Key Highlights

  • Net sales fell 22.8% to $1.23 billion from $1.59 billion in the third quarter of 2025.
  • Gross Margin widened to 57.9% from 38.3% a year earlier.
  • Diluted earnings per share were $5.30, compared with $4.24 in the prior year quarter.
  • The company produced 4.3 GW and sold 4.1 GW of modules, against 3.6 GW produced and 5.3 GW sold.
  • Total Debt fell to $107.7 million from $498.6 million at December 31, 2025.

Lower sales, higher profit in the third quarter

First Solar (NASDAQ:FSLR) makes thin film photovoltaic solar modules and describes itself as the only U.S.-headquartered company among the world's largest solar manufacturers. Its Quarterly Report for the period ended September 30, 2026, with share data as of October 23, 2026, showed net sales of $1.23 billion, down $363.9 million from $1.59 billion a year earlier.

The company attributed the decline mainly to a 22.0% drop in the Volume of modules sold to third parties and lower Revenue tied to customer contract terminations. Even so, Net Income rose to $571.1 million from $455.9 million, an increase of about 25% on a calculated basis, and Diluted Earnings per Share reached $5.30 against $4.24.

Section 45X credits reshape cost of sales

Cost of sales fell 47.4% to $517.9 million, or 42.1% of net sales, from 61.7% a year ago. Gross Profit still rose 16.8% to $713.1 million. The company said a higher volume of modules qualifying for the Section 45X advanced Manufacturing production Credit lowered cost of sales by $237.7 million.

Lower sales volume reduced costs by $229.9 million, and logistics costs fell by $55.7 million. Offsetting some of that, production costs were $118.9 million higher, mainly because more of the modules sold were made in the United States.

Operating expenses and production volumes

Operating expenses were $167.0 million, compared with $144.7 million, as selling, general and administrative expense reached $65.3 million and Research and Development expense rose to $67.2 million. Production start-up expense eased to $34.4 million from $36.7 million. Operating Income was $546.1 million, up from $466.1 million.

The company produced 4.3 GW of modules in the quarter, up from 3.6 GW, and sold 4.1 GW, down from 5.3 GW. It said it has reduced production of Series 6 modules at its international plants, citing pricing pressure in Europe, a closed Indian market for Southeast Asian products and U.S. tariffs.

Manufacturing expansion and Tariff refunds

The first phase of the company's sixth U.S. factory, in South Carolina, began commercial production in September 2026, with the second phase expected to start in mid-2027. The company also recently began operations at its fifth U.S. facility, and its global footprint spans the United States, India, Malaysia and Vietnam.

During the quarter, First Solar received payment for substantially all remaining refund claims for tariffs paid under the International Emergency Economic Powers Act before the U.S. Supreme Court ruled them unlawful. Module prices in the United States are generally expected to increase following the conclusion of a Section 232 polysilicon investigation.

Cash, debt and what to watch next

Cash, cash equivalents and marketable securities totaled $1.62 billion at September 30, 2026, compared with $2.86 billion at December 31, 2025. Over nine months, Operating Activities used $402.7 million of cash, against $815.2 million provided a year earlier, while Capital Expenditure was $434.7 million versus $698.1 million. Total debt was $107.7 million.

For the nine months, net sales were $3.33 billion, down 5.8%, and net income was $1.34 billion, or $12.45 per diluted share, versus $9.37. Readers following the name will likely watch how the South Carolina ramp progresses and whether credit-driven margins hold as sales volumes change.