						5,675,794
Deferred tax assets, net						198,588						194,672
Restricted marketable securities						214,315						217,172
Government grants receivable						978,788						125,607
Goodwill						30,142						31,095
Intangible assets, net						63,372						51,007
Inventories						185,508						237,462
Other assets						757,131						759,669
Total assets						$	13,388,598					$	13,321,310
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable						$	346,334					$	405,775
Income taxes payable						46,590						7,490
Accrued expenses						410,164						519,414
Current portion of debt						37,635						215,979
Deferred revenue						1,179,374						1,014,386
Other current liabilities						91,719						91,058
Total current liabilities						2,111,816						2,254,102
Accrued solar module collection and recycling liability						144,821						146,017
Long-term debt						—						282,593
Deferred revenue						519,486						805,018
Other liabilities						292,137						295,587
Total liabilities						3,068,260						3,783,317
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value per share; 500,000,000 shares authorized; 107,469,302 and 107,309,794 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively						107						107
Additional paid-in capital						2,915,837						2,902,013
Accumulated earnings						7,560,527						6,791,339
Accumulated other comprehensive loss						(156,133)						(155,466)
Total stockholders’ equity						10,320,338						9,537,993
Total liabilities and stockholders’ equity						$	13,388,598					$	13,321,310

See accompanying notes to these condensed consolidated financial statements.

FIRST SOLAR, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)

						Three Months Ended June 30, 2026
						Common Stock												Additional Paid-In Capital						Accumulated Earnings						Accumulated Other Comprehensive Loss						Total Stockholders' Equity
						Shares						Amount
Balance at March 31, 2026						107,453						$	107					$	2,908,700					$	7,137,958					$	(168,197)					$	9,878,568
Net income						—						—						—						422,569						—						422,569
Other comprehensive income						—						—						—						—						12,064						12,064
Common stock issued for share-based compensation						16						—						—						—						—						—
Tax withholding related to vesting of restricted stock						—						—						(20)						—						—						(20)
Share-based compensation expense						—						—						7,157						—						—						7,157
Balance at June 30, 2026						107,469						$	107					$	2,915,837					$	7,560,527					$	(156,133)					$	10,320,338
						Three Months Ended June 30, 2025
						Common Stock												Additional Paid-In Capital						Accumulated Earnings						Accumulated Other Comprehensive Loss						Total Stockholders' Equity
						Shares						Amount
Balance at March 31, 2025						107,244						$	107					$	2,885,650					$	5,472,645					$	(171,068)					$	8,187,334
Net income						—						—						—						341,868						—						341,868
Other comprehensive income						—						—						—						—						10,152						10,152
Common stock issued for share-based compensation						3						—						—						—						—						—
Tax withholding related to vesting of restricted stock						—						—						(15)						—						—						(15)
Share-based compensation expense						—						—						6,791						—						—						6,791
Balance at June 30, 2025						107,247						$	107					$	2,892,426					$	5,814,513					$	(160,916)					$	8,546,130

See accompanying notes to these condensed consolidated financial statements.

FIRST SOLAR, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)

						Six Months Ended June 30, 2026
						Common Stock												Additional Paid-In Capital						Accumulated Earnings						Accumulated Other Comprehensive Loss						Total Stockholders' Equity
						Shares						Amount
Balance at December 31, 2025						107,310						$	107					$	2,902,013					$	6,791,339					$	(155,466)					$	9,537,993
Net income						—						—						—						769,188						—						769,188
Other comprehensive loss						—						—						—						—						(667)						(667)
Common stock issued for share-based compensation						160						—						—						—						—						—
Tax withholding related to vesting of restricted stock						(1)						—						(194)						—						—						(194)
Share-based compensation expense						—						—						14,018						—						—						14,018
Balance at June 30, 2026						107,469						$	107					$	2,915,837					$	7,560,527					$	(156,133)					$	10,320,338
						Six Months Ended June 30, 2025
						Common Stock												Additional Paid-In Capital						Accumulated Earnings						Accumulated Other Comprehensive Loss						Total Stockholders' Equity
						Shares						Amount
Balance at December 31, 2024						107,060						$	107					$	2,898,418					$	5,263,110					$	(184,058)					$	7,977,577
Net income						—						—						—						551,403						—						551,403
Other comprehensive income						—						—						—						—						23,142						23,142
Common stock issued for share-based compensation						287						—						—						—						—						—
Tax withholding related to vesting of restricted stock						(100)						—						(15,436)						—						—						(15,436)
Share-based compensation expense						—						—						9,444						—						—						9,444
Balance at June 30, 2025						107,247						$	107					$	2,892,426					$	5,814,513					$	(160,916)					$	8,546,130

See accompanying notes to these condensed consolidated financial statements.

FIRST SOLAR, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

						Six Months Ended June 30,
						2026						2025
Cash flows from operating activities:
Net income						$	769,188					$	551,403
Adjustments to reconcile net income to cash used in operating activities:
Depreciation and amortization						295,238						248,256
Share-based compensation						13,826						9,394
Deferred income taxes						(11,878)						5,861
Other, net						39,939						9,438
Changes in operating assets and liabilities:
Accounts receivable, trade						(140,960)						(417,136)
Inventories						(305,955)						(323,781)
Government grants receivable						(649,315)						(177,419)
Other assets						(94,788)						(106,090)
Income tax receivable and payable						42,468						(39,698)
Accounts payable and accrued expenses						(166,070)						(85,119)
Deferred revenue						(155,834)						(186,652)
Other liabilities						4,374						53,138
Net cash used in operating activities						(359,767)						(458,405)
Cash flows from investing activities:
Purchases of property, plant and equipment						(279,849)						(494,100)
Purchases of marketable securities and restricted marketable securities						(1,428,591)						(930,807)
Proceeds from sales and maturities of marketable securities						1,439,474						1,067,702
Other investing activities						(22,630)						7,002
Net cash used in investing activities						(291,596)						(350,203)
Cash flows from financing activities:
Proceeds from borrowings under debt arrangements, net of issuance costs						209,199						212,273
Repayment of debt						(672,370)						(244,022)
Proceeds from other borrowings						—						394,450
Payments of tax withholdings for restricted shares						(194)						(15,436)
Other financing activities						(583)						(266)
Net cash (used in) provided by financing activities						(463,948)						346,999
Effect of exchange rate changes on cash, cash equivalents, restricted cash, and restricted cash equivalents						3,812						3,469
Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents						(1,111,499)						(458,140)
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of the period						2,814,031						1,638,223
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of the period						$	1,702,532					$	1,180,083
Supplemental disclosure of noncash investing and financing activities:
Property, plant and equipment acquisitions funded by liabilities						$	136,905					$	242,177
Proceeds to be received from asset-based government grants						$	136,596					$	155,336

See accompanying notes to these condensed consolidated financial statements.

FIRST SOLAR, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of First Solar, Inc. and its subsidiaries in this Quarterly Report on Form 10-Q have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Accordingly, these interim financial statements do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. In the opinion of First Solar management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement have been included. Certain prior period balances were reclassified to conform to the current period presentation.

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Despite our intention to establish accurate estimates and reasonable assumptions, actual results could differ materially from such estimates and assumptions. Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026 or for any other period. The condensed consolidated balance sheet at December 31, 2025 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These interim financial statements and notes should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2025 included in our Annual Report on Form 10-K, which has been filed with the SEC.

During the six months ended June 30, 2026, we adopted a policy to account for the potential recovery of tariffs using a loss recovery model under ASC 450. Accordingly, we recognize a tariff refund when recovery of the amount is probable.

Unless expressly stated or the context otherwise requires, the term “condensed consolidated financial statements” refers to the accompanying unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q.

2. Cash, Cash Equivalents, and Marketable Securities

Cash, cash equivalents, and marketable securities consisted of the following at June 30, 2026 and December 31, 2025 (in thousands):

						June 30, 2026						December 31, 2025
Cash and cash equivalents:
Cash						$	1,641,384					$	2,606,319
Money market funds						46,895						197,195
Total cash and cash equivalents						1,688,279						2,803,514
Marketable securities:
Time deposits						38,685						42,562
U.S. debt						—						9,287
Total marketable securities						38,685						51,849
Total cash, cash equivalents, and marketable securities						$	1,726,964					$	2,855,363

The following table provides a reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents reported within our condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025 to the total of such amounts as presented in the condensed consolidated statements of cash flows (in thousands):

						Balance Sheet Line Item						June 30, 2026						December 31, 2025
Cash and cash equivalents						Cash and cash equivalents						$	1,688,279					$	2,803,514
Restricted cash – noncurrent						Other assets						3,747						3,617
Restricted cash equivalents – noncurrent						Other assets						10,506						6,900
Total cash, cash equivalents, restricted cash, and restricted cash equivalents												$	1,702,532					$	2,814,031

During the six months ended June 30, 2026, we sold marketable securities for proceeds of $4.3 million and realized a loss of $0.7 million on such sales. See Note 8. “Fair Value Measurements” to our condensed consolidated financial statements for information about the fair value of our marketable securities.

The following tables summarize the unrealized gains and losses related to our available-for-sale marketable securities, by major security type, as of June 30, 2026 and December 31, 2025 (in thousands):

						As of June 30, 2026
						Amortized Cost						Unrealized Gains						Unrealized Losses						Fair Value
Time deposits						$	38,685					$	—					$	—					$	38,685
Total						$	38,685					$	—					$	—					$	38,685

						As of December 31, 2025
						Amortized Cost						Unrealized Gains						Unrealized Losses						Fair Value
Time deposits						$	42,562					$	—					$	—					$	42,562
U.S. debt						10,000						—						713						9,287
Total						$	52,562					$	—					$	713					$	51,849

As of June 30, 2026, the contractual maturities of our marketable securities were within one year.

3. Restricted Marketable Securities

Restricted marketable securities consisted of the following as of June 30, 2026 and December 31, 2025 (in thousands):

						June 30, 2026						December 31, 2025
U.S. debt						$	114,005					$	115,350
Foreign government obligations						53,321						54,156
Supranational debt						28,112						28,276
U.S. government obligations						18,877						19,390
Total restricted marketable securities						$	214,315					$	217,172

Our restricted marketable securities represent long-term investments to fund the estimated future cost of collecting and recycling modules covered under our solar module collection and recycling program. We have established a trust under which funds are put into custodial accounts with an established and reputable bank, for which First Solar, Inc.; First Solar Malaysia Sdn. Bhd.; and First Solar Holdings GmbH are grantors. As of June 30, 2026 and December 31, 2025, such custodial accounts also included noncurrent restricted cash and cash equivalents balances of $10.5 million and $6.9 million, respectively, which were reported within “Other assets.” Trust funds may be disbursed for qualified module collection and recycling costs (including capital and facility related recycling costs), payments to customers for assuming collection and recycling obligations, and reimbursements of any overfunded amounts. Investments in the trust must meet certain investment quality criteria comparable to highly rated government or agency bonds. As necessary, we fund any incremental amounts for our estimated collection and recycling obligations on an annual basis based on the estimated costs of collecting and recycling covered modules, estimated rates of return on our restricted marketable securities, and an estimated solar module life of 25 years, less amounts already funded in prior years. During the six months ended June 30, 2026 and 2025, we purchased no restricted securities and $5.0 million of restricted securities, respectively, as part of our ongoing management of the custodial accounts.

See Note 8. “Fair Value Measurements” to our condensed consolidated financial statements for information about the fair value of our restricted marketable securities.

The following tables summarize the unrealized gains and losses related to our restricted marketable securities, by major security type, as of June 30, 2026 and December 31, 2025 (in thousands):

						As of June 30, 2026
						Amortized Cost						Unrealized Gains						Unrealized Losses						Fair Value
U.S. debt						$	141,850					$	—					$	27,845					$	114,005
Foreign government obligations						65,549						—						12,228						53,321
Supranational debt						30,013						70						1,971						28,112
U.S. government obligations						24,226						—						5,349						18,877
Total						$	261,638					$	70					$	47,393					$	214,315

						As of December 31, 2025
						Amortized Cost						Unrealized Gains						Unrealized Losses						Fair Value
U.S. debt						$	142,790					$	—					$	27,440					$	115,350
Foreign government obligations						67,091						—						12,935						54,156
Supranational debt						30,123						59						1,906						28,276
U.S. government obligations						24,274						—						4,884						19,390
Total						$	264,278					$	59					$	47,165					$	217,172

As of June 30, 2026, the contractual maturities of these securities were between 5 years and 13 years, and restricted marketable securities with unrealized losses had generally been in a loss position for a period of time greater than 12 months. The unrealized losses were primarily due to increases in interest rates relative to rates at the time of purchase, and, based on the underlying credit quality of the investments, we expect to hold such securities until we recover our cost basis.

4. Consolidated Balance Sheet Details

Accounts receivable trade, net

Accounts receivable trade, net consisted of the following at June 30, 2026 and December 31, 2025 (in thousands):

						June 30, 2026						December 31, 2025
Accounts receivable trade, gross (1)						$	1,490,969					$	1,307,307
Allowance for credit losses						(14,748)						(13,267)
Accounts receivable trade, net						$	1,476,221					$	1,294,040

——————————

(1)See Note 10. “Other Financing Arrangements” to our condensed consolidated financial statements for discussion of our various factoring arrangements.

Inventories

Inventories consisted of the following at June 30, 2026 and December 31, 2025 (in thousands):

						June 30, 2026						December 31, 2025
Raw materials						$	401,956					$	429,675
Work in process						142,884						105,325
Finished goods						728,783						439,196
Inventories						$	1,273,623					$	974,196
Inventories – current						$	1,088,115					$	736,734
Inventories – noncurrent						$	185,508					$	237,462

Other current assets

Other current assets consisted of the following at June 30, 2026 and December 31, 2025 (in thousands):

						June 30, 2026						December 31, 2025
Spare maintenance materials and parts						$	287,489					$	278,767
Prepaid expenses						111,785						99,280
Indirect tax receivables						104,301						124,045
Operating supplies						50,270						57,427
Insurance receivable for accrued litigation (1)						21,800						21,800
Prepaid income taxes						6,925						9,772
Derivative instruments (2)						—						4,001
Other (3)						158,796						48,011
Other current assets						$	741,366					$	643,103

——————————

(1)See Note 11. “Commitments and Contingencies” to our condensed consolidated financial statements for discussion of our legal proceedings.

(2)See Note 6. “Derivative Financial Instruments” to our condensed consolidated financial statements for discussion of our derivative instruments.

(3)In April 2025, the U.S. President imposed a 10% “baseline” reciprocal tariff on nearly all U.S. trading partners, and additional, higher reciprocal tariffs on certain countries pursuant to the International Emergency Economic Powers Act (“IEEPA”). In February 2026, the U.S. Supreme Court ruled the IEEPA tariffs unlawful. Since that ruling, the U.S. Court of International Trade ordered U.S. Customs and Border Protection to commence the process of refunding IEEPA tariffs. During the three months ended June 30, 2026, we submitted eligible refund claims for IEEPA tariffs paid prior to the U.S. Supreme Court ruling and began receiving payment for certain claims. Accordingly, receivables for refund claims that remained outstanding as of June 30, 2026 were included in “Other current assets.”

Property, plant and equipment, net

Property, plant and equipment, net consisted of the following at June 30, 2026 and December 31, 2025 (in thousands):

						June 30, 2026						December 31, 2025
Land						$	39,485					$	39,578
Buildings and improvements						1,934,803						1,929,051
Machinery and equipment						5,773,336						5,746,979
Office equipment and furniture						165,751						162,070
Leasehold improvements						34,044						34,136
Construction in progress						529,055						321,524
Property, plant and equipment, gross						8,476,474						8,233,338
Accumulated depreciation						(2,832,935)						(2,557,544)
Property, plant and equipment, net						$	5,643,539					$	5,675,794

As of June 30, 2026, the recoverability of our property, plant, and equipment was based on certain expectations regarding the ongoing operation of our international manufacturing facilities. However, it is reasonably possible that the operational status of one or more of our international facilities may be adversely affected by geopolitical developments, including trade policies or tariffs, which may result in future decisions to reduce, pause, or cease operations at these facilities. Such decisions may result in certain property, plant, and equipment being sold or otherwise disposed of before the end of their previously estimated useful lives, which, in turn, could result in a decrease in the value, and possible impairment, of this property, plant, and equipment. Accordingly, any such changes to the operational status of our international manufacturing facilities could be material to our condensed consolidated financial statements and have a significant adverse effect on our results of operations.

Depreciation of property, plant and equipment was $143.5 million and $287.3 million for the three and six months ended June 30, 2026, respectively, and $122.1 million and $244.4 million for the three and six months ended June 30, 2025, respectively.

Other assets

Other assets consisted of the following at June 30, 2026 and December 31, 2025 (in thousands):

						June 30, 2026						December 31, 2025
Advance payments for raw materials						$	326,175					$	319,783
Lease assets (1)						196,331						196,058
Income tax receivables						110,067						110,067
Project assets						24,839						25,721
Prepaid expenses						14,385						17,180
Restricted cash equivalents						10,506						6,900
Restricted cash						3,747						3,617
Accounts receivable, trade						—						16,000
Other (2)						71,081						64,343
Other assets						$	757,131					$	759,669

——————————

(1)See Note 7. “Leases” to our condensed consolidated financial statements for discussion of our lease arrangements.

(2)During 2023, we entered into a power purchase agreement with Cleantech Solar (“Cleantech”), a leading provider of renewable energy solutions in India and Southeast Asia, and Cleantech committed to construct certain photovoltaic (“PV”) solar and wind power-generating assets to supply electricity to our manufacturing facility in India.

During 2024, we purchased ownership interests in two subsidiaries of Cleantech. These subsidiaries own certain of the power-generating assets that supply electricity to our facility, and we account for our investments in these subsidiaries using the equity method. As of June 30, 2026, the carrying amount of our investments in these subsidiaries was $6.9 million.

During the three and six months ended June 30, 2026, we purchased $1.4 million and $2.6 million of electricity, respectively, from these subsidiaries. During the three and six months ended June 30, 2025, we purchased $1.0 million and $1.1 million of electricity, respectively, from these subsidiaries.

Accrued expenses

Accrued expenses consisted of the following at June 30, 2026 and December 31, 2025 (in thousands):

						June 30, 2026						December 31, 2025
Accrued property, plant and equipment						$	101,352					$	109,030
Product warranty liability (1)						56,650						59,266
Accrued freight						53,311						51,707
Accrued other taxes						50,206						58,601
Accrued compensation and benefits						44,041						67,023
Accrued inventory						26,552						69,093
Other						78,052						104,694
Accrued expenses						$	410,164					$	519,414

——————————

(1)See Note 11. “Commitments and Contingencies” to our condensed consolidated financial statements for discussion of our product warranties.

Other current liabilities

Other current liabilities consisted of the following at June 30, 2026 and December 31, 2025 (in thousands):

						June 30, 2026						December 31, 2025
Accrued litigation (1)						$	21,800					$	21,800
Lease liabilities (2)						14,370						18,090
Derivative instruments (3)						3,863						2,357
Other						51,686						48,811
Other current liabilities						$	91,719					$	91,058

——————————

(1)See Note 11. “Commitments and Contingencies” to our condensed consolidated financial statements for discussion of our legal proceedings.

(2)See Note 7. “Leases” to our condensed consolidated financial statements for discussion of our lease arrangements.

(3)See Note 6. “Derivative Financial Instruments” to our condensed consolidated financial statements for discussion of our derivative instruments.

Other liabilities

Other liabilities consisted of the following at June 30, 2026 and December 31, 2025 (in thousands):

						June 30, 2026						December 31, 2025
Lease liabilities (1)						$	142,005					$	138,673
Deferred tax liabilities, net						61,934						69,691
Other taxes payable						52,325						51,711
Product warranty liability (2)						20,578						20,142
Other						15,295						15,370
Other liabilities						$	292,137					$	295,587

——————————

(1)See Note 7. “Leases” to our condensed consolidated financial statements for discussion of our lease arrangements.

(2)See Note 11. “Commitments and Contingencies” to our condensed consolidated financial statements for discussion of our product warranties.

5. Government Grants

Government grants represent benefits provided by federal, state, or local governments that are outside the scope of Accounting Standards Codification (“ASC”) 740; we account for such grants under ASC 832. We recognize government grants when it is probable we will comply with the grant’s conditions and the grant will be received. Government grants whose primary condition relates to the purchase, construction, or acquisition of a long-lived asset are accounted for using the cost accumulation approach and are recognized as a reduction to the related asset’s cost basis, which reduces future depreciation expense. Other government grants not related to long-lived assets are considered income-related grants and are recognized as a reduction to the related cost of activities that generated the benefit.

In February 2021, the state government of Tamil Nadu, India granted First Solar certain incentives associated with the construction of our manufacturing facility in the state. Among other things, such incentives provided a 24% subsidy for eligible capital expenditures, contingent upon meeting certain minimum investment and employment commitments. We expect to receive the subsidy in six annual installments, the first of which was received in July 2026. Such incentives are reflected on our condensed consolidated balance sheets within “Government grants

receivable, net” and “Government grants receivable,” depending on the expected timing of cash receipts. There were no amounts recognized during the six months ended June 30, 2026 related to government grants accounted for using the cost accumulation approach.

The following table presents the benefits recognized from income-related government grants in our condensed consolidated statements of operations for the three and six months ended June 30, 2026 and 2025 (in thousands):

						Three Months Ended June 30,												Six Months Ended June 30,
						2026						2025						2026						2025
Cost of sales						$	444,480					$	377,041					$	862,513					$	678,861
Selling, general and administrative						9						15						34						48
Research and development						199						347						348						2,191

In August 2022, the previous U.S. President signed into law the Inflation Reduction Act of 2022 (the “IRA”). Among other things, the IRA offers a tax credit, pursuant to Section 45X of the Internal Revenue Code (the “IRC”), for solar modules and solar module components manufactured in the United States and sold to third parties. Such credit may be refundable by the Internal Revenue Service (the “IRS”) or transferable to a third party and is available from 2023 to 2032, subject to phase down beginning in 2030. For eligible components, the credit is equal to (i) $12 per square meter for a PV wafer, (ii) 4 cents multiplied by the capacity of a PV cell in watts, and (iii) 7 cents multiplied by the capacity of a PV module in watts. Based on the current form factor of our modules, we believe we qualify for a credit of up to approximately 17 cents per watt for each module fully produced in the United States and sold to a third party. We recognize such credit as a reduction to “Cost of sales” in the period the modules are sold to customers. Such credit is also reflected on our condensed consolidated balance sheets within “Government grants receivable, net” and “Government grants receivable,” depending on the expected timing of cash receipts.

In December 2024, we entered into two agreements for the sale of $857.2 million of Section 45X tax credits we generated during 2024 for aggregate cash proceeds of $818.6 million. We received initial cash proceeds of $616.0 million in December 2024 and received the remaining cash proceeds of $202.6 million during the year ended December 31, 2025.

In June 2025 and July 2025, we entered into two agreements for the sale of $701.9 million of Section 45X tax credits we generated during 2025 for aggregate cash proceeds of $668.1 million. We received the full cash proceeds during the year ended December 31, 2025.

In October 2025, we entered into two agreements for the sale of $699.7 million of Section 45X tax credits we generated during 2025 for aggregate cash proceeds of $668.2 million. We received initial cash proceeds of $573.0 million during the year ended December 31, 2025 and received the remaining cash proceeds of $95.2 million during the six months ended June 30, 2026.

During the six months ended June 30, 2026, we received $117.6 million from the U.S. Department of the Treasury related to Section 45X tax credits generated during 2024.

6. Derivative Financial Instruments

As a global company, we are exposed in the normal course of business to various risks, including foreign currency and commodity price risks, that could affect our financial position, results of operations, and cash flows. We may use derivative instruments to hedge against these risks and do not hold such instruments for speculative or trading purposes.

Depending on the terms of the specific derivative instruments and market conditions, some of our derivative instruments may be assets and others liabilities at any particular balance sheet date. We report all of our derivative instruments at fair value and account for changes in the fair value of derivative instruments within “Accumulated other comprehensive loss” if the derivative instruments qualify for hedge accounting. For those derivative instruments that do not qualify for hedge accounting (i.e., “economic hedges”), we record the changes in fair value directly to earnings. See Note 8. “Fair Value Measurements” to our condensed consolidated financial statements for information about the techniques we use to measure the fair value of our derivative instruments.

The following tables present the fair values of derivative instruments included in our condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025 (in thousands):

						June 30, 2026
						Other Current Assets												Other Current Liabilities
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts						$	—											$	3,863
Total derivative instruments						$	—											$	3,863

						December 31, 2025
						Other Current Assets												Other Current Liabilities
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts						$	4,001											$	2,357
Total derivative instruments						$	4,001											$	2,357

The following table presents the pretax amounts related to derivative instruments designated as cash flow hedges affecting accumulated other comprehensive loss and our condensed consolidated statements of operations for the six months ended June 30, 2025 (in thousands):

												Commodity Swap Contracts
Balance as of December 31, 2024												$	(366)
Amount reclassified to cost of sales												366
Balance as of June 30, 2025												$	—

The following table presents the effect of derivative instruments not designated as hedges on our condensed consolidated statements of operations for the three and six months ended June 30, 2026 and 2025 (in thousands):

												Amount of Gain (Loss) Recognized in Income Statement
												Three Months Ended June 30,												Six Months Ended June 30,
						Income Statement Line Item						2026						2025						2026						2025
Foreign exchange forward contracts						Foreign currency loss, net						$	(8,388)					$	8,061					$	12,728					$	4,578

Foreign Currency Risk

Many of our subsidiaries have assets and liabilities (primarily receivables, deferred taxes, payables, accrued expenses, debt, and solar module collection and recycling liabilities) that are denominated in currencies other than the subsidiaries’ functional currencies. Changes in the exchange rates between the functional currencies of our subsidiaries and the other currencies in which these assets and liabilities are denominated will create fluctuations in our reported condensed consolidated statements of operations. We may enter into foreign exchange forward contracts or other financial instruments to economically hedge assets and liabilities against the effects of currency exchange rate fluctuations. The gains and losses on such foreign exchange forward contracts will economically offset all or part of the transaction gains and losses that we recognize in earnings on the related foreign currency denominated assets and liabilities.

We also enter into foreign exchange forward contracts to economically hedge balance sheet and other exposures related to transactions between certain of our subsidiaries and transactions with third parties. Such contracts are considered economic hedges and do not qualify for hedge accounting. Accordingly, we recognize gains or losses from the fluctuations in foreign exchange rates and the fair value of these derivative contracts in “Foreign currency loss, net” on our condensed consolidated statements of operations.

As of June 30, 2026 and December 31, 2025, the U.S. dollar equivalent notional values of our foreign exchange forward contracts that do not qualify for hedge accounting were $147.8 million and $446.0 million, respectively, including contracts in Indian rupee, Euro, and Malaysian ringgit, among other currencies.

Commodity Price Risk

From time to time, we have used commodity swap contracts to mitigate our exposure to commodity price fluctuations for certain raw materials used in the production of our modules. During the year ended December 31, 2024, we entered into various commodity swap contracts to hedge a portion of our forecasted cash flows for purchases of steel between April 2024 and December 2024. Such swaps had an aggregate initial notional value based on short tons of forecasted steel purchases, equivalent to $7.6 million, and entitled us to receive the price based on the U.S. Midwest Hot-Rolled Coil Steel Index while requiring us to pay certain fixed prices. The notional amount of the commodity swap contracts proportionately adjusted with forecasted purchases of steel.

These commodity swap contracts qualified for accounting as cash flow hedges in accordance with ASC 815, and we designated them as such. We reported unrealized gains or losses on such contracts in “Accumulated other comprehensive loss” and subsequently reclassified applicable amounts into earnings when the hedged transactions occurred and impacted earnings. As of June 30, 2026 and December 31, 2025, we had no outstanding cash flow hedges.

7. Leases

Our lease arrangements include our corporate and administrative offices, certain warehouses, certain land for our manufacturing facilities, and certain of our manufacturing equipment. Such leases primarily relate to assets located in the United States, Malaysia, India, and Vietnam.

The following table presents certain quantitative information related to our lease arrangements for the three and six months ended June 30, 2026 and 2025, and as of June 30, 2026 and December 31, 2025 (in thousands):

						Three Months Ended June 30,												Six Months Ended June 30,
						2026						2025						2026						2025
Finance lease cost:
Amortization of right-of-use assets						$	503					$	403					$	1,177					$	801
Interest on lease liabilities						604						536						1,262						1,068
Operating lease cost						5,629						4,198						10,833						8,313
Variable lease cost						1,062						822						2,218						1,717
Short-term lease cost						330						161						848						435
Total lease cost						$	8,128					$	6,120					$	16,338					$	12,334
Cash paid for amounts included in the measurement of:
Operating lease liabilities																		$	11,990					$	7,830
Finance lease liabilities																		1,841						933
Lease assets obtained in exchange for:
Operating lease liabilities																		$	9,834					$	1,663
Finance lease liabilities																		313						34

						June 30, 2026												December 31, 2025
						Operating Leases						Finance Leases						Operating Leases						Finance Leases
Lease assets						$	163,518					$	32,813					$	161,756					$	34,302
Lease liabilities – current						11,405						2,965						15,183						2,907
Lease liabilities – noncurrent						108,104						33,901						103,753						34,920
Weighted-average remaining lease term						12 years						24 years						12 years						24 years
Weighted-average discount rate						5.3		%				6.5		%				5.7		%				6.6		%

As of June 30, 2026, the future payments associated with our lease liabilities were as follows (in thousands):

						Operating Leases						Finance Leases
Remainder of 2026						$	9,061					$	1,841
2027						15,448						3,724
2028						15,021						3,788
2029						13,312						3,877
2030						11,700						3,924
2031						11,356						3,962
Thereafter						86,651						51,800
Total future payments						162,549						72,916
Less: interest						(43,040)						(36,050)
Total lease liabilities						$	119,509					$	36,866

8. Fair Value Measurements

The following is a description of the valuation techniques that we use to measure the fair value of assets and liabilities that we measure and report at fair value on a recurring basis:

*•*Cash Equivalents and Restricted Cash Equivalents. At June 30, 2026 and December 31, 2025, our cash equivalents and restricted cash equivalents consisted of money market funds. We value our cash equivalents and restricted cash equivalents using observable inputs that reflect quoted prices for securities with identical characteristics and classify the valuation techniques that use these inputs as Level 1.

*•*Marketable Securities and Restricted Marketable Securities. At June 30, 2026 and December 31, 2025, our marketable securities consisted of time deposits and U.S. debt, and our restricted marketable securities consisted of U.S. debt, foreign and U.S. government obligations, and supranational debt. We value our marketable securities and restricted marketable securities using observable inputs that reflect quoted prices for securities with identical characteristics or quoted prices for securities with similar characteristics and other observable inputs (such as interest rates that are observable at commonly quoted intervals). Accordingly, we classify the valuation techniques that use these inputs as either Level 1 or Level 2 depending on the inputs used. We also consider the effect of our counterparties’ credit standing in these fair value measurements.

*•*Derivative Assets and Liabilities. At June 30, 2026 and December 31, 2025, our derivative assets and liabilities consisted of foreign exchange forward contracts involving major currencies. Since our derivative assets and liabilities are not traded on an exchange, we value them using standard industry valuation models. As applicable, these models project future cash flows and discount the amounts to a present value using market-based observable inputs, including credit risk, foreign exchange rates, and forward and spot prices for currencies. These inputs are observable in active markets over the contract term of the derivative instruments we hold, and accordingly, we classify the valuation techniques as Level 2. In evaluating credit risk, we consider the effect of our counterparties’ and our own credit standing in the fair value measurements of our derivative assets and liabilities, respectively.

At June 30, 2026 and December 31, 2025, the fair value measurements of our assets and liabilities measured on a recurring basis were as follows (in thousands):

												Fair Value Measurements at Reporting Date Using
						June 30, 2026						Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents:
Money market funds						$	46,895					$	46,895					$	—					$	—
Restricted cash equivalents:
Money market funds						10,506						10,506						—						—
Marketable securities:
Time deposits						38,685						38,685						—						—
Restricted marketable securities						214,315						—						214,315						—
Total assets						$	310,401					$	96,086					$	214,315					$	—
Liabilities:
Derivative liabilities						$	3,863					$	—					$	3,863					$	—
Total liabilities						$	3,863					$	—					$	3,863					$	—

												Fair Value Measurements at Reporting Date Using
						December 31, 2025						Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents:
Money market funds						$	197,195					$	197,195					$	—					$	—
Restricted cash equivalents:
Money market funds						6,900						6,900						—						—
Marketable securities:
Time deposits						42,562						42,562						—						—
U.S. debt						9,287						—						9,287						—
Restricted marketable securities						217,172						—						217,172						—
Derivative assets						4,001						—						4,001						—
Total assets						$	477,117					$	246,657					$	230,460					$	—
Liabilities:
Derivative liabilities						$	2,357					$	—					$	2,357					$	—
Total liabilities						$	2,357					$	—					$	2,357					$	—

Fair Value of Financial Instruments

At June 30, 2026 and December 31, 2025, the carrying values and fair values of our financial instruments not measured at fair value were as follows (in thousands):

						June 30, 2026												December 31, 2025
						Carrying Value						Fair Value						Carrying Value						Fair Value
Assets:
Government grants receivable – noncurrent						$	978,788					$	953,387					$	125,607					$	104,391
Liabilities:
Long-term debt, including current maturities (1)						$	—					$	—					$	373,651					$	382,318

——————————

(1)Excludes unamortized issuance costs and debt arrangements with an original maturity of less than one year.

The carrying values in our condensed consolidated balance sheets of our trade accounts receivable, restricted cash, current government grants receivable, accounts payable, accrued expenses, and debt arrangements with an original maturity of less than one year approximated their fair values due to their nature and relatively short maturities; therefore, we excluded them from the foregoing table. The fair value measurements for our noncurrent government grants receivable and long-term debt are considered Level 2 measurements under the fair value hierarchy.

Credit Risk

We have certain financial instruments that subject us to credit risk. These consist primarily of cash, cash equivalents, marketable securities, accounts receivable, restricted cash, restricted cash equivalents, restricted marketable securities, and foreign exchange forward contracts. We are exposed to credit losses in the event of nonperformance by the counterparties to our financial instruments. We place these instruments with various high-quality financial institutions and limit the amount of credit risk from any one counterparty and we monitor the credit standing of these counterparty financial institutions. Our net sales are primarily concentrated among a limited number of customers. We monitor the financial condition of our customers and perform credit evaluations whenever considered necessary.

We typically require some form of payment security from our customers, including, but not limited to, advance payments, parent guarantees, letters of credit, bank guarantees, or surety bonds.

9. Debt

Our debt arrangements consisted of the following at June 30, 2026 and December 31, 2025 (in thousands):

												Balance (USD)
Loan Agreement						Currency						June 30, 2026						December 31, 2025
Credit Facility						USD						$	—					$	—
India Credit Facility						USD						—						373,651
India JPM Working Capital Facility						INR						19,612						26,140
India Citibank Working Capital Facility						INR						12,722						11,123
India Credit Agricole Working Capital Facility						INR						5,301						41,157
India HSBC Working Capital Facility						INR						—						46,719
Total debt principal												37,635						498,790
Less: unamortized issuance costs												—						(218)
Total debt												37,635						498,572
Less: current portion												(37,635)						(215,979)
Noncurrent portion												$	—					$	282,593

Credit Facility

In June 2023, we entered into a credit agreement with several financial institutions as lenders and JPMorgan Chase Bank, N.A. as administrative agent, which provided us with a senior secured credit facility (the “Revolving Credit Facility”) with an aggregate borrowing capacity of $1.0 billion. In February 2026, we entered into a new credit agreement with several financial institutions as lenders and JPMorgan Chase Bank, N.A. as administrative agent and terminated the prior Revolving Credit Facility. This new agreement provides us with a senior unsecured five-year revolving credit facility (the “Credit Facility”) with an aggregate borrowing capacity of $1.5 billion and a sub-limit of $450 million, $150 million of which is currently committed and available for the issuance of letters of credit. Borrowings under the Credit Facility bear interest at a rate per annum equal to, at our option, (i) the Term Secured Overnight Financing Rate (“Term SOFR”), plus a margin that ranges between 1.00% to 1.75% or (ii) an alternate base rate as defined in the credit agreement, plus a margin that ranges from 0.00% to 0.75%. The margins are based on our net leverage ratio or, if we elect to switch to a credit ratings-based system after the investment grade ratings trigger date occurs (as defined in the credit agreement), on our public debt rating.

In addition to paying interest on outstanding principal under the Credit Facility, we are required to pay an unused commitment fee that ranges from 0.100% to 0.225% per annum based on the same factors discussed above and the daily unused commitments under the facility. We are also required to pay (i) a letter of credit fee based on the applicable margin for Term SOFR, (ii) letter of credit fronting fees as agreed by us and such issuing lender, and (iii) other customary letter of credit fees.

India Credit Facility

In July 2022, FS India Solar Ventures Private Limited (“FSISV”), our indirect wholly-owned subsidiary, entered into a finance agreement (the “India Credit Facility”) with the U.S. International Development Finance Corporation for aggregate borrowing of up to $500.0 million for the development and construction of a solar module manufacturing facility in India. Principal on the India Credit Facility was payable in scheduled semi-annual installments beginning in August 2024. In May 2026, we fully repaid the outstanding principal and interest balances and closed the India Credit Facility. There was no significant gain or loss on extinguishment.

India Credit Agricole Working Capital Facility

In August 2022, FSISV entered into a working capital facility agreement (the “India Credit Agricole Working Capital Facility”) with Credit Agricole Corporate and Investment Bank, for the issuance of letters of credit, bank guarantees, and overdrafts. In 2024, the India Credit Agricole Working Capital Facility was amended to include certain working capital loans, and during 2025, the facility limit was increased to INR 8.5 billion ($90.1 million). The outstanding balance matures in the third quarter of 2026. The India Credit Agricole Working Capital Facility is guaranteed by First Solar, Inc.

India JPM Working Capital Facility

In December 2022, FSISV entered into a working capital facility agreement (the “India JPM Working Capital Facility”) with JPMorgan Chase Bank, N.A. for the issuance of bank guarantees, bonds, and other similar forms of security. In 2023, the India JPM Working Capital Facility was amended to include certain working capital loans of up to INR 6.2 billion ($66.0 million). The outstanding balance matures in the third and fourth quarters of 2026. The India JPM Working Capital Facility is guaranteed by First Solar, Inc.

India HSBC Working Capital Facility

In February 2024, FSISV entered into a working capital facility agreement (the “India HSBC Working Capital Facility”) with the Hongkong and Shanghai Banking Corporation Limited, which provides certain working capital loans of up to INR 8.2 billion ($86.9 million). The India HSBC Working Capital Facility is guaranteed by First Solar, Inc.

India Citibank Working Capital Facility

In August 2024, FSISV entered into a working capital facility agreement (the “India Citibank Working Capital Facility”) with Citibank, N.A. In January 2025, the India Citibank Working Capital Facility was amended to provide certain working capital loans of up to INR 6.4 billion ($67.8 million). The outstanding balance matures in the third quarter of 2026. The India Citibank Working Capital Facility is guaranteed by First Solar, Inc.

10. Other Financing Arrangements

Non-Recourse Factoring

We have entered into various revolving factoring arrangements to sell certain trade receivables to unrelated financial institutions. Transfers under these arrangements, which retain servicing but are without recourse, qualify as true sales under ASC 860.

During the year ended December 31, 2025, we factored $245.7 million under these arrangements and recorded $5.3 million of discounts on factored receivables in “Selling, general and administrative” expense. We also repurchased $27.0 million of previously transferred assets under these arrangements during the year ended December 31, 2025. The trade receivables sold that remained outstanding as of December 31, 2025 were $99.8 million. Proceeds from the sale of such receivables were classified as operating cash flows, whereas amounts paid to repurchase previously transferred receivables were classified as investing cash flows.

During the six months ended June 30, 2026, we did not sell any trade receivables under these arrangements. There were no trade receivables sold that remained outstanding as of June 30, 2026.

Secured Borrowings

During the year ended December 31, 2025, we transferred $492.8 million of trade receivables to a financial institution under a factoring arrangement with recourse, while retaining servicing responsibilities. We did not transfer any trade receivables under this factoring arrangement during the six months ended June 30, 2026. Transfers under this arrangement do not meet the criteria for a sale of receivables and are therefore accounted for as secured borrowings.

We record discounts on receivables factored with recourse as interest expense over the term of the respective receivables. Accordingly, during the year ended December 31, 2025, we recorded $6.5 million of interest expense associated with this arrangement. As of June 30, 2026 and December 31, 2025, there were no outstanding liabilities related to this arrangement.

Supplier Finance Program

We participate in a supplier finance program administered by a third-party financial institution. Under this program, suppliers that choose to participate have the option to receive early payment from the financial institution for invoices that we have confirmed as valid. Our contractual payment terms with suppliers are not impacted by their participation in this program. If the supplier participates, we pay the financial institution the full invoice amount on the original due date. We do not pledge assets or provide guarantees under this program. As of June 30, 2026 and December 31, 2025, our payment obligations outstanding under the supplier finance program were $8.4 million and $9.0 million, respectively, which were recorded within “Accounts payable” in our condensed consolidated balance sheets.

11. Commitments and Contingencies

Commercial Commitments

During the normal course of business, we enter into commercial commitments in the form of letters of credit and surety bonds to provide financial and performance assurance to third parties. As of June 30, 2026, the issued and outstanding amounts and available capacities under these commitments were as follows (in millions):

						Issued and Outstanding						Available Capacity
Credit Facility (1)						$	1.4					$	148.6
Bilateral facilities (2)						222.0						190.7
Surety bonds						140.8						144.3

——————————

(1)Our Credit Facility provides us with a committed sub-limit of $150.0 million to issue letters of credit, at a fee based on the applicable margin for Term SOFR loans, a fronting fee, and other customary letter of credit fees.

(2)Of the total letters of credit issued under the bilateral facilities, $1.6 million was secured with cash.

Product Warranties

When we recognize revenue for sales of modules, we accrue liabilities for the estimated future costs of meeting our limited warranty obligations. We estimate our limited product warranty liability for power output and defects in materials and workmanship under normal use and service conditions based on return rates for each series of module technology and other factors. We make and revise these estimates based primarily on the number of solar modules under warranty installed at customer locations, our historical experience with and projections of warranty claims, and our estimated per-module replacement costs. We also monitor our expected future module performance through certain quality and reliability testing and actual performance in certain field installation sites. From time to time, we have taken remediation actions with respect to affected modules beyond our limited warranties and may elect to do so in the future, in which case we would incur additional costs. Such potential voluntary future remediation actions beyond our limited warranty obligations may be material to our condensed consolidated statements of operations if we commit to any such remediation actions.

Product warranty activities during the three and six months ended June 30, 2026 and 2025 were as follows (in thousands):

						Three Months Ended June 30,												Six Months Ended June 30,
						2026						2025						2026						2025
Product warranty liability, beginning of period						$	77,430					$	75,566					$	79,408					$	76,435
Accruals for new warranties issued						5,015						3,323						9,477						5,979
Settlements						(9,506)						(3,061)						(14,575)						(6,572)
Changes in estimate of product warranty liability						4,289						—						2,918						(14)
Product warranty liability, end of period						$	77,228					$	75,828					$	77,228					$	75,828
Current portion of warranty liability						$	56,650					$	60,165					$	56,650					$	60,165
Noncurrent portion of warranty liability						$	20,578					$	15,663					$	20,578					$	15,663

During the year ended December 31, 2024, we identified manufacturing issues affecting certain Series 7 modules manufactured in 2023 and 2024 that may cause the modules to experience premature power loss once installed in the field. Subsequently, we identified the causes of these issues and compiled and evaluated data on the expected impact such issues may have on performance, including collecting samples of module performance data from several locations. We have settled certain of our obligations related to these issues and have continued to engage in settlement discussions with various additional customers. Based on such settlement experience, the estimated number of affected modules, and projections of probable costs to remediate the issues, we believe a reasonable estimate of potential future losses will range from approximately $40 million to $65 million. Within that range, we recorded a specific warranty liability of $47 million as of June 30, 2026, which represents our best estimate of expected future losses related to the identified manufacturing issues. The ultimate loss we will incur will depend on the extent of the premature power loss that is experienced in relation to the obligations under our limited product warranties, as well as any potential additional commitments we may make to remediate the affected modules. As additional information becomes available to us, our estimate of the aggregate losses related to these manufacturing issues may change, and any change in estimate may also result in a change to our product warranty liability.

Indemnifications

In certain limited circumstances, we have provided indemnifications to customers or other parties under which we are contractually obligated to compensate such parties for losses they suffer resulting from a breach of a representation, warranty, or covenant; the resolution of specific matters associated with a solar project’s development or construction; guarantees of a third party’s payment or performance obligations; or any disallowance or lack of the right to claim all or any portion of certain tax credits. For contracts that have such indemnification provisions, we initially recognize a liability under ASC 460 for the estimated premium that would be required by a guarantor to issue the same indemnity in a standalone arm’s-length transaction with an unrelated party. We may base these estimates on the cost of insurance or other instruments that cover the underlying risks being indemnified and may purchase such instruments to mitigate our exposure to potential indemnification payments. We subsequently measure such liabilities at the greater of the initially estimated premium or the contingent liability required to be recognized under ASC 450. We recognize any indemnification liabilities as a reduction of earnings associated with the related transaction.

After an indemnification liability is recorded, we derecognize such amount pursuant to ASC 460 depending on the nature of the indemnity, which derecognition typically occurs upon expiration or settlement of the arrangement, and any contingent aspects of the indemnity are accounted for in accordance with ASC 450. As of June 30, 2026 and December 31, 2025, we had no accrued indemnification liabilities. Our potential future payments under these indemnifications primarily relate to legislative changes that may adversely affect an entity’s ability to benefit from previously transferred Section 45X tax credits.

Solar Module Collection and Recycling Liability

We previously established a module collection and recycling program, which has since been discontinued, to collect and recycle modules sold and covered under such program once the modules reach the end of their service lives. For legacy customer sales contracts that are covered under this program, we agreed to pay the costs for the collection and recycling of qualifying solar modules, and the end-users agreed to notify us, disassemble their solar power systems, package the solar modules for shipment, and revert ownership rights over the modules back to us at the end of the modules’ service lives. Accordingly, we recorded any collection and recycling obligations within “Cost of sales” at the time of sale based on the estimated cost to collect and recycle the covered solar modules.

We estimate the cost of our collection and recycling obligations based on the present value of the expected future cost of collecting and recycling the solar modules, which includes estimates for the cost of packaging materials; the cost of freight from the solar module installation sites to a recycling center; material, labor, and capital costs; and by-product credits for certain materials recovered during the recycling process. We base these estimates on our experience collecting and recycling solar modules and on certain assumptions regarding costs at the time the solar modules will be collected and recycled. In the periods between the time of sale and the related settlement of the collection and recycling obligation, we accrete the carrying amount of the associated liability and classify the corresponding expense within “Selling, general and administrative” expense on our condensed consolidated statements of operations.

Our module collection and recycling liability was $144.8 million and $146.0 million as of June 30, 2026 and December 31, 2025, respectively. See Note 3. “Restricted Marketable Securities” to our condensed consolidated financial statements for more information about our arrangements for funding this liability.

Legal Proceedings

During the year ended December 31, 2022, we received several indemnification demands from certain customers, for whom we provided engineering, procurement, and construction services, regarding claims that such customers’ PV tracker systems infringe, in part, on patents owned by Rovshan Sade, the owner of a company called Trabant Solar, Inc. In January 2023, we were notified by two of our customers that the plaintiff served them with patent infringement complaints, and we have assumed the defense of these claims. We have conducted due diligence on the patents and claims and believe that we will prevail in the actions. After a series of stays of the proceedings, the last of which was lifted on July 14, 2025, the parties have begun responding to their respective discovery demands. Each party has submitted its claim construction filings with the court, and a claim construction hearing took place on February 20, 2026. The court has stayed discovery in the actions until it decides the parties’ claim-construction issues. On June 19, 2026, East Pecos Solar was served with a complaint filed by the plaintiff in the Western District of Texas. The complaint alleges the same causes of action as those in the current infringement actions. Southern Power, East Pecos Solar’s parent company, tendered the defense to First Solar pursuant to an indemnification obligation set forth in the Engineering, Procurement and Construction Agreement by and between East Pecos Solar, LLC and First Solar Electric, LLC dated as of March 4, 2016. The answer is due on August 24, 2026. At this time, we are not in a position to assess the likelihood of any potential loss or adverse effect on our financial condition or to estimate the amount or range of possible loss, if any, from these actions.

In April 2019, a subcontractor of First Solar sustained certain injuries while performing work at a former project site and, in May 2019, commenced legal action against a subsidiary of First Solar. In June 2023, a jury awarded damages of approximately $51.3 million to the plaintiff. On September 21, 2023, the Superior Court of California for Monterey County ruled, in response to our motion for remittitur, that the damages awarded to the plaintiff were excessive and reduced the award from $51.3 million to $21.8 million. We and the plaintiff have appealed and cross appealed varying aspects of the verdict and the remittitur. Accordingly, due to the uncertainty surrounding the multiple decisions and appeals, as of June 30, 2026, we recorded a $21.8 million accrued litigation payable included in “Other current liabilities” in our condensed consolidated balance sheet. We believe the full amount of awarded damages will be covered by our various insurance policies. Accordingly, we also recorded a $21.8 million receivable included in “Other current assets” in our condensed consolidated balance sheet as of June 30, 2026. The plaintiff did not accept the reduced award by the court ordered deadline of October 10, 2023. As a result, the $21.8 million award has been vacated, and a new trial is expected to be scheduled. We, in conjunction with our insurance carriers, are challenging the initial verdict in an appellate court, and the plaintiff is cross appealing from the decision to reduce the award, among other issues, stemming from the trial. We filed our initial briefs with the court on December 20, 2024. The plaintiff submitted its briefs on April 23, 2025. The appeal was fully briefed on November 25, 2025. There is no deadline by which the appellate court must issue a ruling. There is no timetable for an appellate decision.

A securities class action lawsuit was commenced in the United States District Court for the Eastern District of New York on June 23, 2026, by Claire Day, a purchaser of First Solar common stock, against First Solar and certain executive officers of First Solar, individually and on behalf of all persons and entities that purchased or otherwise acquired First Solar securities between February 26, 2025 and February 24, 2026, seeking to recover damages. The plaintiff alleges that we made materially false and misleading statements regarding our business, operations, and compliance policies and failed to disclose material information regarding our capacity to manage the impact of U.S. tariff policy on our business, and understated the extent to which our responses to U.S. tariff policy were likely to negatively impact projected performance in 2026. The plaintiff alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and U.S. Securities and Exchange Commission (“SEC”) Rule 10b-5 promulgated thereunder. We dispute the allegations and intend to defend the action vigorously. At this time, we are not in a position to assess the likelihood of any potential loss or adverse effect on our financial condition or to estimate the amount or range of possible loss, if any, from these actions. On July 28, 2026, based on allegations substantially similar to the above-described securities class action, a shareholder derivative lawsuit was commenced in the United States District Court for the Eastern District of New York by Manh Ho, a purchaser of First Solar common stock, against certain directors and executive officers of First Solar, on behalf of First Solar, seeking to recover damages and equitable relief. The derivative complaint asserts claims for violations of the federal securities laws, breach of fiduciary duty, unjust enrichment, gross mismanagement, and waste of corporate assets.

We are party to other legal matters and claims in the normal course of our operations. While we believe the ultimate outcome of these matters and claims will not have a material adverse effect on our financial position, results of operations, or cash flows, the outcome of such matters and claims is not determinable with certainty, and negative outcomes may adversely affect us.

12. Revenue from Contracts with Customers

We recognize revenue for module sales at a point in time following the transfer of control of the modules to the customer, which typically occurs upon delivery of the modules to the location specified in the terms of the underlying contract. Our customer contracts generally contain provisions that (i) require us to pay the customer liquidated damages if we fail to deliver modules by scheduled dates or if we fail to deliver modules that meet certain U.S. domestic content requirements and (ii) entitle us to a termination payment if the customer defaults on its contractual obligations and the contract is terminated. For sales of modules imported into the United States, our customer contracts generally include provisions that are intended to mitigate the adverse impact from changes in trade policy, such as tariffs. If a contract is terminated on the basis of these trade policy provisions, such contract would effectively be canceled without liability to either party, resulting in a corresponding reduction in future sales of solar modules related to such contract and the return of any customer deposit under the contract, if applicable.

The following table reflects the changes in our contract liabilities, which we classify as “Deferred revenue,” for the six months ended June 30, 2026 (in thousands):

						June 30, 2026						December 31, 2025						Six Month Change
Deferred revenue						$	1,698,860					$	1,819,404					$	(120,544)					(7)		%

During the six months ended June 30, 2026, our contract liabilities decreased by $120.5 million primarily due to (i) the recognition of revenue for sales of solar modules for which payment was received in prior years, partially offset by (ii) advance payments received or accrued in the current period for future sales of solar modules. During the six months ended June 30, 2026 and 2025, we recognized revenue of $365.4 million and $236.1 million, respectively, that was included in the corresponding contract liability balance at the beginning of the periods.

As of June 30, 2026, we had entered into contracts with customers for the future sale of 45.1 GW of solar modules for an aggregate transaction price of $13.6 billion, which we expect to recognize as revenue through 2030 as we transfer control of the modules to the customers. This volume and transaction price exclude contracts with customers in India for which payment has not been fully secured. This transaction price also excludes estimates of variable consideration associated with (i) future module technology improvements, including enhancements to certain energy related attributes; (ii) sales freight in excess of defined thresholds; (iii) changes to certain commodity prices; (iv) the module wattage committed for delivery; (v) the volume of modules sold that meet certain U.S. domestic content requirements; and (vi) changes to certain tariff structures within a defined threshold, among other things. As a result, the revenue recognized from such contracts may increase or decrease in future periods relative to the original transaction price or may otherwise be impacted if a contract is terminated. These contracts may also be subject to amendments as agreed to by the parties to the contract. These amendments may increase or decrease the volume of modules to be sold under the contract, change delivery schedules, or otherwise adjust the expected revenue under these contracts.

13. Share-Based Compensation

The following table presents share-based compensation expense recognized in our condensed consolidated statements of operations for the three and six months ended June 30, 2026 and 2025 (in thousands):

						Three Months Ended June 30,												Six Months Ended June 30,
						2026						2025						2026						2025
Cost of sales						$	717					$	962					$	1,449					$	1,306
Selling, general and administrative						5,294						4,815						10,049						6,700
Research and development						1,034						1,032						2,328						1,387
Production start-up						—						1						—						1
Total share-based compensation expense						$	7,045					$	6,810					$	13,826					$	9,394

As of June 30, 2026, we had $40.5 million of unrecognized share-based compensation expense related to unvested restricted stock and performance units, which we expect to recognize over a weighted-average period of approximately 1.6 years.

In March 2022 and March 2023, the compensation committee of our board of directors approved grants of performance units for key executive officers to be earned over multi-year performance periods, which ended in December 2024 and December 2025, respectively. Vesting of the 2022 and 2023 grants of performance units was contingent upon the specific attainment targets of each grant, which targets included metrics such as contracted revenue, return on capital, cost per watt, production, and operating income metrics. In February 2025, the compensation committee certified the achievement of the vesting conditions applicable to the 2022 grants, which approximated the maximum level of performance. In February 2026, the compensation committee certified the achievement of the vesting conditions applicable to the 2023 grants, which approximated the target level of performance. Accordingly, each participant received one share of common stock for each vested performance unit granted, net of any tax withholdings.

In March 2024, May 2025, and May 2026, the compensation committee granted additional performance units for key executive officers; such grants are expected to be earned over multi-year performance periods ending in December 2026, December 2027, and December 2028, respectively. Vesting of the 2024, 2025, and 2026 grants of performance units is contingent upon the specific attainment targets of each grant, which targets include metrics such as contracted revenue, production, incremental average selling price, operating margin, adjusted gross margin, and technology development and performance.

Vesting of performance units is also contingent upon the employment of program participants through the applicable vesting dates, with limited exceptions in case of death, disability, a qualifying retirement, or a change-in-control of First Solar. Outstanding performance units are included in the computation of diluted net income per share based on the number of shares that would be issuable if the end of the reporting period were the end of the contingency period.

14. Income Taxes

In July 2025, the U.S. President signed the budget reconciliation legislation (House of Representatives 1, or “H.R.1”) into law, commonly referred to as the “One Big Beautiful Bill.” H.R.1 includes significant provisions, such as (i) the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, (ii) modifications to the international tax framework, and (iii) the restoration of favorable tax treatment for certain business provisions. H.R.1 has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The enactment of H.R.1 did not result in a material impact on our condensed consolidated financial statements.

In August 2022, the previous U.S. President signed into law the IRA, which revised U.S. tax law by, among other things, including a new corporate alternative minimum tax of 15% on certain large corporations, imposing a 1% excise tax on stock buybacks, and providing various incentives, including the introduction of the advanced manufacturing production credit under Section 45X of the IRC. The provisions of the IRA are generally effective for tax years beginning after 2022.

In December 2021, the OECD released model rules for a new global minimum tax framework (“Pillar Two”). Certain governments in countries in which we operate have enacted local Pillar Two legislation, which includes qualified domestic minimum top‑up tax and undertaxed profits rules.

Our effective tax rate was 5.5% and 3.1% for the six months ended June 30, 2026 and 2025, respectively. The increase in our effective tax rate was primarily driven by global minimum tax expense under Pillar Two, partially offset by higher advanced manufacturing production credits. Our provision for income taxes differed from the amount computed by applying the U.S. statutory federal income tax rate of 21% primarily due to the effect of tax law associated with the IRA, partially offset by global minimum tax expense.

Our Malaysian subsidiary has been granted a long-term tax holiday that expires in 2027. The tax holiday, which generally provides for a full exemption from Malaysian income tax, is conditional upon our continued compliance with certain employment and investment thresholds. We are currently in compliance with such thresholds.

Our Vietnamese subsidiary has been granted a long-term tax incentive that generally provides a full exemption from Vietnamese income tax through 2023, followed by reduced tax rates of 5% through 2032 and 10% through 2036. Such long-term tax incentive is conditional upon our continued compliance with certain revenue and research and development (“R&D”) spending thresholds. We are currently in compliance with such thresholds.

We are subject to audit by federal, state, local, and foreign tax authorities. We are currently under examination in the United States for various matters, including transfer pricing policies, and are also under examination in India and Chile, along with the States of North Carolina, Tennessee, and Texas. We believe our tax positions are supported by applicable laws and relevant facts and circumstances, and that adequate provisions have been made for any adjustments that may result from these examinations. However, the outcome of tax examinations cannot be predicted with certainty, and the ultimate resolution of these matters could differ materially from our current estimates. If any issues addressed by our tax examinations are not resolved in a manner consistent with our expectations, we could be required to adjust our provision for income taxes in the period such resolution occurs.

15. Net Income per Share

The calculation of basic and diluted net income per share for the three and six months ended June 30, 2026 and 2025 was as follows (in thousands, except per share amounts):

						Three Months Ended June 30,												Six Months Ended June 30,
						2026						2025						2026						2025
Basic net income per share
Numerator:
Net income						$	422,569					$	341,868					$	769,188					$	551,403
Denominator:
Weighted-average common shares outstanding						107,462						107,245						107,409						107,184
Diluted net income per share
Denominator:
Weighted-average common shares outstanding						107,462						107,245						107,409						107,184
Effect of restricted stock and performance units						270						273						268						284
Weighted-average shares used in computing diluted net income per share						107,732						107,518						107,677						107,468
Net income per share:
Basic						$	3.93					$	3.19					$	7.16					$	5.14
Diluted						$	3.92					$	3.18					$	7.14					$	5.13

The following table summarizes the potential shares of common stock that were excluded from the computation of diluted net income per share for the three and six months ended June 30, 2026 and 2025 as such shares would have had an anti-dilutive effect (in thousands):

						Three Months Ended June 30,												Six Months Ended June 30,
						2026						2025						2026						2025
Anti-dilutive shares						—						1						—						1

16. Accumulated Other Comprehensive Loss

The following table presents the changes in accumulated other comprehensive loss, net of tax, for the six months ended June 30, 2026 (in thousands):

						Foreign Currency Translation Adjustment						Unrealized Loss on Marketable Securities and Restricted Marketable Securities												Total
Balance as of December 31, 2025						$	(109,560)					$	(45,906)											$	(155,466)
Other comprehensive loss before reclassifications						(104)						(242)												(346)
Amounts reclassified from accumulated other comprehensive loss						(1,023)						738												(285)
Net tax effect						—						(36)												(36)
Net other comprehensive (loss) income						(1,127)						460												(667)
Balance as of June 30, 2026						$	(110,687)					$	(45,446)											$	(156,133)

The following table presents the pretax amounts reclassified from accumulated other comprehensive loss into our condensed consolidated statements of operations for the three and six months ended June 30, 2026 and 2025 (in thousands):

Comprehensive Income Components						Income Statement Line Item						Three Months Ended June 30,												Six Months Ended June 30,
						2026						2025						2026						2025
Foreign currency translation adjustment						Other expense, net						$	—					$	—					$	1,023					$	(323)
Unrealized loss on marketable securities						Other expense, net						—						—						(738)						—
Unrealized loss on derivative instruments:
Commodity swap contracts						Cost of sales						—						—						—						(366)
Total gain (loss) reclassified												$	—					$	—					$	285					$	(689)

17. Segment Reporting

First Solar operates as one business, which involves the design, manufacture, and sale of cadmium telluride (“CdTe”) solar modules, which convert sunlight into electricity. As such, we operate as a single operating segment. Third-party customers of this segment include system developers, independent power producers, utilities, commercial and industrial companies, large corporate energy buyers, and other system owners and operators. Our business is managed by our Chief Executive Officer, who is also considered our chief operating decision maker (“CODM”).

Although our CODM regularly uses gross profit for key operating decisions about allocating resources and assessing performance, we have concluded that consolidated net income is also used and is the measure of profit or loss required to be disclosed under the provisions of ASC 280 for our single operating segment. Accordingly, we considered whether there were any significant expense categories to disclose and concluded that the condensed consolidated financial statements and accompanying notes thereto include the relevant categories regularly provided to our CODM. The measure of segment assets is reported in our condensed consolidated balance sheets as “Total assets.”